Cruisers Forum
 


Join CruisersForum Today

Reply
 
Thread Tools Rate Thread Display Modes
Old 31-10-2014, 20:19   #46
Registered User
 
Jon Neely's Avatar

Join Date: Aug 2009
Location: Cruising East bound to EU
Boat: Hans Christian 33
Posts: 283
Re: Sales use Tax HELP!!!

Well talked to USCG, they basically couldn't talk to for CA BOE but said they are completely separated, even with the home port of Berkeley Ca dosent make any difference. I was completely upfront about the situation and she basically said I could sell the boat tomorrow outside or inside of CA and not have any problems with transfer of documentation. CA probably would have a lien on the boat and all other assets that would need to be payed off. Luckily we own nothing in cali anymore. We are going to write a letter back to the BOE, showing our rebuild, and a copy of our official check out papers for the vessel from the US. rumor is if we stay out of cali for 24 months things will most likely start back from zero. Again, we love cali and all of our family lives here, but I think our final destination will be in the USVI eventually. Thanks for all the help everyone, hopefully this thread can help other CA residents buying a boat with intentions to outfit in cali. The answer is DONT! Outfit in Oregon, put up with the winters and then leave for your cruise! I now know why I see so many boats with Portland, OR hailing ports on the side! Again thanks again CF members for the insights and opinions.
__________________

__________________
Watch Our Adventure on a HC33 at youtube.com/c/sailingvesselprism
Jon Neely is offline   Reply With Quote
Old 31-10-2014, 20:28   #47
Registered User
 
Oceanyachtllc's Avatar

Join Date: Jun 2014
Location: Maryland/Long Island/NC
Posts: 12
Re: Sales use Tax HELP!!!

I am just catching up on reading this post and other comments. I am glad you were able to speak to someone at the USCG to help clarify the matter. If you should ever need a maritime attorney, I can recommend someone in the San Diego area. Please contact me privately and I can provide the contact details.
__________________

__________________
Oceanyachtllc is offline   Reply With Quote
Old 31-10-2014, 20:30   #48
֍֎֍֎֍֎֍֎֍֎

Cruisers Forum Supporter

Join Date: Apr 2006
Posts: 13,029
Re: Sales use Tax HELP!!!

CA residents, presumably before the boat was bought?
Homeported in CA?
And residing aboard, in actual fact, while the boat was being "outfitted".

Sounds like the CA tax men win the trifecta.
Good luck with the attorney, maybe a clever one can convince them that residents who indicated a boat was homeported in CA, somehow aren't within the tax jurisdiction of CA. I'd be real curious to hear that one.
__________________
hellosailor is offline   Reply With Quote
Old 31-10-2014, 23:53   #49
Registered User

Join Date: Jun 2010
Location: Sailing the Caribbean
Boat: Switch 51
Posts: 1,498
Re: Sales use Tax HELP!!!

Quote:
Originally Posted by Stu Jackson View Post
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.
He meant the yearly county property tax, which you should have known, being a Ca boat owner. So indeed it is both.

Sent from my SM-T210R using Cruisers Sailing Forum mobile app
__________________
SVNeko is offline   Reply With Quote
Old 01-11-2014, 00:28   #50
Registered User
 
markpierce's Avatar

Join Date: Aug 2010
Location: Central California
Boat: M/V Carquinez Coot
Posts: 3,413
Re: Sales use Tax HELP!!!

I'm surprised you haven't yet been hit by personal property tax from some California county since you were berthed in California on January 1. That would be in the neighborhood of up to 1.5% of the boat's value. Grin and bear it like us.
__________________
Kar-KEEN-ez Koot
markpierce is offline   Reply With Quote
Old 01-11-2014, 00:29   #51
Registered User
 
MYTraveler's Avatar

Join Date: May 2010
Posts: 166
Re: Sales use Tax HELP!!!

Quote:
Originally Posted by a64pilot View Post
I'm actually pretty close to that 5% myself, may well be there for all I know but am around a lot of people that make far more than I, but pay less tax.
Guy I work for is a good example, I know what he used to pay as my Brother was his CPA, the very wealthy have people that are very good at "gaming" the system and avoiding tax, my Brother was one of those, that was his specality.
I understand the stats, and am in agreement that people like me pay the majority of the tax, but people well above me, the ones with the private jets and homes in the Cayman's and Paris etc often do not pay the amount of taxes you believe.
I'm guessing they are the 1%? There is a point and I do not know what it is, where wealth just goes almost vertical when graphed, I do not know where that point is.
Do yourself a favor and get informed. There is no secret password or game to svoid tax.
__________________
MYTraveler is offline   Reply With Quote
Old 01-11-2014, 01:38   #52
Registered User

Join Date: Jan 2010
Location: Narragansett Bay
Boat: Able 50
Posts: 3,055
Re: Sales use Tax HELP!!!

Quote:
Originally Posted by Jon Neely View Post
Boat was in the water for the
HTML Code:
majority of the time, being hauled in august- early September. Living abroad
. We used the boat rarely, mostly to check out if certain pieces of gear worked or not and shaking out problems.
Did you you mean "aboard" or "abroad"?

