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Old 02-03-2008, 03:51   #1
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buying a boat in California

My soon to be new to me tri is a documented vessel located at in Southern Cal.
Does any one on the list have an idea of what taxes or fees would be due by Cal.
The chap who bought my previous tri when I was in Cal is being dunned by the state to pay a use tax. I don't know how much it is but he has said it is exorbitant. He removed the boat almost immediately from Cal, sailing to Washington state.
This makes me nervous about buying my next boat in Cal. I plan to take the boat to Mexico and then to its new home port here in Hawaii. I have heard of people taking possession in Mexico to avoid fees.
Any suggestions or experiences would be appreciated.
Rich
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Old 02-03-2008, 08:52   #2
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I bought my boat in Canada but am a California resident. As such I have taken alot of precaustions to prove that the boat has not come into the Grating Ste of Kalifornia. The tax is at the rate at which the county where the boat is stored. Somewhere between 7% and 8%. There are complex requirements about getting the boat out of the state and having the papers signed off shore. I ended up hiring AeroMarine tax Services. They seem to be knowledgable and thorough but have yet to recieve a final tax return from the Grating State of Kalifornia yet but I was slow to get the paperwork off the Aeromarine. My advice is to find a specialist and have the paperwork signed in Mexico with a delivery skipper and notarized papers that it occurred in Mexico and as much documentation as possible showing that it took place in Mexico. Depending on the price of the boat say < than $50k it might not be worth trying to avoid paying a tax that shouldn't have to be paid.
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Old 02-03-2008, 10:17   #3
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My boats in Alameda. Use tax is $211 a year on $18,000 assessed valuation. Believe that varies from city to city but probably not a whole lot. Still best to check in the area you plan on keeping the boat. Sales tax, due at purchase of vessel, is slightly over 8% in most areas of California. Varies by a few 1/10th of a percentage depending on location.

By the way, the value is the assessed value for use tax. They valued the boat higher than what I paid for it. Hope they don't find out how much money I've put into it since purchase.

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Old 02-03-2008, 11:40   #4
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Red Horse
You can get out of paying the Ca use and sales tax. If you are not a Ca resident and the boat is not staying in Ca. There are certain rules that must be followed (time boat can stay in Ca amount of days boat used in ca prior to departure) etc. We used a lawyer based in San Diego it was worth the fee he charged. We now have a piece of paper from Ca releasing us from the Ca sales tax.
Let me know if you want the firms name. I don't remember it off of the top of my head.
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Old 02-03-2008, 11:49   #5
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Buying a boat in Cal

Hi folks,
I completed the boat I sold in 2003 and had to sell it in 2005. We were lucky to get 40,000 for it. I imagine the State of Cal considered it a new boat and has hit the new owner with fees they consider appropriate for a new vessel, plus penalty's.
The boat I want to buy was built in 69. The present owner has said he has a broker who is current on present procedures. I just don't want any surprises. If this boat didn't have so much new stuff on it I would consider giving it a pass. I don't need the aggravation of dealing with Cal. Glad I'm not a resident there anymore.
Rich
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Old 02-03-2008, 11:59   #6
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Buying a boat in Cal

Gudgeon,
Thanks, I would appreciate the name of the lawyer you used. The new owner of my boat had contacted the attorney for my ex daughter in law with this matter which is how I found out about it. The sale actually took place at Coronado where the Evil Step Daughter lives. She had her lawyer fwd the matter to me. Not surprising.
I will also fwd. the lawyers name to the purchaser of my boat to help him out. Do you want my email or do you want to post here on the forum?
Red Horse
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Old 02-03-2008, 17:40   #7
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Old 03-03-2008, 11:01   #8
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Avoiding CA sales tax is pretty straight forward. As I recall, all I had to do was show proof that the boat was being kept outside the state for 1 year. I believe there is legislation in process to reduce that amount of time to 3 mos as it was previously. I didn't use an agent, just followed the instructions given me by the State Board of Equalization. I think all they wanted was date and place of purchase and marina receipts showing that the boat was outside the state and at the end of the year I recieved my exemption certificate in the mail. If you are buying the boat in CA you will have to take possesion outside the state.

Mike
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Old 03-03-2008, 15:50   #9
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I've been looking as well...

...to come down and look to purchase a boat. Being an Oregon resident, I’m not fond of the idea of paying state sales tax (none in Oregon). After speaking with three people in the tax department – I’m still confused. It shouldn’t be that difficult to sell something to an out-of-stater. I’m beginning to think looking in Washington is a better idea.
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Old 03-03-2008, 16:13   #10
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I must say that Mike's case is more unusual than the norm. The key is to recieve the boat offshore and then to make sure CA is not your first port of call. That makes it hard b/c, in your case, you would have to have someone deliver the boat to you offshore and then take it to OR which can be a nasty trip depending on the time of year. The Grating State of Kalifornia does not care about storms or safety they just want there takx dollar. On the otherhand if you want to buy a boat in So Cal and then deliver it to Mexico well that is a different story. The Use Tax law on boats was one of the contributing factors to the death of the pleasure boat industry in Kalifornia.
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Old 03-03-2008, 17:01   #11
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Thanks Charlie

Your right – if the timing were perfect, it would work. But I think it would be difficult to take ownership of the boat “On the way out” sort of speak. I doubt the tax department would understand the concept of a weather window.
Oh well. Maybe I’ll just come down and look; and give my money to the hotel industry instead.
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Old 03-03-2008, 17:15   #12
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Anyone planning to join the "90 Day Yacht Club" would be well advised to hurry-up. California has a deficit of what.... 16 billion or so this year? They're gonna look at all us 'rich' yacht buyers.....

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Old 03-03-2008, 20:29   #13
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The advice I got, when I (a Washington resident) bought a California boat this year was as follows:

You must receive the boat offshore (beyond the 3 mile limit). Put the lat/long of the delivery location in the sales agreement. Then, went delivery day comes, the current owner sails the boat to the delivery location, and hands you the keys. You have now completed an offshore delivery. You can return to California (to drop off the previous owner, if nothing else ;-) but you must leave the state within 90 days.

If you have a documented vessel (as I do), the rest of the process goes like this (although I have not gone through it all yet, so we'll see). Keep your sales agreement, and documentation of your arrival in another state (or country I suppose). Fuel and moorage receipts are fine. In my case, also keep proof that you paid sales tax in the state where you will be keeping the boat (Washington for me). For you, no tax in Oregon, so just prove the boat is in Oregon, and that you have registered it there.

When the Homeland security folks eventually change your title, the state of Cal will detect the change and contact you to get sales tax. When they do, you provide them with the above documentation, and they go away.

Or at least I hope that is the way it works, that is what I did.

Kevin
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Old 17-03-2009, 09:01   #14
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Thank you Kevinmac. Doesn't sound horrible.
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Old 17-03-2009, 11:17   #15
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MABell:

I have never heard of the 90 day rule on leaving the state. Not saying it is not true just never heard of it. I would double check that information. I spent a fair bit of time researching this when I bought my boat but the situation was different b/c the boat was already out of California.
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Between us there was, as I have already said somewhere, the bond of the sea. Besides holding our hearts together through long periods of separation, it had the effect of making us tolerant of each other's yarns -- and even convictions. Heart of Darkness
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