CA tax aggravation - vessel on east coast

[Paul L]

Originally Posted by makobuilders

So reading this conversation, it would seem that the two best states to document your boat in (hailing port and ownership) would be Delaware and Alaska. This from the point of view of sales tax and PPT. Easy enough to do with an LLC.

I'm not sure how you came to this conclusion. Documenting a boat is with the federal goverenment. Taxing depends on what state the boat is physically in, if any.
Sure states like California assume the boat is physically present if you give them any reason to, but in the end they do not collect any tax if it is not in the state.

[mako]

Originally Posted by Paul L

I'm not sure how you came to this conclusion. Documenting a boat is with the federal goverenment. Taxing depends on what state the boat is physically in, if any.
Sure states like California assume the boat is physically present if you give them any reason to, but in the end they do not collect any tax if it is not in the state.

As previously stated, California, North Carolina and likely most all states troll the documentation registry to see who hails from their State. Then they chase you down regularly for you to prove that you were not in their State for 6+ months.

So to avoid the harassment, my premise is that documenting in DE, NC and I believe AK should avoid that, since they don't have sales nor PPT.

That's how I've come to that conclusion. Am I missing something here?

[Trimaran Ken]

Originally Posted by makobuilders

So reading this conversation, it would seem that the two best states to document your boat in (hailing port and ownership) would be Delaware and Alaska.

Although I nor my boat have ever been in WV, that is where it is documented. WV has never contacted me.

[Trimaran Ken]

Originally Posted by makobuilders

So to avoid the harassment, my premise is that documenting in DE, NC and I believe AK should avoid that, since they don't have sales nor PPT.

Boats in RI are non-taxable.

[tmc209]

I purchased a new boat in CA two years ago. Paid my sales tax of 8.75% and then sent all the required documentation to Sacramento County for the personal property tax assessment.

When I received the tax assessment my $200k boat (price paid) was assessed at roughly $218k. I called the assessor thinking there was an error; the guy told me that since I was "willing" to pay the sales tax on top of the purchase price then the value of the boat was purchase price PLUS what I paid for sales tax. Before I told him that this was the stupidest thing I've ever heard I apologized because he is just at work and not making the rules.

They taxed me when I earned the money, taxed me when I purchased the boat via sales tax, then taxed me personal property tax on the sales tax I already paid; plus that tax continues throughout the ownership of my boat.

All of this while the politicians in CA are screaming that the Republicans dared to CUT taxes and let US keep our hard earned money.

I sent letters to politicians and the assessor - since I'm not the head of a public employees union or an rampant environmentalist - just a reasonable guy and taxpayer; I have no voice in how California is run.

Ridiculous is the nicest word I can think of ....

[captainwoody]

A lot of bs in this thread. Most states charge property tax on boats. It's about 1% in CA. And no, to change states you don't need to mail all the receipts and documentation you have, they don't do it by weight.
You need to show your boat is "permanently situated in one place outside of California". The contract from your current marina (with your new registration) should do it . Of course you have to tell any state that you sold or moved your boat or it has a lower value. The form for CA is attached - called VOR.
If you feel you have been charged in error, file the petition form found here: http://www.cdtfa.ca.gov/formspubs/cdtfa416.pdf

January 1. As I understand it, if your boat is parked or registered in CA on Jan 1, be prepared to receive a bill. I understand the BOE gets a list of tenants from marinas but also from the DMV.

A lot of fun facts from Sac county's site ...
Boats - FAQs
You can call Sac's Assessor Marine Division at (916) 875-0740 (8am-4pm) or PPDutyApr@SacCounty.net.

Yes, some military get a discount. This and other exemptions: https://www.boe.ca.gov/proptaxes/vessels_exemption.htm

Some states charge your property tax with your registration. This is a better system and would eliminate some cost and bureaucracy and they would better know when you moved.

Thought on taxes: The solution to public debt isn't cutting taxes, it's cutting spending. When debts are under control, cut taxes. Paying taxes is Patriotic. As is offering up your govt. payout for the chopping block.

Captain Woody

[Paul L]

Originally Posted by makobuilders

As previously stated, California, North Carolina and likely most all states troll the documentation registry to see who hails from their State. Then they chase you down regularly for you to prove that you were not in their State for 6+ months.