If you meant aboard then suck up a few big ones and pay. Living aboard = use = no way out.
__________________
savoir is offline   Reply With Quote
Old 01-11-2014, 04:16   #53
Registered User

Join Date: Jan 2012
Location: San Diego
Boat: Pearson 39-2 "Sea Story"
Posts: 1,109
Re: Sales use Tax HELP!!!

So, you are taking tax advice from the USCG, which told you that they have absolutely nothing to do with taxes?

That might be even worse than taking legal advise from strangers on the internet.
__________________
Greenhand is offline   Reply With Quote
Old 01-11-2014, 13:21   #54
Registered User
 
Jon Neely's Avatar

Join Date: Aug 2009
Location: Cruising East bound to EU
Boat: Hans Christian 33
Posts: 283
Re: Sales use Tax HELP!!!

Quote:
Originally Posted by Greenhand View Post
So, you are taking tax advice from the USCG, which told you that they have absolutely nothing to do with taxes?

That might be even worse than taking legal advise from strangers on the internet.
Funny and true, I have seeked other insight other than these two sources and it seems they are all lining up. To people that keep bring up property tax, We did indeed pay it for this last year. PAYED IN FULL.
__________________
Watch Our Adventure on a HC33 at youtube.com/c/sailingvesselprism
Jon Neely is offline   Reply With Quote
Old 01-11-2014, 13:43   #55
Registered User
 
Stu Jackson's Avatar

Join Date: Jan 2011
Location: Cowichan Bay, BC (Maple Bay Marina)
Posts: 6,385
Re: Sales use Tax HELP!!!

Quote:
Originally Posted by SVNeko View Post
He meant the yearly county property tax, which you should have known, being a Ca boat owner. So indeed it is both.

Sent from my SM-T210R using Cruisers Sailing Forum mobile app
Not really. I do know. Bu that's not what he wrote.

There are, then, three: Sales, Use, Property. Either sales OR use, AND property.
__________________
Stu Jackson
Catalina 34 #224 (1986) C34IA Secretary
Cowichan Bay, BC, (Maple Bay Marina) SR/FK, M25, Rocna 10 (22#) (NZ model)
Stu Jackson is online now   Reply With Quote
Old 01-11-2014, 14:08   #56
cat herder, extreme blacksheep
 
zeehag's Avatar

Cruisers Forum Supporter

Join Date: Jul 2008
Location: furycame alley , tropics, mexico for now
Boat: 1976 FORMOSA yankee clipper 41
Posts: 17,762
Images: 56
Send a message via Yahoo to zeehag Send a message via Skype™ to zeehag
Re: Sales use Tax HELP!!!

uscg has nothing to do with it.
if you BOUGHT your boat in kali you owe boe money.
if you keep boat in a consistent locale in kali, ie,marina or mooring, you owe property tax, which is county, not state.
if boe is asking you for money, contact boe, not uscg.
coast guard is not a tax man nor associated with same and has no communication with same unless you get a lien on your boat for nonpayment of taxes.
have fun.
call the correct folks this time. if it is boe--call them.
zeehag is offline   Reply With Quote
Old 01-11-2014, 14:22   #57
Registered User

Join Date: Sep 2012
Posts: 69
Re: Sales use Tax HELP!!!

If this blows your cruising budget you need to seriously re-consider your current plan (adjusting is part of cruising). Pay the tax - if you don't, it will haunt you where ever you go. You love Cali - work another year, replenish the kitty - take the long view.

Some peoples lives were meant to serve as a warning to others.... lesson learned.
__________________
tookish1 is offline   Reply With Quote
Old 01-11-2014, 14:50   #58
֍֎֍֎֍֎֍֎֍֎

Cruisers Forum Supporter

Join Date: Apr 2006
Posts: 13,029
Re: Sales use Tax HELP!!!

It is a funny thing, but when you look at ALL the various taxes? Many states wind up costing almost the same thing overall, regardless of which way they slice the pie. Like NY charging around 6% income tax with NH having no income tax. Unless, you have investment income, which is typical for non-pension retirement accounts. Then NH takes 5%, putting it right next to NY and not at all tax-free.

The states with truly overall lower combined tax rates? Usually have no magic, they just provide fewer services. Like Florida, where they only recently started putting highway guardrails alongside the drainage canals that border so many highways and streets. Low taxes, low highway budget, no guardrails...oops, wait a minute, folks are drowning. Seriously, they just figured out a year or two ago that when you put up more guard rails, fewer cars go in the water. Or, like the bus that got taken out by a falling boulder in Colorado 10? years ago, folks were surprised to learn that's considered a normal and acceptable way to die as well. Hmmmm.....Taxes.
__________________
hellosailor is offline   Reply With Quote
Old 01-11-2014, 17:14   #59
Registered User
 
MYTraveler's Avatar

Join Date: May 2010
Posts: 166
Re: Sales use Tax HELP!!!

Quote:
Originally Posted by Shrew View Post
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.

