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Old 24-10-2013, 14:16   #1
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Taxes

I have read countless forums and really have not found the information I'm looking for. If this has been answered somewhere else, I apologize, but I could not find it.

My wife and I will be purchase a catamaran in the future. Probably around 50' and probably used. We live in SC. As I understand it, our boat can be registered in any state. This can be advantageous as Delaware, for example, charges no sales or property tax. It then just becomes a matter of not staying too long in any one state and not purchasing annual dock space. If we purchase the boat and register it in SC, we would have to pay over $10K per year for property tax. Because we live in SC, if we register it in another state, we can not enter SC waters (not even for 1 day) or we would be charged the property tax. The tax office did say if the boat was registered internationally (BVI or Cayman Islands for example), under a corporation, then it could stay in SC waters for up to 180 days before being taxed.

To add to the complexity, we could register in Delaware and keep the boat in NC, as I understand it, for up to 90 days. We would have to leave the state and get a gas receipt from another state, but could return to NC for another 90 days.

Georgia is an option, but I think the property tax there is similar to SC.

I have read conflicting reports on Florida...some say there is a property tax and some say there isn't.

We plan to move the boat around, but having to move around is sort of a potential pain.

Our goal: To pay as little sales tax and property tax as LEGALLY possible.

Does anyone know the FACTS or a web link that summarizes our dilemma for all SE States? Certainly, others have been down this road.
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Old 24-10-2013, 14:19   #2
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Re: Taxes

Great question! Welcome to the forum!

Looking forward to the responses!
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Old 24-10-2013, 14:42   #3
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You don't have to register your boat in SC. Just federally document it. You get 6 month in the coastal counties per year before you have to pay property taxes. I keep mine here during the summer months and move it south for the winter. Keep records to prove when you arrive and leave. My cruising log worked the last time they tried to hit me with taxes but they really want receipts..
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Old 24-10-2013, 15:08   #4
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Re: Taxes

All you folks in the US seem to be heaped upon with taxes for just about everthing they can think of. I know when I bought my boat in Marina Del Rey, California, the broker advised I did an 'Offshore Transaction' to purchase....the boat was sailed 3 miles offshore to complete that as required! Saved me about $16000 I seem to remember.
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Old 24-10-2013, 15:18   #5
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Re: Taxes

A few years ago they increased the amount of time required for offshore deliveries from California to avoid skippers paying that tax. The cocnept's still the same, but requires, IIRC, 180 days or more. There are now a lot of boats in Ensenada for long term to pull this trick off. The harder thing to do in California is to get OFF the tax rolls if you move!
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Old 24-10-2013, 16:12   #6
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Re: Taxes

Greetings and welcome aboard the CF, barrywhaling.
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Old 24-10-2013, 16:47   #7
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Re: Taxes

There is something called an intangible tax in FL not sure if applies to boats.

Better buy now before the "fair tax" hits you for like 35%. I hear if will create lots of jobs spying on tax cheats though.
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Old 25-10-2013, 02:27   #8
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Re: Taxes

If you aren't going to be a resident of SC, why not establish a residence in another state with lower taxes.

The CG documented doesn't eliminate the requirement for state registration (they may not call it registration but it's the same thing). More importantly, it doesn't get you out of the taxes.

Of course if you do intend to stay a resident and do intend to keep the boat in the state and you have a goal of being legal, pay the tax that was intended to cover this situation.
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Old 25-10-2013, 02:48   #9
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Re: Taxes

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Originally Posted by Boatguy30 View Post
There is something called an intangible tax in FL not sure if applies to boats.

Better buy now before the "fair tax" hits you for like 35%. I hear if will create lots of jobs spying on tax cheats though.
The intangibles tax was repealed in 2007. It did not apply to boats anyway.
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Old 25-10-2013, 03:59   #10
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Originally Posted by valhalla360 View Post
If you aren't going to be a resident of SC, why not establish a residence in another state with lower taxes.

