Sales use Tax HELP!!!

[Training Wheels]

The longer you wait, the more you will pay. They will put a lien on your boat if you don't pay, with more and more interest and penalties.


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[MYTraveler]

Originally Posted by MYTraveler

Do yourself a favor and get informed. There is no secret password or game to svoid tax.

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.

[CarinaPDX]

For the many reasons previously stated the Use Tax (ILO Sales Tax) is owed, and will be collected with penalties and interest at some point. Leaving the state without paying will not only increase the ultimate costs - it leaves you exposed to seizure wherever the USCG can get to you (and perhaps elsewhere). Once the CA tax folks put a tax lien on your boat, because you have a federal documentation, it can and will be seized at the first opportunity, and need not be in California at all. Talk about a bummer...

So just pay the damn tax and get on with it. I am sympathetic, but it really is too late to avoid the tax. The best thing is to follow Zee's advice and work with the tax folks to try to get a reasonable outcome.

In the future when making large investments do the tax planning first. We would love to have had you in Oregon for a year...

[CarinaPDX]

BTW I am suspicious that once there is a tax lien on your document it may be possible for California to request Mexican authorities to seize your vessel. I don't know this for a fact but then I bet neither do you. If you are planning on skipping out on CA taxes you probably should find out first. You really don't want Mexican authorities seizing your boat at some random time in the future.

[hellosailor]

Whether the tax bill is or isn't justified, the only way to avoid penalties and interest is to PAY THE BILL as it is demanded, and then protest the payment afterwards. That prevents any additional penalties and interest from being charged. Ain't fair but that's the way it is, either you pay on the first demand, or they start the surcharges and if you lose, you lose much more. FWIW.

[Andy73]

You know... (avoiding the discussion on morality of taxes in general)... Given CA's reputation for aggressive tax collection, I am amazed at people who use any CA town for their homeport (unles happy to pay for it of course).

If you are not in CA, why not just avoid the whole issue and homeport someplace else?

[SV THIRD DAY]

Originally Posted by Andy73

You know... (avoiding the discussion on morality of taxes in general)... Given CA's reputation for aggressive tax collection, I am amazed at people who use any CA town for their homeport (unles happy to pay for it of course).

If you are not in CA, why not just avoid the whole issue and homeport someplace else?

Selecting a home port in California for your USCG Documented vessel has NOTHING to do with taxes if you owe California taxes or not...that's why...let's try to avoid starting chat room rumors.

[MYTraveler]

Originally Posted by SV THIRD DAY

Selecting a home port in California for your USCG Documented vessel has NOTHING to do with taxes if you owe California taxes or not...that's why...let's try to avoid starting chat room rumors.

California does not agree with you, especially on the property tax front.

[SV THIRD DAY]

Originally Posted by MYTraveler

California does not agree with you, especially on the property tax front.

Absolutely not true...man these rumors love to fly around. The use/property tax has Nada to due with your home port selection...rather it is based on if your boat is in California or not. We were home ported in CA but just showed we were not in the State and Shazam.....we owed no tax. California tax law is crystal clear on this...I don't understand why all the rumors and misinformation....but it is the internet I guess.

Does anyone really think the hundreds of cruising boats around the works with CA State documented cities on their stern are paying yearly property/use tax payments to CA? I guess if they were the State wouldn't be bankrupt.... Not a chance.

[Dsanduril]

Rich,

mostly agree with you, if you can properly document things you can avoid the personal property tax bill. However, you have to take all the right steps to do so, otherwise the bill will come and has to be paid. This is straight from the BoE:

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.

That applies to residents, and the BoE doesn't know documented from registered, but that aside, if the homeport of a documented vessel is in California it becomes that much more difficult to convince them that the vessel is not "habitually moored" in California. Certainly it can be done (I have, and sounds like you have), especially if the vessel spends zero days in California waters in a given year, but any evidence (address, bank accounts, etc.) that you are temporarily away from California and intend to return will be used against you. You're fighting the "habitually moored" definition, and a documentation homeport, while meaningless to the USCG, points that way to the BoE folks.

So yes, technically, having a hailing port in CA does not mean anything with regard to annual tax, but in practical terms it doesn't help.

[Ala Moana]

The San Diego Maritime Attorney that specializes in off shore deliveries and CA tax issues is Paul Trusso, 619.226.BOAT (2628)

[MYTraveler]

Originally Posted by SV THIRD DAY

Absolutely not true...man these rumors love to fly around. The use/property tax has Nada to due with your home port selection...rather it is based on if your boat is in California or not. We were home ported in CA but just showed we were not in the State and Shazam.....we owed no tax. California tax law is crystal clear on this...I don't understand why all the rumors and misinformation....but it is the internet I guess.

Does anyone really think the hundreds of cruising boats around the works with CA State documented cities on their stern are paying yearly property/use tax payments to CA? I guess if they were the State wouldn't be bankrupt.... Not a chance.

Not a rumor. The law is ambiguously based on an abtract concept of situs. Anything that suggests a nexus to Ca is relevant to that determination. Sorry but Dsanduril's quoted authority is accurate.

[roverhi]

Originally Posted by SV THIRD DAY

Absolutely not true...man these rumors love to fly around. The use/property tax has Nada to due with your home port selection...rather it is based on if your boat is in California or not. We were home ported in CA but just showed we were not in the State and Shazam.....we owed no tax. California tax law is crystal clear on this...I don't understand why all the rumors and misinformation....but it is the internet I guess.

Does anyone really think the hundreds of cruising boats around the works with CA State documented cities on their stern are paying yearly property/use tax payments to CA? I guess if they were the State wouldn't be bankrupt.... Not a chance.

Actually it's been reported a number of times how hard it is to get off the California Use Tax roles once your boat is in the system and you are a CA resident for tax purposes. Seems once they get their hooks into you they want to keep you paying whether your boats in CA or not.

[SV THIRD DAY]

Originally Posted by roverhi

Seems once they get their hooks into you they want to keep you paying whether your boats in CA or not.

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.

[CarinaPDX]

Originally Posted by SV THIRD DAY

the law is on your side.

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