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Old 16-09-2015, 16:19   #46
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Re: Avoiding California tax (legally)

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Originally Posted by Lepke View Post
Look in BC. The Canadian US exchange rate is about $75 US = $100 Canadian.
Thanks, I'll keep that in mind.

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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.
I have experience fixing up old junk, and I know there's more to it than just making the purchase and spending a few bucks on parts. Don't worry, I won't get in over my head.
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Old 17-09-2015, 13:56   #47
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Re: Avoiding California tax (legally)

If you plan to travel to buy and work on a boat, you might consider Mexico. Lots of boats for sale there, and there are knowledgeable brokers to help you through the paperwork. Yes, most of the boats are US documented, and you won't get hung up with Mexican paperwork too badly. We know many US owners who successfully purchased boats in Mexico. Take a look at: Sailboat Listings | La Paz Yachts

While some equipment, supplies and materials are a pain to get in Mexico, the skill, knowledge and lower costs of local help and expertise can more than make up for it, as well as help amortize travel expenses.

Marina costs are on par with those in Southern California, considering that Mexican marinas are all "live aboard" so don't have the additional fees that US marinas do.

You will still need to rigorously document the off-shore purchase and expenses to avoid sales/use taxes no matter where you eventually move back to the US. Of course, what you must do to avoid/minimize taxes will depend on where you move to.
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Old 31-10-2015, 09:03   #48
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Re: Avoiding California tax (legally)

If your buying a fixer the value is low and the reg. isn't too bad. If your buying a $100000 boat well then I'd look someplace else. otherwise you'll spend more money on traveling to cross boarders and such. If you find the "right" boat just suck it up and pay whats due like all us other Cali locals.
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Old 31-10-2015, 09:23   #49
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Re: Avoiding California tax (legally)

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Geez! I'm just going to quit looking at boats in California.
Good Plan! Phil
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Old 31-10-2015, 11:00   #50
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Re: Avoiding California tax (legally)

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If you find the "right" boat just suck it up and pay whats due like all us other Cali locals.
If he buys the boat in California (taking an offshore delivery) and then the boat leaves the State within 90 days and then he stays out for 365 additional days...then nothing is due. What's wrong with following the law...I don't pay a dime of tax I'm not obligated to pay...so forget about sucking it up when you don't owe it.
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Old 31-10-2015, 11:54   #51
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Re: Avoiding California tax (legally)

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Originally Posted by SV THIRD DAY View Post
If he buys the boat in California (taking an offshore delivery) and then the boat leaves the State within 90 days and then he stays out for 365 additional days...then nothing is due. What's wrong with following the law...I don't pay a dime of tax I'm not obligated to pay...so forget about sucking it up when you don't owe it.
Thats my boy!



I pay what Im required to and never volunteer to pay more. If the State gives me an option, I will find a way to accommodate their offer.
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Old 31-10-2015, 12:38   #52
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Re: Avoiding California tax (legally)

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Many other threads on this. If your intention is operate and locate the boat (in most states that collect tax) for a given period of time (120 days CA, 90 FL, etc.) then you are liable for the taxes. It does not matter what the hailing port is, where you live, or if you pop out of the state for a few days (the later probably counts as tax evasion). If your intentions are clear, you are liable for the tax. Can/will they catch up with you? Who knows? It does not make it any less illegal.

I am not sure I understand the international water argument. Buy the boat in California, and move it as quickly as possible to an untaxed state, if that is where you are going to operate out of. Buying boats in one state state, moving it to its "home", completing any state registration, tax obligations, etc. happens every day.

It is amazing to me that no one in a state that collects taxes thinks twice about paying sales tax on their cars, flat screen tvs, washing machines, etc. but will jump through just about any kind loop hole they can find with a boat.


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I'm not sure where you got that idea from.

I knew a few families that lived in Crescent City, CA. They would pop over to OR to buy cars, TVs, anything over a few hundred $.

I also knew 2 families who lived in Tewksbury, MA. They would drive over to NH just to buy a carton of cigarettes, a bag of groceries, or anything more expensive. In their case, it was only a couple of blocks to the grocery store, so it was no problem.

I also know of 2 developers who took delivery of their mega yachts in Mexico. One of them bragged that the taxes he saved doing that paid for his McMansion right on the beach in San Carlos.

