State Visitation and Taxes

[GlobalHopper]

Does anybody have a list of the amount of time you can spend per state before having to register the vessel and/or become a resident?

California has rules in place that if your a resident and bring a vessel (boat or airplane) into the state you need to pay the sales tax difference if your within 12 months from purchase. You have 120 days to visit before being required to register the boat in California, but if you take up residency you have 10 days.

We are currently residents of California but are look forward to moving to Delaware for residency and vessel registration, we have been transient for over 5 years no longer see the need to be based in the republic.

Actually, if anyone knows the best state for migratory people to base out of I would love to hear an opinion.

~K

[osirissail]

The average time is the same as bringing and using an automobile - about 90 days - sometimes less, sometimes more. But the boat has to remain within the jurisdiction for that length of time or more before you have to pay. Of course, registering it in the jurisdiction if evidence that the boat will be "staying" and the tax/fee is levied.

[Pblais]

Delaware is a good tax state but a terrible place to be on a boat. It's cold and the sailing can be dreadful. if you are in DE and like MD the MD folks will be on you instantly attempting to prove you use you boat in MD. If you came to VA you could pay max $2K use tax and then deal with a small personal property tax annually and have batter weather and live happier and cheaper.

Bottom line: Don't keep your boat where you don't want to live. The 90 day rule seems to follow more places than not. A little more or less won't change your life. There are really horrid place you could keep you boat and not pay taxes on the boat. If you can keep moving you can avoid taxes everyplace. You just have to be mindful when you take on roots. Sounds easy to keep moving but most people don't work like that. They find a place they like and they stick around at long enough to owe taxes.

[Ram]

It would seem that it would be hard for any state to prove you were in there state for the 90 days? Yes/No?

[osirissail]

Yes, and No. If your boat is registered in a different State from what your Drivers License and other ID shows, they have you - (if the boat is currently in your home State). Florida has been known to go around to marinas and mooring fields and also popular anchorages and record the name and home port. Then they return on a 90 day cycle of locations and see if you are still here. I have also gotten a "blanket" letter from the Florida Department of Revenue asking me to prove I have not been in Florida for 90 days or more. Remember when it comes to taxes the burden of proof is on you to prove you are innocent.
- - The "magic" way to avoid the problems is never anchor/moor or stay in a marina for more than a month or two at the most. Keep changing the boat's location solves several regulatory problems from "Use Tax/Fee" to MSD/holding tank regulations (that little regulation can result in the confiscation of your boat).
- - If you "live" for Federal and/or State tax purposes in a State then register your boat in that State and you will avoid a lot the hassles of trying to avoid taxes and getting caught. Remember, "the tax man and the grim reaper never sleep."

[Hud3]

If you're truly migratory, and don't plan to stay in any State for months or years, Florida is a good place. No state income tax, and no death taxes if you happen to croak on the boat. Document your boat with the USCG and you don't need to register with any state--if you're truly migratory.

You can sign up with a mail forwarding service, which will allow you to legally establish your "domicile" in Florida. This will give you a U.S. address for credit cards, absentee voting, fed tax purposes, Florida drivers licenses, and Social Security. Mail forwarding service fees start at about $12 per month.

If you hang around any state too long, you'll eventually end up liable for some sort of "tax", be it sales tax, use tax or personal property tax.

[osirissail]

Originally Posted by Hud3

If you're truly migratory, and don't plan to stay in any *** State for months or years,*** Florida is a good place. No state income tax, and no death taxes if you happen to croak on the boat. Document your boat with the USCG and you don't need to register with any state--if you're truly migratory.

This discussion is strictly about US Flagged boats in US Waters. European (EU) boats in another EU State have somewhat similar situation.
- - Change those words to *** State's waters within US Territorial Waters, for a few days*** and you will have the best answer/explaination yet.
- - The various States of the USA are very good at cooperating when it comes to taxes/fees. A US Flagged boat does not have to have State numbers, but it must have a State registration decal displayed. A bored State Marine police or other official who does not see a valid State decal on your boat will ask where you live and how long you have been in their waters. If you cannot answer that you just arrived back in the USA and are proceeding to your home State where you will "register" the boat - he will most probably issue a summons for operating in the State's waters without a valid registration.
- - This is a problem for people returning from an extended world cruise and have let their State registration lapse. In this situation there is no "grace" period. Each State wants your money and they want it now. Each State will honor another State's registration up to the usual 90 days (+/-), but total lack of any State registration - and - a valid believable reason for not having one - will get you a summons and court date. You are in and using the State's waters just like automobiles are using the roadways. Federal documentation does not remove the requirement to register the boat with a State. Whether they "catch you" without State registration is all a matter of luck and avoiding heavy boating areas where State/local marine police patrol.

[Hud3]

Originally Posted by osirissail

...A US Flagged boat does not have to have State numbers, but it must have a State registration decal displayed...

True in some states, but not all. Virginia, for example, does not require registration nor decal for USCG documented vessels.

[Pblais]

True in some states, but not all. Virginia, for example, does not require registration nor decal for USCG documented vessels.

They just take the money. FL, and MD do VA AND NC don't. Acutally most states don't. FL having no income tax takes this money a little more seriously. The enforcement of all this is always a gray area but in times of budget cuts, collection of existing taxes from those that never paid is not hard to be for.

