Sales use Tax HELP!!!

[savoir]

All I can do is tell you.

In the annexed opinion Mr Nauman does not address the issues of a liveaboard owner or a boat bought outside CA and moved there. He does consider CA boat registration but that aspect is not significant to OP. Nauman limits himself to the taxing of a boat that moves from inside to outside CA.

He does not consider the tax implications of either of the words "use" or "storage" and those are the words that are important to the original question.

The second opinion turns on the taxation of a boat which changes location twice - once to a new county and once out of state.

[Dsanduril]

The boat being bought outside of California is now moot per the OP's own declaration. Last year while in California the OP received, accepted and paid a CA personal property tax bill for the boat.

With regard to the original sales/use tax question payment of the property tax bill triggered test #3 of the sales/use tax law as cited previously in this thread and the vessel automatically became subject to payment of the sales/use tax.

With regard to the personal property tax rules, payment of last year's taxes established the situs of the vessel in CA. Per the opinions posted in the link, the onus of establishing a situs outside of CA now falls upon the taxpayer, not the state. The county will now continue to bill for personal property tax forever unless refuted by the taxpayer. Per the cited decisions there are two possible courses; one directly addressed and one inferred.

If the owner is a CA resident then he must demonstrate to the taxing authority that the vessel is no longer "habitually moored" in CA. Note that per the cited decisions simple removal from the state is not sufficient, the taxpayer must demonstrate that the move is intended to be permanent. In at least one case that I know of an assessor has successfully argued that placement of the owner's name on a marina waiting list was sufficient to establish an intent for the vessel to return to CA. This is directly on point with the cited arguments and decisions.

The alternate course, not discussed in the documents, is that the owner is not a CA resident, in this case the personal property tax is only due during the time the vessel is actually in CA (on the lien date, which is Jan. 1). Removal of the vessel from CA stops the taxing nexus, as long as the owner can demonstrate that he/she is not a CA resident.

[dohenyboy]

There will be no lien on the boat. That is not how it works. The owner of the boat, as per the USCG documentation, gets assessed for the sales tax and penalties. If it is not paid, it becomes a lien on the owner and will be on the owner's credit report. If the owner ever tries to get a home mortgage it will likely have to be paid.


Sent from an undisclosed location on the high seas or from the lounge chair by the pool, you decide.

[dohenyboy]

There was a recent decade in California in which the state's population increased by 10 million but the number of taxpayers increased by only 200,000. You can guess what is happening. The governor expressly welcomes illegals to the state. Illegals do pay sales taxes and indirectly property taxes, but cannot legally work so, working under the table, do not pay income tax. The US born children get welfare and the medical care is effectively free. Many homes in the affluent areas are owned by non residents. Warren Buffet has a house in Laguna Beach worth over $5 million but he pays only about $1000 a month in property taxes, if that, because he bought long ago. Something like 10 or 20 % of the income tax is paid by less than 1000 persons. The top marginal rate of about 13% kicks in at about $50,000. Its difficult to live decently on less than $80,000 a year.The result is that the middle class is squeezed.


Sent from an undisclosed location on the high seas or from the lounge chair by the pool, you decide.

[Boatguy30]

I believe buffets first advice to the previous govenator was to raise property taxes.

Seems to me plenty of employers are saving a boatload in payroll taxes on all that illegal labor as well. Supply and demand can't blame it all on the immigrants.

On a side note, was down at the marine supply and ran into an employee of the local school district. He had recently bought a boat for around $250k, has some other income whatever I'm not sure but his day job is for the school system.

I asked him where she's moored? "IN Georgia" don't want to pay th sales tax! Now sales tax and property tax is all that pays this guys salary! And since he only has one residence and one boat there's no legal way for a individual to avoid the tax as the FL states that if you "intended" to use the boat in FL when you bought it tax is due even if registered in another state for 6 months. So I would say any tax collector should nail him, but you never know.

[hellosailor]

Boatguy, don't worry. Like so many Florida school officials, that one is going to get a surprise. Georgia says:
"Boats
Boats that are kept in a county other than where the owner lives are returned where they are kept for at least 180 days or more out of the year.

Nonresidents
Nonresidents that have real or personal property located in Georgia are required to file a return for the property in the county where the property is located. "

I'm not sure what the "Boats" section means, I'm only fluent in four or five English tongues and Georgian ain't onea them. But between them all? Someone is going to be walking the docks, or screening the registration lists, or reading the documentation lists, and they're going to send that man a nice demand letter.

If he's smart, he'll just copy someone else's papers and forge the HIN on his boat, so when they come looking, everything checks out. On paper. IIRC it is only a five year federal felony when you're caught for forgery.

[Boatguy30]

The smartest states require a proof of previous tax paid. FL doesn't if you have registered in another state for 6 months and you tell them you had no intention of bringing the boat to Florida when you purchased it. so if you buy a boat in RI, register it there, stash it in a few states along the east coast for 6 months you can MAYBE save yourself 15K.

Interestingly, FLs big conservative innovation was to cap sales tax on boats to 18k a few years ago. So the small guys buying a boat locally still pay up in full and the big guys still cheat. And the politicans can call it a big tax "cut"!

[avb3]

Originally Posted by Boatguy30

The smartest states require a proof of previous tax paid. FL doesn't if you have registered in another state for 6 months and you tell them you had no intention of bringing the boat to Florida when you purchased it. so if you buy a boat in RI, register it there, stash it in a few states along the east coast for 6 months you can MAYBE save yourself 15K.

