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Old 15-10-2019, 08:49   #1
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Boat U.S. Hailing Port Registration to minimize Tax impact

We are purchasing a boat that will be in the Moorings program for 5 years before we pick it up for some long-haul sailing. My question is there a “best” state / city in the U.S.A. to register it (Hailing port) to minimize tax implications (e.g. Use tax etc). We will USCG registration and the boat itself will be based in French Polynesia.
Thanks for all your help!!
Dan
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Old 15-10-2019, 09:12   #2
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Re: Boat U.S. Hailing Port Registration to minimize Tax impact

Use tax is generally the same as sales tax. The 5 states with no sales tax are Alaska, Delaware, Montana, New Hampshire, and Oregon.

Delaware is popular.
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Old 15-10-2019, 09:32   #3
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Re: Boat U.S. Hailing Port Registration to minimize Tax impact

Thanks for the information! Your info on Delware aligns with a 2016 article I found that listed some of the eastern states sales / property tax info (See below). Also, is there any issues with registering the boat in a state other than the one we live in? Thanks!
Dan
As of 2016 an article had the below tax implications
State
Sales tax on boats?
Personal property tax?
Alabama
2%
No
Connecticut
6%
No (but higher registration fees)
Delaware
No
No
District of Columbia
No
No
Florida
6%
No
Georgia
4% + local
Yes
Maryland
5% (2013 Edit — at least temporarily, MD is capped. Here)
No
Massachusetts
5%
Yes
Maine
5%
Yes
New Hampshire
$10 to $1761.40 depending on size and propulsion with some exemptions
No
New Jersey
3.5% Capped in 2016 at $20,000
Yes
New York
8.25% most counties Capped at $18,975
No
North Carolina
3% with $1,500 cap
Yes
Pennsylvania
6%-7%
No
Rhode Island
No
No
South Carolina
5% with $300 cap
Yes
US Virgin Islands
No
No
Virginia
2% capped at $2,000
Yes
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Old 15-10-2019, 09:44   #4
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Re: Boat U.S. Hailing Port Registration to minimize Tax impact

Moorings has answered this question before. Are you going for guaranteed buyout at end of charter, sell on your own, or continue to own?

US Virgin Islands has no use tax on vessel registration.

Many states do not collect sales tax when you register in that state if sales tax has been paid at the same or higher level. Maryland collects excise tax if you have not paid Maryland sales tax on the vessel.

Cheers, RickG
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Old 15-10-2019, 09:55   #5
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Re: Boat U.S. Hailing Port Registration to minimize Tax impact

Generally if a boat has never been to your state then they can't tax it. Property tax laws are different then use tax btw and there may be a tax liability.
A hailing port is generally described as any place with a zip code. I'm not sure about that as I think it just has to be a place. Here's the rules:https://www.law.cornell.edu/cfr/text/46/67.119

I saw one cruiser with an Old Faithful WY hailing port. Yes, they have a zip code.
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Old 15-10-2019, 09:58   #6
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Re: Boat U.S. Hailing Port Registration to minimize Tax impact

is it a foreign built vessel?

do you intend to operate in USA waters? if so which state?

if you are purchasing outside the US & intend to operate outside the US, you can still USCG document the vessel and not register it in any state... no sales or use tax.
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Old 15-10-2019, 10:03   #7
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Re: Boat U.S. Hailing Port Registration to minimize Tax impact

After the Moorings program we plan to configure it/ update for long haul cruising and continue to own the boat and sale it in French Polynesia / South Pacific for a few years. We don’t anticipate it ever being in in US waters. Potentially 3-4 years after cruising the South Pacific (~ 8 years from now) if might see the US Virgins.
Dan
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Old 15-10-2019, 10:06   #8
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Re: Boat U.S. Hailing Port Registration to minimize Tax impact

The boat is Robertson & Cain manufacture (South Africa) built for the Moorings program. Unlikely to see US waters, at least in next 8 years or so.
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Old 15-10-2019, 11:29   #9
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Re: Boat U.S. Hailing Port Registration to minimize Tax impact

As you note, Rhode Island is a boat friendly place. No sales tax on boat purchases or sales.


If you visit the States with sales tax, and stay about 90 days, they will come and try and collect tax. I have watched the tax collectors photograph boats in slips on the Chesapeake in the spring, and if you are still there in the fall they will come after you. That was Maryland, but I believe Florida and others follow the same process... a use process. You being off shore should not face that problem.