[speciald@ocens.]

Form a Delaware LLC. Have the Delaware corporation buy the boat. Close on the boat in Delaware (no sales tax). Register the boat in Delaware. Leave the country and spend more than half the year in the Caribbean - document with receipts. You can then spend the rest of the year in Maryland if you want without any fee risk. Or after 6 months of ownership a boat can be registered in Florida without any new tax liability - just take your registration to the tax collector, turn it in, and pay for the Florida registration. Simple, right?

[GlobalHopper]

Being truly transient and documenting location by logbook and fuel receipts has been working for us, since that is what our accountant requests. California is not a great state to be based out of if your never there and is king of the tax game (with Connecticut being the queen), I love the state and Governator, but the tax burden has increased for the people that didn't leave. Delaware and Oregon seem to be the best states I've found for so far to base from.

I've pulled together a list of stay lengths by state, but not sure if that covers possible usage fees that could be imposed by different states.

AL: 90 days
CA: 120 days
CT: 60 days
DE: 60 days
FL: 90 days
GA: 60 days
LA: 90 days
MD: 90 days / year
ME: 60 days
MI: 60 days
NC: 90 days
NJ: 180 days
NY: 90 days
OR: 60 days
RI: 90 days
SC: 60 days
TX: 90 days
VA: 90 days
WA: 180 days

~K

[Nice N Easy]

Louisiana is pretty reasonabale. No sales tax on a boat more than ten years old. Don't understand that, but is what it is. They do require state registration, even if documented, but is cheap. Was 73 bucks for my 37, for three years. They do have state income tax.

[osirissail]

Originally Posted by Hud3

True in some states, but not all. Virginia, for example, does not require registration nor decal for USCG documented vessels.

Again - Yes and No. The devil is in the details or in this case in the fine print especially for Virginia. From the Virginia Government website for boat registration. >>>>>
Documented Watercraft
If Documented with the U.S. Coast Guard (USCG) and being changed to state registration: the Certificate of Documentation, a copy of the signed bill of sale, and either a Letter of Deletion from the USCG or the Abstract of Title (with proof of lien release in the documented owner's name). Note: Watercraft cannot be documented by the USCG and titled at the same time. The owner must choose between documentation or titling. While a documented vessel may not be titled, it may be registered at the owner�s discretion should a registration decal be desired to show proof that sales tax was paid. The registration decals may be useful if the watercraft is operated in other states that require a registration decal or other proof that sales tax was paid.<<<<<<

- - If you never leave the waters of Virginia with your documented boat you do not need a Virginia Decal - - If you leave the waters of Virginia for another State - Florida for certain - will want to see the decal from Virginia just as the last sentences in the Virginia State website for Boats explain.
- - When it comes to taxes, they have been closing the loopholes for years and really, do you need the hassles of being stopped in another State and then have to deal with the grief of proving you have paid the Tax in your home State? And if you have not - then more grief.
- - A good way to think of it is the Government is the 800lb Gorilla and they are going to use your money (taxes) to catch and convict you. Generally we take to cruising to get away from grief. The cost of the registration and decal is minimal compared to the lawyer fees and fines trying to dig your way out of your own hole.
- - Florida has significantly increased its boat registration/renewal fees and I have been outside Florida/US waters for more than a half dozen years and I still "renew" each year because if I have to go back I will not have to deal with the hassles of re-registering and proving that 30 years ago I paid the sales/use tax.
- - If you never intend to take the boat back into US Waters then the whole discussion is moot and you can use the money for more rum, beer, or a new set of charts.

[sv_makai]

Originally Posted by Ram

It would seem that it would be hard for any state to prove you were in there state for the 90 days? Yes/No?

In MD and DC there are several ways that you boat can be id's for its stay. I have seen state reps come in a check the leases at a the marina office. If you have a long term lease it says you intend to stay.

In several places Dock walkers who look for boats that have over stayed and then turn them into the state, rewards can be had just for taking the daily walk.

The state of FL tried to get us to pay because we used a mailing service in FL and the mailing address was the FL address though the boat was not there. That one we had to explain the mailing service and the fact we didn't keep the boat there, we were in the Caribe.

So be careful.

[bobfnbw]

What about documenting in Gibraltar?
If you did that, as a US citizen, would you still have to have state registration?
Anyone here ever do that?

Yacht Registry

Gibraltar has a separate register for commercial and pleasure vessels – although there is no size limit for pleasure vessels – and offers a professional, efficient and user-friendly service to yacht owners.
Yachts registered in Gibraltar fly the Red Ensign faced with the armorial bearings of Gibraltar and as such are entitled to Royal Navy protection. In addition, because Gibraltar has independent tax status, VAT is not levied, so a company registered there does not have to pay VAT when buying a pleasure yacht, as long as the boat remains in Gibraltar. Gibraltar registered yachts with non-EU owners can apply for VAT-free temporary importation to sail in EU waters for up to six months per year.
Furthermore, thanks to Gibraltar's well-established legal and financial institutions, owners can have confidence in the maritime legal system, which follows English law. Over a dozen local companies specialise in ship registrations and maritime law.

Gibraltar Port Authority - Yacht Registry

Interesting stuff.