So to avoid the harassment, my premise is that documenting in DE, NC and I believe AK should avoid that, since they don't have sales nor PPT.

That's how I've come to that conclusion. Am I missing something here?

As I said taxing depends on being in a locality. So if you want to be US federally documented and the boat will be out of the country all year, you won't owe taxes. For most people having a home port in their state of residence makes sense. If that happens to be a state like CA then it is likely you will have a one time run around with them to demonstrate the boat isn't in the state.

If you are going to remain within the US then you will owe taxes in the state you hang in if it exceeds the length of time they give you as a freebie.

[Shrew]

Originally Posted by makobuilders

So reading this conversation, it would seem that the two best states to document your boat in (hailing port and ownership) would be Delaware and Alaska. This from the point of view of sales tax and PPT. Easy enough to do with an LLC.

Not sure it matters seeing as how you're from Qatar, but the answer is......

Document the boat with a hailing port in a state that doesn't charge taxes on a boat. Those states have no vested interest in chasing you for taxes they don't collect.

States which don't charge taxes on boats:

Delaware
District of Columbia
Rhode Island
USVI

States with very low taxes on boats:

New Hampshire: $10 - $1,761.40 (depending on the size and propulsion)
Virginia: %2 (capped at $2,000)
South Carolina" %5 ($300 cap)
North Carolina: %3 ($1,500 cap)

States with high taxes (California, CT, NY, FL) yes they compare the list of CG documented boats with state hailing ports against their registry. They will then assume you are a tax dodger and put you in a position of attempting to justify your innocence.

[CapitanKen]

California denies all claims for being unfairly taxed on personal property no matter what you send them in the way of documentation. Both myself and a buddy went through this process. Just sent in as much documentation as you can and formally request a hearing on the matter. After about a year a hearing date will be scheduled. When you indicate you will attend to fight the matter. they will wait until a few weeks before the hearing and then contact you that upon review they are dismissing the claim.


They are just like cheap Insurance Companies that always deny any claim the first time around.

[tdgaffney]

The day after I purchased my sailboat in Southern California, I trucked it to Seattle. When Cal Tax contacted me (over a year later), I filled out their form. I still had several go-rounds with the Cal taxing people. Finally, I ended up talking to Denette Bertolotti by email [denette.bertolotti@cdtfa.ca.gov]. At her request, I sent documents showing a) yard billings in Seattle just days after the sale and b) taxes paid in Seattle. She concluded everything was ok and "I was free to go." Whew.

[Trimaran Ken]

Originally Posted by tmc209

They taxed me when I earned the money, taxed me when I purchased the boat via sales tax, then taxed me personal property tax on the sales tax I already paid; plus that tax continues throughout the ownership of my boat.

Can you explain to me why you continue to live in CA when they treat you this way? I just don't understand it.

[Montanan]

Per the California Board of Equalization website:

Boats and Aircraft

Are boats and aircraft subject to property tax?
Boats and aircraft are taxable and are subject to annual appraisal. Their values are determined by reviewing sales of comparable boats and airplanes. Information on their locations and ownerships is obtained from the Department of Motor Vehicles, the United States Coast Guard, the Federal Aviation Administration, on-site inspections, and other public and private sources.



I sold my personal property (boat, aircraft, machinery, or equipment) after January 1. Shouldn’t the new owner be required to pay the property tax?

Even though you may no longer own the property, you are still liable for the taxes because you owned it on the lien date. When taxable personal property is sold subsequent to the lien date, it is the duty of the seller to pay the taxes on the property for the ensuing fiscal year.

Can the assessor prorate assessments or taxes between the seller and buyer of taxable personal property?


No. The assessor must annually assess all property in the county to the person owning it on the lien date. There is no provision in the law that allows the assessor to prorate assessments between the buyer and seller of taxable personal property that is sold in the ensuing fiscal year.


Are California registered vessels owned by California residents still assessable when located outside of California waters?

Yes. Until such time as a vessel’s habitual place of mooring has been established elsewhere, a vessel documented in California continues to be taxable in California. That is, if the vessel is not in California, but is traveling from one place to another and has not become permanently situated in one place outside of California, the vessel is still assessable in California.

Per the LA County assessors website:
Taxes on Moorings, Boat Slips and Tie Downs
Private use of public property is taxable under certain conditions.

