Avoiding California tax (legally)

[model 10]

Originally Posted by SV THIRD DAY

Online ordering my friend...I never make a large purchase in California. Out of principal, I purchase out of state tax free...its the only way to starve the beast.

Perhaps you should move out of the state. Your interests don't supersede those who don't have a yacht, a paved street clean water etc. California has a bunch of everything and it costs.

[SV THIRD DAY]

Originally Posted by Guy

Perhaps you should move out of the state. Your interests don't supersede those who don't have a yacht, a paved street clean water etc. California has a bunch of everything and it costs.

Like most producers...its in the works my friend. What will happen when those pulling the cart stop....

[Boatguy30]

Who cares? On a 10k Craigslist boat. Have the seller give you the title, ask them not to date it. Do your work then register in SD a week or so before you leave CA. Maybe you'll get caught what a 1% chance of having to pay $900? What a time waster.

[SV THIRD DAY]

Does that advice hold on a $120k boat?
That is $10,800....some nice refit money.

[TacomaSailor]

Use Tax Penalties

Here are some quotes from the Board of Equalization site. Remember - the BoE decides IF and WHEN you owe the tax. What you think, do, or scheme to do makes no difference to them. You are guilty unless you prove yourself innocent and they own the judge and jury!

Collection Cost Recovery Fee The BOE is required by law to impose a collection cost recovery fee (CRF) on past due liabilities. The CRF is intended to cover costs incurred in obtaining payment of past due amounts and it applies to most tax and fee programs administered by us. You may be assessed a CRF if you: • Do not pay your amount due in full within 90 days after the demand notice is issued • Do not timely enter into a payment plan and successfully complete the terms of the agreement

Interest. The rate of interest applied to underpayments of taxes differs from the rate of interest paid on overpayments of taxes. The interest rate based on the rate charged by the Internal Revenue Service plus 3 percent applies to unpaid or underpaid taxes

Penalty charges. You are subject to: • A 10 percent penalty if you do not file your tax return by its due date

If you do not pay the tax amount due by the due date on the notice (30 days from the date the billing was issued), an additional 10 percent penalty will apply to the amount of overdue tax unless you file a timely appeal, as explained in the Notice of Determination. Please refer to publication 17, Appeals Procedures Sales and Use Taxes and Special Taxes, to file a timely appeal. When we make a decision on your appeal, you will receive a Notice of Redetermination. If you do not pay the tax amount due by the due date for the redetermination (30 days from the date the notice was issued), a 10 percent penalty will apply to any unpaid tax amount due. Interest continues to accrue on any unpaid tax whether or not an appeal is filed.

[Water Dragon]

On consideration, I think I'll just avoid the California hassle and go find a boat in Oregon instead, and do my work in the winter weather. It'll be a shorter drive anyway, as I'm already in the region for a job.

[jacks88]

Wow! I think I'll just call the BOE.

I live in Texas but have found a boat in California I want to buy. I would have thought that I would be exempt from California Use Tax (buying from a private party), but now I'm not sure. I may use the boat for a couple of years for cruising up and down the West Coast and Alaska, and probably as far south as Cabo. If I buy the boat, register it in Texas where I live, then use it all along the West Coast, am I still liable for California Use Tax?

[SV THIRD DAY]

Originally Posted by jacks88

Wow! I think I'll just call the BOE.

I live in Texas but have found a boat in California I want to buy. I would have thought that I would be exempt from California Use Tax (buying from a private party), but now I'm not sure. I may use the boat for a couple of years for cruising up and down the West Coast and Alaska, and probably as far south as Cabo. If I buy the boat, register it in Texas where I live, then use it all along the West Coast, am I still liable for California Use Tax?

Amigo...if the boat doesn't leave the Golden State withing the legal time line OR if it comes back into the State in less than a year from leaving....BOOM....KA PAW....SPLAT...you will Owe Sales Tax on the purchase price at minimum and possibly on the yearly property tax if they catch you during the assessment period.
You will also be asked to PROVE that you left the State and didn't come back with records, receipts and hard proof. No just because you say it, they will laugh at that and go after you like a pit bull.
Doesn't matter where you register it.
Doesn't matter that you are not a Californian citizen.
Welfare/handout programs are expensive my friend...and the people with money enough to afford a "Yacht" in the view of the State are milk cows...Moooo Mooooo

[TacomaSailor]

Read the California Board of Equalization FAQ on their website:

"What items are subject to use tax?

