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Old 03-11-2014, 07:01   #76
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Re: Sales use Tax HELP!!!

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Originally Posted by CarinaPDX View Post
I don't see how you got to that conclusion. Every way that the OP was hoping to get out of this has been comprehensively refuted, complete with excerpts of the relevant laws. Not to mention the absurd claim that one can live aboard a boat in a marina for more than a year but not "use" it - that certainly is a form of use. (Reminds me of a certain prez asserting that "oral sex" isn't sex )

If the OP is still in denial then he should invest in a good lawyer. It is pretty clear that if he has any hope of working out of this he is going to need a great one. IMHO it is a waste of money, but at least an honest one.

Greg
Oh the OP definitely owes the tax...his boat was in California end of story.
My comments were not about his case but to other posters that were giving CA some super powers they dont have. Sometimes it hard to follow the comments in context to what's being applied to. The OP owes the tax by the letter and intent of the law....it is done.
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Old 03-11-2014, 08:52   #77
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Re: Sales use Tax HELP!!!

Certainly not in denial here... After a lot of research we are paying the tax. end of story, we are going to do our best to get it down with the 'tangible personal property' that is written into the tax code. Luckily Prism came handsomely outfitted with lots of personal property. I am going to start the whole process in T-minus 15 minutes so wish me luck. I will defiantly dive into property tax while Im on the case and see if they are going to still hunt me down for it when the boat is clearly outside the country. It might come down to changing the home port if that really what California is looking at. From what I have been told the home port is nothing more than that and should have no state tax ramifications at all. Being self employed my income tax is still done out of cali where my accountant takes care of it. Anyways we shall overcome this. Looking to the bright future of mexican water cruising! See you guys there!


Cheers,

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Old 03-11-2014, 11:10   #78
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Re: Sales use Tax HELP!!!

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My post sounds harsh, but wasn't intended that way. Since I can no longer edit, the best I can do now is say sorry for any offense.
No offense taken, I'll just continue to take it in the shorts for three more years, then I'm sure take it again when I liquidate assets, but I plan on leaving and avoiding as much tax as I can by not being here. I just won't play the game, it leaves a bad taste in my mouth and frankly I'm not good at lieing or becoming indignant when I'm caught.
I've seen many people that on paper make little money, the business owns the airplane, the boat and the vacation house and all are written off one way or another, you travel to a seminar in Orlando, or Jackson Hole, spend a week there, sign up for a seminar or two, write it off as a business trip. Hell how often does Congress go on all expense paid Junkets, or do they still do that.
Need new furniture, let the business buy the real good stuff, let it sit in your office for a month before it comes home, another write off, hey before you know it, your business isn't making very much, guess the tax burden is less huh?

Or where I work now, spoof the local Government into believing your adding a bunch of jobs and they decide to give you a large grant for doing so, then it becomes apparent to you that if anything you will be downsizing soon, certainly not adding jobs, but do you tell them that? Of course not! Take that money, don't be a fool.
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Old 03-11-2014, 14:35   #79
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Re: Sales use Tax HELP!!!

It is sad that the OP got hit with an unexpected tax that will likely hurt a lot. Spilt milk at this point. For others planning to buy a boat and go cruising the lesson is to do the tax planning in advance. It often makes sense to relocate for a few months to a year before departure to a state with more favorable tax treatment. I can't provide advice for the east coast but on the west coast there is one attractive destination: Oregon.

We have no sales taxes here, so had the OP come here within days of the purchase in Washington there would be no sales/use tax owed (and all the new gear would be bought sans tax). Also no annual personal property tax - bi-annual registration for my boat is about $100. We do have a 9-10% income tax, but after a year of living outside the state (and still retaining legal residency) that tax is no longer owed. (Having Oregon residency, then becoming transient - and leaving the US - one remains a legal resident. By not retaining a physical residence within Oregon, and not spending more than a month a year inside Oregon, one becomes a Special Case resident who does not pay state income tax.)

Also, by not using the boat inside Oregon waters, state registration is not required by Oregon. While outside of the US I did not pay for state registration. I did renew it before returning to the US, because without it other states may require registration in their state, at much higher cost.

Personally I didn't do anything differently because I have lived here since 1974. It may make sense for others to plan a stay here. I am not a tax lawyer so don't quote me - just do your own research first before incurring tax obligations.

Greg
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Old 03-11-2014, 16:10   #80
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Re: Sales use Tax HELP!!!

a64-
All that nifty "presto! change-oh!" stuff sometimes does work. And at other times, it just provides gobs of physical evidence of tax fraud. Creative folks have always found ways to get away with murder. Sometimes, it is a beautiful thing to behold. Although it might just be easier to steal a boat, put new numbers on it, and not bother about taxes at all, no? (G)
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Old 03-11-2014, 16:21   #81
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Re: Sales use Tax HELP!!!