The CG documented doesn't eliminate the requirement for state registration (they may not call it registration but it's the same thing). More importantly, it doesn't get you out of the taxes.

Of course if you do intend to stay a resident and do intend to keep the boat in the state and you have a goal of being legal, pay the tax that was intended to cover this situation.
Wrong. You don't need state registration in SC if your vessel is documented. I live here....I know!
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Old 25-10-2013, 05:58   #11
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Re: Taxes

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Originally Posted by barrywhaling View Post
Our goal: To pay as little sales tax and property tax as LEGALLY possible.
Really? I would think that the goal should be to derive as much enjoyment as possible out of the boat. Seems to me like you are going to make the boat almost impossible to use, or at least a PITA to use, just to avoid some taxes. Buying a boat, in order to accomplish a goal of avoiding taxes, strikes me as extremely backwards.

But it's your money.
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Old 25-10-2013, 06:33   #12
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Originally Posted by denverd0n View Post
Really? I would think that the goal should be to derive as much enjoyment as possible out of the boat. Seems to me like you are going to make the boat almost impossible to use, or at least a PITA to use, just to avoid some taxes. Buying a boat, in order to accomplish a goal of avoiding taxes, strikes me as extremely backwards.

But it's your money.
Eh, we like the boat south during the winters and would take her south taxes or not. The taxes provide an incentive to watch the timing...
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Old 25-10-2013, 06:52   #13
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Re: Taxes

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Originally Posted by valhalla360 View Post
If you aren't going to be a resident of SC, why not establish a residence in another state with lower taxes.

The CG documented doesn't eliminate the requirement for state registration (they may not call it registration but it's the same thing). More importantly, it doesn't get you out of the taxes.

Of course if you do intend to stay a resident and do intend to keep the boat in the state and you have a goal of being legal, pay the tax that was intended to cover this situation.
That's just it...I do live in SC and need to do so for 3 more years, until my son graduates college (in state tuition), BUT I don't have to have it in SC waters. Being just south of Charlotte provides drives time to NC or GA that are just about the same (maybe an hour more). So, I'll happily spend the few minutes extra in the car to avoid $10K in taxes. And if SC wants to act in this manner, my new boat will never touch their waters. I live on a lake in SC and already pay for 3 water vessels, 4 cars and a house. They get their fair share and then some.
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Old 25-10-2013, 06:57   #14
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Re: Taxes

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Originally Posted by denverd0n View Post
Really? I would think that the goal should be to derive as much enjoyment as possible out of the boat. Seems to me like you are going to make the boat almost impossible to use, or at least a PITA to use, just to avoid some taxes. Buying a boat, in order to accomplish a goal of avoiding taxes, strikes me as extremely backwards.

But it's your money.
I appreciate your thoughts. Certainly I have to be careful....forest/trees and all. I will hopefully only do this once and be done. I spoke to NC, Brunswick County and they said that if the boat isn't in their waters on January 1, then I can keep it there as long as I want the rest of the year, if documented in another state. This is the perfect scenario. No Tax and New Year's eve/day away every year.
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Old 25-10-2013, 07:42   #15
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Re: Taxes

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Originally Posted by barrywhaling View Post
Certainly I have to be careful....forest/trees and all.
Glad to hear that you're keeping your real priorities in view. Some people seem to get so caught up in the tax things that they lose sight of what is really important--enjoying the boat. I was hoping that you weren't one of those.

One comment is that you have to be careful about your terms. You don't "document" a boat in any particular state. It is federal documentation. You "register" a boat with a state. Some require registration even if the boat is federally documented, some do not. And while the registration fees themselves are usually pretty reasonable, depending on the state, they may trigger other taxes and fees that are not so reasonable.

And then, of course, when it comes to sales/use tax, and property taxes, that's a whole different matter. Some states will charge you a sales tax for any purchase completed in their state, others a use tax when you bring it to their state, and still others have no such taxes (and, of course, among the states that do charge sales/use taxes, the rates vary dramatically).

Good luck.
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