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Old 06-05-2014, 23:18   #1
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Anybody Fight CA over Hailing Port/Tax BS?

in 2011 I bought a steel 1938 shipwreck in Olympia WA for $6000

It used to be owned by guy williams who played "Zorro" in the B+W Tv series so I thought it'd be fun to put 'hollywood' on the hailing port when I registered it with the USCG

just a few months later; I got a letter from CA saying I owed them use tax; I called them and politely explained the situation

The woman was unbelievably nasty and said that I was "required" and "must" and "responsible" to prove that the boat was purchased in WA and not CA

This all rubbed me very much the wrong way and struck me as very "nigerian prince" like; that is when I get a spam from nigeria asking for money; I usually don't go to a lot of effort to explain why they should kiss my butt

So like a year later CA sent me a "proposed Tax Liability" letter that was kind of amazing #1 they " Proposed" $5000 in tax on a $6000 boat

I thought about sending them a counter proposed tax proposal suggesting that they would owe me $1000 every time they sent me a letter and if they agreed to those terms and conditions they should just send me another letter


Now; OBVIOUSLY I "could" waste a few hours digging up paperwork and mailing them 'proof' but this offends me on principle to have to prove I am innocent to a state I left behind because of exactly this kind of crap so I kinda want to make their lives hell

Just wondering if anyone's dealt with a similar situation? I think they are WAY past not only their jurisdiction but even their own law on this

THe hailing port is part of the boat name to distinguish boats; to my mind this is no different than them going after anyone that named their boat "California Girl" Bam you owe CA sales tax!

Can they do a lien or garnishment without a hearing? That's my only real worry because I'm right I'm Right I'm Right nanananana!
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Old 06-05-2014, 23:32   #2
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Re: Anybody fight CA over hailing port/Tax BS?

Where do you live? Where do you keep the boat?
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Old 07-05-2014, 00:39   #3
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Re: Anybody fight CA over hailing port/Tax BS?

Xymotic-even though I am a tax attorney, I cannot offer legal advice here. But, I can say that the short answer to your question is yes, CA can file alien and can pursue you for the taxes unless you provide them documents to show (1) the boat was purchased in WA, (2) it has resided in WA since you have owned it and (3) it has never been in CA. I can appreciate your feelings towards the CA taxing folks, I deal with the IRS and CA on a fairly regular basis. But, to protect your self, you just need to bite the bullet and get them the info they need ASAP.

You should have a bill of sale that shows the sale taking place in WA, you should have marina receipts showing dockage in WA. If it is on the hard, you will need a statement from the yard, preferably notarized, outlining how long the boat has been there. If the boat is registered in WA as it should be, provide WA registration documents. If the registration has been continuous back to the prior owner, the WA DOL (Dep't of Licensing) should be able to give you the licensing history. That should satisfy CA that the boat is not in CA and has not been in CA. Even though hard to do, it also helps to be nice to the folks, they are just doing their jobs. CA is very, very aggressive about chasing boats for tax $$.

Good luck!
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Old 07-05-2014, 01:01   #4
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Re: Anybody fight CA over hailing port/Tax BS?

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Xymotic-even though I am a tax attorney, I cannot offer legal advice here. But, I can say that the short answer to your question is yes, CA can file alien and can pursue you for the taxes unless you provide them documents to show (1) the boat was purchased in WA, (2) it has resided in WA since you have owned it and (3) it has never been in CA. I can appreciate your feelings towards the CA taxing folks, I deal with the IRS and CA on a fairly regular basis. But, to protect your self, you just need to bite the bullet and get them the info they need ASAP.

You should have a bill of sale that shows the sale taking place in WA, you should have marina receipts showing dockage in WA. If it is on the hard, you will need a statement from the yard, preferably notarized, outlining how long the boat has been there. If the boat is registered in WA as it should be, provide WA registration documents. If the registration has been continuous back to the prior owner, the WA DOL (Dep't of Licensing) should be able to give you the licensing history. That should satisfy CA that the boat is not in CA and has not been in CA. Even though hard to do, it also helps to be nice to the folks, they are just doing their jobs. CA is very, very aggressive about chasing boats for tax $$.

Good luck!
Plus it doesn't just have a hailing port of California, it was previously in California. If one is in full compliance, it would be very simple to provide the documents and that would be it. 30 minutes to make copies and 30 to go to the post office and back. Plus the cost of postage.
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Old 07-05-2014, 01:21   #5
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Re: Anybody fight CA over hailing port/Tax BS?

I had the same problem with a boat I shipped out of the country. It took less than 30 minutes to send the paperwork off to the state department of revenue.
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Old 07-05-2014, 03:57   #6
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Re: Anybody fight CA over hailing port/Tax BS?

This is an excellent strategy to use when you are done with a boat that's too old and worn out to sell. Put a California hailing port on it and send them a letter saying,"I am never gonna pay!". They will come seize the boat and voila! You are free of your old derelict.
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Old 07-05-2014, 04:09   #7
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Re: Anybody fight CA over hailing port/Tax BS?

Idora:

Great idea :-)
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Old 07-05-2014, 06:31   #8
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Re: Anybody fight CA over hailing port/Tax BS?