If you rent or lease a mooring, boat slip or tie down from a city or the county, you may receive a property tax assessment.

You may receive a property tax assessment if:

You are using facilities owned by a government agency (city, county, state, school district, etc.)
Your right to use government-owned property is independent, durable and exclusive
You are not a government agency.

[edmundsteele]

OK. Here is my two cents worth. I am sure somebody will instantly correct me but nevertheless, it is my understanding that the USCG only requires a unique combination of name and hailing port on the stern. My advice is not to use ANY “port” on a coast or a State that has access to salt water. For example, I have used Santa Fe, NM twice as a hailing port. (Really difficult getting the mast under the bridges on I-25!). Las Vegas, Nevada is another popular choice and I have seen several boats with such a hailing port as well as several from ports in Colorado. The point is that State officials in New Mexico and Nevada are not scouring the list of Coast Guard documented vessels looking for someone to tax. When you use sales tax free Delaware or USVI on the stern you are just waving a red flag at them.
Fair Winds,
Ed

[Trimaran Ken]

Originally Posted by edmundsteele

I am sure somebody will instantly correct me but nevertheless, it is my understanding that the USCG only requires a unique combination of name and hailing port on the stern.

There are a few minor restrictions. One is that he hailing port must be someplace in the US with a ZIP code.

Mine is a place I have never been, the boat has never been, and has no body of water.

Ken
===

[Montanan]

Originally Posted by makobuilders

As previously stated, California, North Carolina and likely most all states troll the documentation registry to see who hails from their State. Then they chase you down regularly for you to prove that you were not in their State for 6+ months.

So to avoid the harassment, my premise is that documenting in DE, NC and I believe AK should avoid that, since they don't have sales nor PPT.

That's how I've come to that conclusion. Am I missing something here?

Makobuilders: Yes, you are missing a key issue. The State in which the boat is used / stored is the jurisdiction that determines the registration/titling/taxation/use permits/fees, etc. The hailing port is one way that many States, not all States, use to determine if a property taxation and other fees, such as excise taxes are due. The simplest method is to use the port where your boat is typically used / stored as its hailing port because that location is the place where all the State revenue and procedural requirements will be applicable. If you use your boat for limited periods of time in other States than the State of documented hailing port then exemptions from registration/taxation/titling etc. are provided which temporary period is specific to each State. If you use a hailing port of a State, Territory or Possession of the USA that searches the USCG documentation database to pursue potential boats which may be subject to that States's taxation/registration then you put yourself in the difficulty of then proving / convincing that State is not where your boat is located and not where your owe taxation and require registration, etc. The choice of hailing port does not determine if you are subject to a State's laws, taxation, regulation, registration, the boat being in a State's territory determines that State's jurisdictional authority. One definition of, to hail from, is: to be native of; to originate from; It is simple to just use the actual location where the boat is typically from, and not some made up place where the boat isn't. The laws where the boat is are the laws that apply. It is a reasonable assumption of a State to perceive that if you boat hails from their State that it is subject to their jurisdiction, unless you can convince them otherwise. The hailing port is just a place, therefore just use the place where it can be found, that eliminates the confusion. By way of example, I could claim a hailing port of say Twodot, Montana, but would still need to register and pay fees in Lake County because that is where the boat resides, [also note where the owner resides is not of importance, just where the boat is located].

§ 67.119 Hailing port designation.
(a) Upon application for any Certificate of Documentation in accordance with subpart K of this part, the owner of a vessel must designate a hailing port to be marked upon the vessel.

(b) The hailing port must be a place in the United States included in the U.S. Department of Commerce's Federal Information Processing Standards Publication 55DC.

(c) The hailing port must include the State, territory, or possession in which it is located. Of issue with this part (c) is the word "it". Does "it" mean the State, Territory or Possession where the place as listed in publication 55DC is located, or does "it" mean where the vessel is actually located. Therein lies the regulatory confusion as "it" is a pronoun which is not clearly specifically previously mentioned or identified

(d) The Director, National Vessel Documentation Center has final authority to settle disputes as to the propriety of the hailing port designated.

(e) Until such time as the vessel owner elects to designate a new hailing port, the provisions of paragraph (c) of this section do not apply to vessels which were issued a Certificate of Documentation before July 1, 1982.