Generally, if the item would have been taxable if purchased from a California retailer, it is subject to use tax.

"Private party sales or brokered transactions are normally subject to use tax. If the first use of the property occurs in California, use tax may apply even if the purchaser is not a resident of the state."

UNLESS you can prove you registered the boat in another state, paid sales tax and property tax in that state, and had a residency in that state.

[Capt Phil]

Originally Posted by jacks88

Wow! I think I'll just call the BOE.

I live in Texas but have found a boat in California I want to buy. I would have thought that I would be exempt from California Use Tax (buying from a private party), but now I'm not sure. I may use the boat for a couple of years for cruising up and down the West Coast and Alaska, and probably as far south as Cabo. If I buy the boat, register it in Texas where I live, then use it all along the West Coast, am I still liable for California Use Tax?

Be very careful or you will be totally screwed and won't even get a kiss!
Not only will you be liable for sales tax in CA but you will probably be assessed for the use tax as well depending on which county you plan to do your cruising.
The Franchise Tax Board in CA is very unforgiving and will haunt you where ever you go in the U.S. Putting liens against property, bank accounts , vehicles or any asset you have or might squire is the practice they employ to get what they consider as 'their' $.
As an alternative, take delivery and consummate the sale outside of CA either in Oregon, Washington State or preferably offshore or in Mexico and document everything including GPS co-ordinates meticulously. Any CA broker can explain the dance you must go through. Remember, if you do buy a boat within State boundaries of CA, and use it within the state for even one day, you may be liable for tax! The CA tax folks are relentless and you are guilty until proven innocent to THEIR satisfaction.
Big reason why I closed my business in CA and will not even buy gas there! Phil

[Lepke]

Look in BC. The Canadian US exchange rate is about $75 US = $100 Canadian.
These guys have one of best web sites: Pacific Boat Brokers Inc.
I bought my current boat from them. It was Canadian registered, but US built. Total import cost was $12. You can take documentation papers to the Coast Guard yourself and avoid using a service.
I formerly commercial fished the US West Coast. Southern Oregon often has good winter weather between storms. I remember an 80° day in December or January along with other warm days in Brookings. I winter on the Columbia River and it's too cold for resin or paint after about mid October unless the work area is covered and heated.
Find a place you want to haul out 1st and use that as your address. No sales tax in Oregon.
If you're buying an inexpensive boat that can't make a coastal voyage under power or sail, you probably can't afford to make it seaworthy.

[jacks88]

Geez! I'm just going to quit looking at boats in California.

[Rhapsody-NS27]

Originally Posted by jacks88

Wow! I think I'll just call the BOE.

I live in Texas but have found a boat in California I want to buy. I would have thought that I would be exempt from California Use Tax (buying from a private party), but now I'm not sure. I may use the boat for a couple of years for cruising up and down the West Coast and Alaska, and probably as far south as Cabo. If I buy the boat, register it in Texas where I live, then use it all along the West Coast, am I still liable for California Use Tax?

It doesn't matter where YOU are. It matters where the BOAT is.

I bought a boat in Tennessee but because the hailing port was California, I was sent a letter pretty quickly to pay the Use Tax. All I had to do was send / show proof that the purchase, storage and use of the boat was outside of CA and they haven't sent anything else since.

[dhays]

Originally Posted by jacks88

Geez! I'm just going to quit looking at boats in California.

No need to do that. I bought my boat in CA and had it immediately hauled and trucked to WA state. No CA sales tax but I paid the WA use tax when I registered it here.

Dave


Sent from my iPad using Cruisers Sailing Forum

[SV THIRD DAY]

Originally Posted by dhays

No need to do that. I bought my boat in CA and had it immediately hauled and trucked to WA state. No CA sales tax but I paid the WA use tax when I registered it here.

Dave

Yep...and that will be every easy to prove to the CA Assessors office, when they track you down. No need to panic and not buy a boat you want if it is in CA, you just have to understand the rules of the game.