Just look at the advice on this thread about how to avoid taxes, now I'm in no way saying any of this stuff isn't legal, but it does avoid the tax doesn't it? The OP who started this thread would I'm sure if he had known how would have avoided the tax, but he didn't know the game, so he gets the shaft.
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Old 03-11-2014, 16:26   #82
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Re: Sales use Tax HELP!!!

Greenhand,

You may be right, if so, that has changed since we left. Way back then, Jim spoke with the Tax Assessor's office, and was told, "Yes, it isn't fair. If it were me, I'd register in another State." Jim took this advice.
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Old 03-11-2014, 23:33   #83
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Re: Sales use Tax HELP!!!

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Originally Posted by SV THIRD DAY View Post
Doesn't matter what they want or how hard it is....the law is on your side.
Why let some beurocrt bully you? Na...on second thought just pay a tax you don't owe and then complain out it...that's certainly easier than standing up for your legal rights. Pardon me for speaking truth to hysteria and the tax man.
Hey Rich,

I actually agree with everything you are saying. I guess my question boils down to, if California is taking the approach of issuing a tax notice and forcing the person to fight it (as indicated by the small sample of people talking about it here). Then, IF you aren't associated with California, why would you risk having to deal with it by putting a Cal Town on the back of your boat...

Anyway, it doesn't really affect me, just something I would personally avoid. Thanks for your input
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Old 04-11-2014, 06:44   #84
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Re: Sales use Tax HELP!!!

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Originally Posted by Andy73 View Post
Then, IF you aren't associated with California, why would you risk having to deal with it by putting a Cal Town on the back of your boat...
Some people love to pick a fight. Me? I like to take the easy way out.
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Old 04-11-2014, 07:33   #85
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Re: Sales use Tax HELP!!!

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As someone who does pay his sales tax, here is my take :

You were resident in the states when you bought the boat, and were for another 18 months afterwards. That means you should be paying sales tax SOMEWHERE - either WA, CA, or some other home state. The spirit of the law is not that you can just keep moving the boat around, and never pay sales tax.

I don't know what on earth made you think you could avoid it.

Cough up the cash, you haven't got a (moral) leg to stand on.
THIS!!!!

If you did not pay sales tax elsewhere you are going to have to pay either sales or use tax in California for 2013 and property tax for 2014. If the boat is still in CA on Jan 1 2015 you will need to pay property tax again. The good news is that it may be tax deductible for you.
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Old 04-11-2014, 07:46   #86
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Re: Sales use Tax HELP!!!

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Originally Posted by Kenomac View Post
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.
You are confusing USE TAX and PROPERTY TAX. You pay either use tax or sales tax but NOT both, you only pay once and both are close to 10%. Property tax is paid every year that you own the boat as of Jan 1 and is around 1.2%.
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Old 04-11-2014, 10:37   #87
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Re: Sales use Tax HELP!!!

a64-
The IRS will be the first ones to tell you: tax avoidance is perfectly legal. Tax evasion is not. Trip to Bangkok to visit the red light district? Not deductible. Same trip, to spend a week with a licensed sex surrogate on your psychiatrists written orders? Now it is a legitimate medical expense, fully deductible. Although they might say you have to pay your half of the meal tabs.(G)

Avoidance, evasion....sometimes it is a fine line.

I'm still trying to convince the IRS that my parole officer said I MUST spend more time on the water, conventional anger management therapy just isn't as effective. They said he's not a licensed physician but I can't see why that matters.
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Old 04-11-2014, 19:09   #88
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Re: Sales use Tax HELP!!!

I think this thread has pretty much run its course, but in the interest of anybody still reading, or finding it down the road, here is the California Bureau of Equalization's analysis and position paper on the annual property tax question and definition of situs:

http://www.boe.ca.gov/proptaxes/pdf/860_0043.pdf
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Old 04-11-2014, 20:42   #89
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Re: Sales use Tax HELP!!!

Are you sure you posted the right tax opinion ? The facts in that case are quite different to OP's situation. In that case there was no dispute that the boat had already left CA. The only live issue was how it ought to be taxed.
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Old 04-11-2014, 21:07   #90
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Re: Sales use Tax HELP!!!

Doesn't sound different from the OP's situation at all, to me.
Boat was homeported in CA.
Owner brought the boat into Cali waters.
Owner's residence was aboard the boat, and that was in Cali.

So the matters raised (residence, homeport, presence in waters) all seem spot on.
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