I was disgusted to find out how California handles boat property.
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Old 07-05-2014, 06:45   #9
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Re: Anybody fight CA over hailing port/Tax BS?

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Originally Posted by JayCall View Post
Xymotic-even though I am a tax attorney, I cannot offer legal advice here. But, I can say that the short answer to your question is yes, CA can file alien and can pursue you for the taxes unless you provide them documents to show (1) the boat was purchased in WA, (2) it has resided in WA since you have owned it and (3) it has never been in CA. I can appreciate your feelings towards the CA taxing folks, I deal with the IRS and CA on a fairly regular basis. But, to protect your self, you just need to bite the bullet and get them the info they need ASAP.

You should have a bill of sale that shows the sale taking place in WA, you should have marina receipts showing dockage in WA. If it is on the hard, you will need a statement from the yard, preferably notarized, outlining how long the boat has been there. If the boat is registered in WA as it should be, provide WA registration documents. If the registration has been continuous back to the prior owner, the WA DOL (Dep't of Licensing) should be able to give you the licensing history. That should satisfy CA that the boat is not in CA and has not been in CA. Even though hard to do, it also helps to be nice to the folks, they are just doing their jobs. CA is very, very aggressive about chasing boats for tax $$.

Good luck!
Interesting. Why doesn't CA have to prove the boat was purchased in CA before demanding money?

I would wipe my ass on it and send it back to them. If they file a lien I would fight it and sue them for legal fees. It's common knowledge that USCG hailing port has nothing to do with vessel location, hence if CA is using that as their 'evidence', they truly are a messed up bunch (but I think that's an already known fact).
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Old 07-05-2014, 07:03   #10
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Re: Anybody fight CA over hailing port/Tax BS?

Does not pay to start a fight with those guys, regardless of your personal feelings. The person who was nasty on the phone, will remain so, whether you do anything or not. If they put a lien on the vessel, your problems compound exponentially. Supply the proof and move on, unless you just like to fight city hall.
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Old 07-05-2014, 07:41   #11
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Re: Anybody fight CA over hailing port/Tax BS?

The USCG is a national organization. When you send them documentation papers and list your hailing port, that is the same as saying that is the main port of call, or location of the boat. Even if your address is in Washington. You would not be the first person that kept a boat berthed in a state in which you did not reside.

You opened the can of worms by listing Hollywood as the hailing port, which puts the ball in your court to prove that it's not actually berthed there. You'll expend far more negative energy fighting them than the amount of time it would take to put together the required documentation and clear the matter up. Unless you just enjoy the sporting aspect of the fight.
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Old 07-05-2014, 07:43   #12
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Re: Anybody fight CA over hailing port/Tax BS?

After they see $6000 on a bill of sale, you won't hear from them again. In the CG database a 63ft boat from Hollywood looks like a payday for good detective work.

I'd just write a letter saying it's never been to California during your ownership and not bother copying things like marina receipts unless they ask. I would enclose a picture or two supporting that $6000 number and even mention the movie actor to explain the Hollywood choice. Tax people aren't known for their sense of humor but they clearly think there's a different reason you picked that hailing port.

Ignoring them just makes them think you're hiding something.
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Old 07-05-2014, 07:44   #13
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Re: Anybody fight CA over hailing port/Tax BS?

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Originally Posted by DotDun View Post
Interesting. Why doesn't CA have to prove the boat was purchased in CA before demanding money?

I would wipe my ass on it and send it back to them. If they file a lien I would fight it and sue them for legal fees. It's common knowledge that USCG hailing port has nothing to do with vessel location, hence if CA is using that as their 'evidence', they truly are a messed up bunch (but I think that's an already known fact).

They're not the only state to do this. Galaxy Girl just posted a topic on this same issue.

Hailing Port and Tax Implication

Grow up, send them the paperwork and be done with it.
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Old 07-05-2014, 07:53   #14
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Re: Anybody fight CA over hailing port/Tax BS?

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Interesting. Why doesn't CA have to prove the boat was purchased in CA before demanding money?

I would wipe my ass on it and send it back to them. If they file a lien I would fight it and sue them for legal fees. It's common knowledge that USCG hailing port has nothing to do with vessel location, hence if CA is using that as their 'evidence', they truly are a messed up bunch (but I think that's an already known fact).
You could do a lot of things, but interesting that the OP hasn't even answered the basic questions we asked here yet. Boat was in CA at one time. It's quite reasonable for them to ask for evidence it was moved prior to the sale and wasn't purchased brought back to the state. It's not just the hailing port that brought the attention. It's that it was previously in CA and probably being taxed in CA.
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Old 07-05-2014, 08:04   #15
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Re: Anybody fight CA over hailing port/Tax BS?

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Originally Posted by oldragbaggers View Post
The USCG is a national organization. When you send them documentation papers and list your hailing port, that is the same as saying that is the main port of call, or location of the boat.
Not true...

Quote:
The hailing port is not restricted to where the owner lives or where the vessel is moored. Under new marking regulations, the hailing port can be any recognized place listed in the U.S. Department of Commerce Publication 55DC. This includes all listed places in the United States or its territories.
FAQs

I've witnessed hailing ports from Colorado, Iowa, Kansas, all locations that aren't even close to water big enough for the vessel displaying the port.
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