Sales use Tax HELP!!!

[Stu Jackson]

Can anyone explain, since the OP asked about CA taxes on a boat he's bringing from WA to Mexico, how anything about MA and FL could be useful to him?

[goat]

When I first bought my boat in California I started down the same route of wriggling out of taxes; working on the boat, registering in Alberta, etc. That was about the time of the 'Rebel Heart' rescue. I came to the conclusion that some tax revenue is used for a good purpose, and just by paying some money I could sail in California for the two winters until I retire without the fear of trying to prove I'm not just testing the latest repair. There are ways around taxes but as they say in the anchor threads, I like to sleep at night. It would sure suck to have a bunch of back taxes sneaking up on you when you're retired and trying to leave the country.
YMMV

goat

[Shrew]

FAQ - Use Tax on Purchases of Vehicles, Vessels, Aircraft - Board of Equalization

OP stayed in California too long. This is a Use Tax issue. Had the boat been out of CA for 12 months prior to entry, this would not be an issue. Had the boat been truly 'passing through' this would not be an issue.

However, the boat was purchased in WA, then moved to CA several months later, than 'resided' in CA for 12 months.

The same thing happened to me in Ct., and references to MA and FL are to because the rules are relatively the same.

Best of luck, its going to be tough to convince the State of CA otherwise.

[nimblemotors]

California is a bad place. Don't ever go there, leave if you live there.
Particularly the San Francisco bay, don't bring your boats there.
Please PLEASE leave.
The 1000 people increase every day need to go somewhere else!

Nobody comes here anymore, it is too crowded.

Just stop using Google if you want to give California the bird.
Or use Intel microprocessors, Databases, or the Internet itself really.
Don't buy our fruit and nuts and veggies either, or watch TV or movies.

Fueled by robust growth in the San Francisco Bay Area, California's population continued its slow, steady ascent last year, adding 1,000 residents each day in 2013 to bring the number of people in the nation's largest state to 38.3 million.

[zeehag]

contact the california board of equalization, as these are the folks who charge , lien, and mess with yer head until you want to nuke cali.... they will work with you if you contact them and do so.
also--get the flock outta cali and what is to pay-- where is it on record that you resided in kali or bought the boat there.. and where is it on record that you owe cali tax.
make your own deals , as that is how it is done.
speak with the tax people.

[Greenhand]

Originally Posted by nimblemotors

California is a bad place. Don't ever go there, leave if you live there.
Particularly the San Francisco bay, don't bring your boats there.
Please PLEASE leave.
The 1000 people increase every day need to go somewhere else!

Nobody comes here anymore, it is too crowded.

Just stop using Google if you want to give California the bird.
Or use Intel microprocessors, Databases, or the Internet itself really.
Don't buy our fruit and nuts and veggies either, or watch TV or movies.

My father in law firmly believes that CA is suffering from a net loss of people. But then, he might mean white people. Or just male Republicans. The whole idea of "people" gets a little fuzzy at family reunions.

Getting out of California is not necessarily an answer. A tax lien will affect your credit, which may affect your ability to get insurance, or even a job in certain industries. If you return to the US within 10 years, many states allow other states to garnish wages.

[Kenomac]

Originally Posted by goat

When I first bought my boat in California I started down the same route of wriggling out of taxes; working on the boat, registering in Alberta, etc. That was about the time of the 'Rebel Heart' rescue. I came to the conclusion that some tax revenue is used for a good purpose, and just by paying some money I could sail in California for the two winters until I retire without the fear of trying to prove I'm not just testing the latest repair. There are ways around taxes but as they say in the anchor threads, I like to sleep at night. It would sure suck to have a bunch of back taxes sneaking up on you when you're retired and trying to leave the country.
YMMV

goat

I'm assuming you can say this because your CA tax burden is rather small. Had we decided to keep our boat in Caiifornia, our sales tax would have been nearly $75,000 plus a yearly use tax of $10,000 and a mud tax of $500 or so. All of this on top of slip and mooring fees. Since we keep our boat elsewhere, our tax burden is zero. A BIG difference. Which is precisely why California is in the financial doghouse... Everyone who can, keeps their stuff away from high taxing authorities... Like Cali.

[Greenhand]

Nevermind, it really isn't worth what I was going to say.

[Stu Jackson]

Originally Posted by Kenomac

I'm assuming you can say this because your CA tax burden is rather small. Had we decided to keep our boat in Caiifornia, our sales tax would have been nearly $75,000 plus a yearly use tax of $10,000 and a mud tax of $500 or so.

From Shrew's post link #33

What is the difference between sales tax and use tax? In California, transfers of tangible personal property for a consideration (sales and purchases) are subject to sales tax or use tax unless the law provides an exception (that is, an exemption or exclusion). Although the rates are generally the same, sales tax is imposed on the retailer for the privilege of selling tangible personal property in this state. The retailer may collect reimbursement from their customer if the contract of sale so provides. Although this is usually invoiced as "sales tax," it is actually sales tax reimbursement. Whether or not the retailer collects reimbursement, the retailer is liable for the tax due.
Use tax is generally imposed on the purchaser of tangible personal property that is used, consumed, or stored in this state. Sales of vehicles, vessels, and aircraft by licensed dealers are usually subject to sales tax, for which sales tax reimbursement is collected at the time of purchase. Use tax applies to the cost of vehicles, vessels, and aircraft purchased from non-dealers (for example, private parties) or from outside California for use in this state. Use tax also applies to most leases of tangible personal property. Private party sales or brokered transactions are normally subject to use tax. If the first use of the property occurs in California, use tax may apply even if the purchaser is not a resident of the state. The sales and use tax are "mutually exclusive," which means that either sales tax or use tax applies to a single transaction, but not both.