Interestingly, FLs big conservative innovation was to cap sales tax on boats to 18k a few years ago. So the small guys buying a boat locally still pay up in full and the big guys still cheat. And the politicans can call it a big tax "cut"!

Florida has an interesting system whereby if you buy a boat from a broker, you need to pay sales tax on the whole deal.

If you buy it privately, you only have to pay for the boat, but any accessories, parts, etc. are tax free if you have two bills of sales.

Sounds a bit like a bar room lawyer telling you a story, doesn't it. Nope, and here is the DMV site itself actually outlining and effectively encouraging it.

Official Website Florida Department of Highway Safety and Motor Vehicles

Saved me a bunch of money when this was pointed out to me.

[SV THIRD DAY]

Originally Posted by dohenyboy

There was a recent decade in California in which the state's population increased by 10 million but the number of taxpayers increased by only 200,000. You can guess what is happening. The governor expressly welcomes illegals to the state. Illegals do pay sales taxes and indirectly property taxes, but cannot legally work so, working under the table, do not pay income tax. The US born children get welfare and the medical care is effectively free. Many homes in the affluent areas are owned by non residents. Warren Buffet has a house in Laguna Beach worth over $5 million but he pays only about $1000 a month in property taxes, if that, because he bought long ago. Something like 10 or 20 % of the income tax is paid by less than 1000 persons. The top marginal rate of about 13% kicks in at about $50,000. Its difficult to live decently on less than $80,000 a year.The result is that the middle class is squeezed.


Sent from an undisclosed location on the high seas or from the lounge chair by the pool, you decide.

Don't panic.
Obama's about to legalize about 5 million hertofor illegal immigrants.
Problem solved....welcome Dictatorship but you will have cheap veggies.

[Dsanduril]

Originally Posted by dohenyboy

There will be no lien on the boat. That is not how it works. The owner of the boat, as per the USCG documentation, gets assessed for the sales tax and penalties. If it is not paid, it becomes a lien on the owner and will be on the owner's credit report. If the owner ever tries to get a home mortgage it will likely have to be paid.

Sent from an undisclosed location on the high seas or from the lounge chair by the pool, you decide.

To the contrary, it can become a lien on the owner, a lien on the boat, a lien on other property owned by the same owner, or the property can be seized and sold to satisfy the lien:

The California Supreme Court addressed this issue in T. M. Cobb Co. v. County of Los Angeles, 16 Cal.3d 606, 618 -620 (Cal. 1976). The Court analyzed the California tax code and explained that a taxing authority in California has four ways of collecting unsecured personal property taxes.

First, the taxing authority may sue the taxpayer for the recovery of delinquent taxes or assessments, with penalties and costs. (Section 3003) If the taxing authority obtains a lien, the lien is subordinate to the rights of all prior lien holders pursuant to Section 2897.

Second, the official collecting taxes on the unsecured roll may file in the office of the county clerk a certificate specifying certain facts and obtain a summary judgment against the taxpayer entered by the court clerk without a hearing. This procedure results in a judgment lien against all property in any county where the lien is filed, and any such property acquired in the next 10 years. (Section 3101 et seq.; Section 3103) Again, the lien is subordinate to the rights of all prior lien holders pursuant to Section 2897.

Third, the tax collector or assessor may file a certificate of delinquency for record in the county recorder’s office. (Section 2191.3 and 2191.4) From the time of such filing the amount required to be paid together with interest and penalty “constitutes a lien upon all personal and real property in the county owned by and then assessed to and in the same name as the taxpayer named in such certificate or acquired by him in such name before the lien expires.” A lien obtained this way is subordinate to any other lien prior in time under section 2191.5.

The fourth method of collection is found in Sections 2914-2921, which permit the tax collector to seize and sell any personal property “belonging or assessed to the assessee.” Though the tax collector’s power seems broad, the Court in the T.M. Cobb Co. case pointed out an important limitation on the ‘seize and sell’ power granted to the tax collector for personal property taxes.

Relying on basic principles of statutory construction, the Court noted that if the Legislature intended to create a superior lien on personal property to secure the collection of taxes, it would have done so by explicit language to that effect. Since the Legislature did not provide for personal property tax liens to be superior to other liens, then there is no basis for a tax collector to claim a super-priority lien over prior existing liens on a taxpayer’s personal property.

The bottom line of the Court’s ruling in the T.M. Cobb Co. case is that while a personal property tax collector may seize personal property belonging to or assessed to the taxpayer, the tax collector’s claim is subordinate to any prior existing liens on the personal property, so the tax collector must defer to superior lien holders before disposing of seized property.

If the bank has a lien (because of a loan) that lien is superior, but otherwise the tax man can lien the vessel as much as he likes.

[Boatguy30]

Originally Posted by SV THIRD DAY

Don't panic.
Obama's about to legalize about 5 million hertofor illegal immigrants.
Problem solved....welcome Dictatorship but you will have cheap veggies.

You just need to stop hiring those guys or supporting businesses that do if it worries you. I'm sort of joking, but I've seen nothing but white guys and a few blacks cutting lawns in St Augustine and one construction crew in 3 years with Mexicans and in that case all the contractors trucks had Illinois plates.......

A good friend/ republican friend of mine in Chicago told me "I just couldn't do business without my illegal labor" I told him sure you could; it would just cost you a little more money.

[savoir]

Every gardener in Rhode Island is from central America or Dominican Republic. Usually the foreman takes a fixed price and he pays the workers in cash.