Tax avoidance is very common, from what I've seen.
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Old 31-10-2015, 12:42   #53
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Re: Avoiding California tax (legally)

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Tax avoidance is very common, from what I've seen.
And is not illegal (given your examples).
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Old 31-10-2015, 12:43   #54
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Re: Avoiding California tax (legally)

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And is not illegal (given your examples).
Tax avoidance is legal
Tax evasion is not.

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Old 31-10-2015, 16:15   #55
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Re: Avoiding California tax (legally)

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Originally Posted by SV THIRD DAY View Post
If he buys the boat in California (taking an offshore delivery) and then the boat leaves the State within 90 days and then he stays out for 365 additional days...then nothing is due.
I'm pretty sure that your legal advice is WRONG!

Here is a quote from the California Board of Equalization (tax regulation enforcement agency):

Sales and Use Tax Annotations:

As long as the vessel is delivered outside of California, is first functionally used outside of California, and is functionally used in excess of 90 days outside of California, prior to any entry into California [see note below], the Buyer's subsequent California use, if any, will not be subject to California's use tax. If the vessel is delivered outside of California and enters California waters within 90 days after purchase, the Buyer will be subject to use tax unless the vessel is used or stored outside of California one-half or more of the time during the six months after the vessel entered California waters. 7/9/97. (Am. 2006–1; Am. 2008–1).

you can read all the regulations but what I quoted seems pretty clear

Sales and Use Tax Annotations - 585.8000
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Old 31-10-2015, 16:42   #56
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Re: Avoiding California tax (legally)

NO

Circa 2009 CA passed a law making the waiting period one year. Period.
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Old 31-10-2015, 16:47   #57
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Re: Avoiding California tax (legally)

Nope....

Done it myself 3 times now.

As long as you have an offshore delivery, it CAN come back to California and as long as it then LEAVES within the time period (for repairs) then if you are out for 365 days then you are done...you owe no tax on the purchase. You will owe tax if/when you come back and get back on the tax roles...but that's a different tax..not a sales type.

Used a maritime attorney each time, easy as pie if you follow the rules.
But each and every time the State of CA did try to get some blood out of me...and I proved them wrong, presented the receipts for life in Mexico and avoided the tax.

But advice you get on the internet about legal issues is worth what you pay for it...which is why I said from page one of this post, don't trust or believe ANYTHING you hear in this thread because it can/will cost you money if you make a mistake and don't dot the I's and cross your Ts. Hire a maritime attorney/documentation company like Barbara Jenkins in San Diego, and don't sweat it.
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Old 31-10-2015, 16:56   #58
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Re: Avoiding California tax (legally)

Rich

Yes, an exception to the 365 day rule exists for REPAIRS. Otherwise, the old 90-day yacht club is long gone in Ca.
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Old 31-10-2015, 17:11   #59
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Re: Avoiding California tax (legally)

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Rich

Yes, an exception to the 365 day rule exists for REPAIRS. Otherwise, the old 90-day yacht club is long gone in Ca.
yep....I think 90day repair time threw people to think it was 90-days in Ensenada, the old 90-day Yacht Club is long gone.

You will also need to DOCUMENT the repairs and show that the boat was NOT used for pleasure during the repair period...but ONLY for repairs. Again...lots of little kick you ass details, which is why an expert who does this for a living is a good thing!
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Old 31-10-2015, 17:45   #60
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Re: Avoiding California tax (legally)

The other issue with repairs, as pointed out by my maritime attorney, is that the detailed interpretation of the regulation requires that the person doing the repairs is licensed by a state or local government and pays business tax to that licensing agency.

That rule is seldom enforced, BUT if the California BoE wants to get it's tax from you they can invoke the technical/legalistic interpretation and make you provide documents from said LICENSED mechanics and business owners.

We were trying to buy a big catamaran and wanted to use the repair rule to keep it in California and avoid use tax until ready to head south. We planned to liveaboard during the repair process but our attorney said that BoE has previously ruled that living aboard is "personal use" and makes the use (sales) tax immediately due.

It is a very complicated subject with all kinds of strange "gotchas" California has many years experience making sure they get the tax money they feel is due them. I paid a fair amount of money to a marine attorney to learn that avoidance of sales tax was a touchy subject with all kinds of ways to make the tax due NOW!
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