It's pretty simple. NOT BOTH.

[Compactorguy]

Listing your home port as Berkley and having been in our state for over a year I think your liable for the sales tax. If you don't pay you will have interest and penalties added onto your dept. See how much tax in the state you bought the boat with penalties and pay them. In California everybody I know only pays $500 for cars and boats ;-), they joke about it at the DMV


Sent from my iPhone using Cruisers Sailing Forum

[Stu Jackson]

Los Angeles County Cruisers Beware! - Cruisers & Sailing Forums

This is what I meant in my earlier post.

It applies to ANY and EVERY county in California.

Probably on the east coast, too.

[Dsanduril]

Why don't we just all go to the rules themselves? There are two we are discussing; one-time sales/use tax at time of purchase and annual personal property tax. As to the first (and the OP's original question):

PURCHASE FOR USE IN THIS STATE VEHICLES, VESSELS, AND AIRCRAFT—12-MONTH TEST (FROM OCTOBER 2, 2004, THROUGH JUNE 30, 2007, AND AFTER SEPTEMBER 30, 2008).

(A) Purchased for Use in California. Except as provided in subdivision (b)(5)(D) below, the provisions of subdivision (b)(5) apply from October 2, 2004, through June 30, 2007 , and after September 30, 2008. A vehicle, vessel, or aircraft purchased outside of California which is brought into California is regarded as having been purchased for use in this state if the first functional use of the vehicle, vessel, or aircraft is in California. When a vehicle, vessel, or aircraft is purchased outside of California, is first functionally used outside of California, and is brought into California within 12 months from the date of its purchase, it is rebuttably presumed that the vehicle, vessel, or aircraft was acquired for storage, use, or other consumption in this state and is subject to use tax if any of the following occur:

1. The vehicle, vessel, or aircraft was purchased by a California resident as defined in section 516 of the Vehicle Code, as that section now reads or is hereinafter amended. For purposes of subdivision (b)(5), a closely held corporation or limited liability company shall also be considered a California resident if 50 percent or more of the shares or membership interests are held by shareholders or members who are residents of California as defined in section 516 of the Vehicle Code.

2. In the case of a vehicle, the vehicle was subject to registration under Chapter 1 (commencing with section 4000) of Division 3 of the Vehicle Code during the first 12 months of ownership.

3. In the case of a vessel or aircraft, that vessel or aircraft was subject to property tax in this state during the first 12 months of ownership.

4. If purchased by a nonresident of California, the vehicle, vessel, or aircraft is used or stored in this state more than one-half of the time during the first 12 months of ownership.

(B) Evidence Rebutting Presumption. This presumption may be controverted by documentary evidence that the vehicle, vessel, or aircraft was purchased for use outside of this state during the first 12 months of ownership. This evidence may include, but is not limited to, evidence of registration of that vehicle, vessel, or aircraft, with the proper authority, outside of this state.

Operative September 20, 2006 , through June 30, 2007, and after September 30, 2008, in the case of a vehicle, this presumption also may be controverted by documentary evidence that the vehicle was brought into this state for the exclusive purpose of warranty or repair service and was used or stored in this state for that purpose for 30 days or less. The 30-day period begins when the vehicle enters this state, includes any time of travel to and from the warranty or repair facility, and ends when the vehicle is returned to a point outside the state. The documentary evidence shall include a work order stating the dates that the vehicle is in the possession of the warranty or repair facility and a statement by the owner of the vehicle specifying dates of travel to and from the warranty or repair facility.

Then there's the second part, personal property tax (which also plays into use tax, see above):

Private aircraft are taxed at the location of the airport or hangar where they are usually kept. Commercial certificated aircraft are taxed on an apportioned basis in each county to which flights are made. Vessels in excess of $400 in value are generally assessed where they are habitually located. A small boat not habitually kept at a mooring, but lifted from the water and trailered to the owner’s residence or other location, is taxed at the location where it is usually kept.

The problem herein is the question of "habitually kept". The OP is going to have a tough row to hoe since the documented home port is Berkeley, CA. With that hard to prove no intent to be in California, and hard to show that it is not "habitually kept" there when it was in fact there for a year and half.

[Kenomac]

If you buy a boat in California or transfer a boat to California within a year and plan to use it there, you will pay the sales tax AND the use (property) tax for that year. Plus you will be paying the annual use (property) tax for as long as you own the boat.

Been there, done that.

Sales tax in LA county is 10% and the annual property tax is approximately 1.2 % of assessed valuation (whatever the assessor thinks your boat is worth... Usually more than you do)

Besides there not being much to see from the water in California, these tax issues are why you don't see many large boats... The marinas are filled primarily with derelict and older smaller boats. If you don't believe me, travel to just about everywhere else in the world, then you'll realize and see just what a big boat looks like. There are virtually none in California.

[Arthur Garfield]

Saddly I think the OP is fubar and must pay some amount.I presume it can be negociated .
That said,It often boggles my mind that persons do not seek professional counsel,IE: TAX ADVISE.

The habitual us clause above seems quite the catch-all without discoverring
how to legally obviate it.Again-proffesional advise required.
It boils down to what one prefers to pay-alittle or alot !

Just to rub salt-certain States,for instance R.I. have no sales tax charge if one
berths,anchors and/or registers there.Famously,John Kerry availed himself of this and avoided,I think the number was $3mil tax !


All the Best

[savoir]

The only way out of this tax is for you to prove no intention to use or store the boat in California during year one.

That might be tough. You must prove no use and a long term repair program. The tax law does not interpret storage and repair as being the same thing. Got any witnesses ?