Best of luck, its going to be tough to convince the State of CA otherwise.
Agreed, but there is a bigger problem:

Quote:
Originally Posted by Jon Neely View Post
To people that keep bring up property tax, We did indeed pay it for this last year. PAYED IN FULL.


Ironically, that the property tax created a big use tax problem. Under Ca law, the use tax is due if the vessel was subject to California property tax during the first 12 months after acquisition. See A 3 in Dsandril post (42) above:
"subject to use tax if any of the following occur:

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."


No amount of arguing that you did not use the boat in California will change that. If you are paying an attorney, make sure he understands that problem -- it would be a shame to pay a bunch of money to fight (and lose) a fight you could never have won in the first place.
__________________
MYTraveler is offline   Reply With Quote
Old 01-11-2014, 17:28   #60
Marine Service Provider
 
SV THIRD DAY's Avatar

Cruisers Forum Supporter

Join Date: Aug 2006
Location: La Paz, Mexico
Boat: 1978 Hudson Force 50 Ketch
Posts: 3,653
Re: Sales use Tax HELP!!!

Quote:
Originally Posted by Jon Neely View Post
Hello everyone. S/V Prism is currently trying to make it to mexico, we are currently holed up in A9 "Cruiser Anchorage" San Diego waiting for better wind that looks like it will come on monday. We tried to tie up any loose ends months earlier, Thinking we where all good. Back story:
Bought our HC33 in Olympia WA May 10, 2013 Did not pay WA sales Tax we where out of WA within the 90 days cruising the OR coast and CA
Sailed Down the coast and didn't officially get a slip in Berkeley CA until Oct.1 2013
We then outfitted the boat for an entire year.
Checked out of our Berkeley Slip September 24th 2014.

Last month we got a letter from the state of California wanting to see how much sales tax was paid in WA and how much we payed for the boat. After getting off the the phone with the the BOE head office I believe the guy on the the phone unofficially told me the only way not to be liable for CA sales tax if the boat was brought to CA strictly for outfitting. Which it was. We sent the letter back listing "bought out of state with no intent to use in CA" due to the outfit line. Well the day before leaving Berkeley we get a letter back from BOE not digging it. Basically saying if you brought the boat into CA within the first year of ownership you intend to use it here. Truly not the case for us.We are literarily on our way out of the country for a sizable amount of time, getting our Zarpe (official boat check out of the USA) on monday. We do not plan on sailing back to CA nor ever selling in CA. Should we go threw all of the hoops trying to make this work before we leave with what seems like a pretty unlikely chance of getting them to understand our situation. IF we bail Im guessing they will put a Lien on the boat, not sure if that will effect selling the boat outside of CA or outside the country. I wish this was a trivial amount of cash I could just write a check for but sales tax here is near 10% and this would literally kill our cursing kitty. Looking for any advice. as of now we are going to proceed with getting copies of pretty much our entire outfit with receipts and maintenance logs, marina bills and get a copy of our zarpe in there as well showing we are in fact leaving CA and the US for that matter. Im just worried if they are still not satisfied with that and if we ever do want to sell Prism we will run in the this massive lien that has been building interest over years.
Any Help to people with experience/knowledge would be HUGE!!!

Cheers,

Jon and Shannon
Svprism.com
Lets back up to the beginning because so much is getting lost here.
Car, Boat, RV...it's all the same. If you live in California and bring it into California within a year of purchase they want their money and they WILL GET IT. I know it hurts, but stop wasting your time with an attorney, you will lose, they fight and win this one every day it's a open/closed case. Outfitting IS using.

As a California Resident you can't bring the boat into the State to "refit". Refit is using it by the letter of the law. As a California resident your only way to get out of the Tax was to do what we did when buying a boat out of State. Keep it out of State for 365 days and have documentation to prove it. Or you MUST take an "off shore delivery" (essentially what you did by buying gout of State) AND then get it out of the State within 30 days. Both times when we followed the laws, we legally dodged the tax. Oh sure they tried to come get it...that is their standard procedure, but when you send them receipts proving your case...they back off.

Once you told them you had the boat in California they got you...it's too late for an attorney now.
__________________

__________________
Rich Boren Goodbye Morro Bay...Hello La Paz, Mexico and the owner of:
Cruise RO Water High Output Water
Technautic CoolBlue Refrigeration
SV THIRD DAY is offline   Reply With Quote
Reply

Tags
sale

Thread Tools
Display Modes Rate This Thread
Rate This Thread:

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Confusion About 'Use Tax' and 'Sales Tax' thelasthour Dollars & Cents 31 28-02-2012 16:16
Sales Tax and Use Tax - What the...? jpemb7 Dollars & Cents 7 18-01-2010 22:04
Sales / Use Tax Enforcement on East Coast RapidRoy Liveaboard's Forum 109 12-09-2009 17:39
Montana LLC, can you really avoid sales/use tax judybuddy Rules of the Road, Regulations & Red Tape 19 15-01-2007 17:41



Copyright 2002- Social Knowledge, LLC All Rights Reserved.

All times are GMT -7. The time now is 23:46.


Google+
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.
Social Knowledge Networks
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.

ShowCase vBulletin Plugins by Drive Thru Online, Inc.