The home port listing for the Coast Guard is not limited to water. It is simply for information and can be any home port you desire, within the USA.



Stephen





Quote:
Originally Posted by Dan2011 View Post
Thanks for the information! Your info on Delware aligns with a 2016 article I found that listed some of the eastern states sales / property tax info (See below). Also, is there any issues with registering the boat in a state other than the one we live in? Thanks!
Dan
As of 2016 an article had the below tax implications
State
Sales tax on boats?
Personal property tax?
Alabama
2%
No
Connecticut
6%
No (but higher registration fees)
Delaware
No
No
District of Columbia
No
No
Florida
6%
No
Georgia
4% + local
Yes
Maryland
5% (2013 Edit — at least temporarily, MD is capped. Here)
No
Massachusetts
5%
Yes
Maine
5%
Yes
New Hampshire
$10 to $1761.40 depending on size and propulsion with some exemptions
No
New Jersey
3.5% Capped in 2016 at $20,000
Yes
New York
8.25% most counties Capped at $18,975
No
North Carolina
3% with $1,500 cap
Yes
Pennsylvania
6%-7%
No
Rhode Island
No
No
South Carolina
5% with $300 cap
Yes
US Virgin Islands
No
No
Virginia
2% capped at $2,000
Yes
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Old 15-10-2019, 11:35   #10
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Re: Boat U.S. Hailing Port Registration to minimize Tax impact

Thanks for the information!
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Old 15-10-2019, 11:51   #11
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Re: Boat U.S. Hailing Port Registration to minimize Tax impact

Quote:
Originally Posted by Dan2011 View Post
We are purchasing a boat that will be in the Moorings program for 5 years before we pick it up for some long-haul sailing. My question is there a “best” state / city in the U.S.A. to register it (Hailing port) to minimize tax implications (e.g. Use tax etc). We will USCG registration and the boat itself will be based in French Polynesia.
Thanks for all your help!!
Dan
I would start with Moorings as it should be to their advantage to have assessed this question for all their members.

With that advice I would go to the state recommended or one of those previously mentioned without sales tax and call them directly for the bottom line on what you have planned. State Revenue offices continue their inventiveness in the gathering of funds. There are interstate agreements on tax/fee assessing and those with mutual waterline borders are easy targets. For example, I looked into avoiding the WA State sales tax by keeping a soon to be purchased boat in Oregon 12 years ago. I found out about the mutual OR-WA agreement on boats moored on the Columbia River on the OR side by WA residents still being taxed by WA. I would have had to keep the boat further down the OR coast to avoid the tax which was not practical in my case. Of course, all these taxing rules can change with the stroke of a pen.

Please share what you learn/decide with the forum.

~ ~ _/) ~ ~ MJH
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Old 15-10-2019, 12:05   #12
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Re: Boat U.S. Hailing Port Registration to minimize Tax impact

You must be very careful about the tax implications. My sister and her husband bought a boat for $90,000 and since he had a Delaware corp in his name they used that to avoid paying sales tax. They kept the boat on their dock in Maryland for 4 years then got a bill from the state for sales tax, interest and penalties totaling $20,000. If they had paid the original sales tax then it would have been $5,400. Be very careful.
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Old 15-10-2019, 12:19   #13
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Re: Boat U.S. Hailing Port Registration to minimize Tax impact

The hailing port has no true tax implication. Registration and physical presence do. Moorings and their attorneys should have the information you need. I just spent time and money with an attorney to decide if I should keep my boat registered offshore (the way it was) or do a US registration. Since I can register it in NC for a pretty reasonable amount, that made way more sense than the cost of closing offshore and registration offshore. The savings would be outdone by the costs.
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Old 15-10-2019, 12:29   #14
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Re: Boat U.S. Hailing Port Registration to minimize Tax impact

I believe Rhode Island requires a local (to State) land based address.
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Old 15-10-2019, 13:05   #15
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Re: Boat U.S. Hailing Port Registration to minimize Tax impact

You are confusing Hailng Port and state registration
They are unrelated. The port is anywhere you like to choose. The state of registration is what counts and where the boat was when you bought it.
E.g.
I bought mine in FL. I had to leave Florida in 30 days to avoid sales tax and not return for a year. We went directly to RI and registered the boat. I live in Vermont and RI was closest salt water. When I returned to Florida a year later I registered the boat in Florida and paid NO tax. Russ
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