Buying a Boat- Is There any Tax Advan. Outside US

[JK7]

Does anyone have any experience of buying a boat, in the US,, or is it better to take possession outside US. to save taxes. We plan on keeping it off shore in the carribean anyway? Any help?

[zeehag]

buy it offshore, keep it offshore for a yr, and no sales tax, spozedly.

[skipmac]

Depends. Need more detail.

1. Are you a US citizen?

2. If yes, will you USCG document the boat or register outside the US?

3. Also, if US citizen resident of what state? Will that be the mailing address for the documentation.

Bottom line, some states will require sales tax on any boat, some have a max cap, some charge none. Many states like FL will make you pay sales tax even if you are not a FL resident but buy the boat in FL and don't remove it by a certain deadline. Also a few states will make you pay annual property tax on the boat. Some states, if you are a resident there, will want you to pay sales tax on the boat even if it never enters the US.

So, like I said, it depends.

[CarinaPDX]

You might search for other existing threads - boat taxes have been pretty thoroughly thrashed out.

As long as you document the boat with the USCG and don't leave it in the states you should be able to avoid taxes, provided that the registration address/your residency is not in one of those states that insists on picking the pockets of 'rich' yachties. It is easy enough to register it in Delaware - there are services that will set it up for you. There are other states that fit the bill as well. I am assuming that you are a US citizen; in that case it will likely be even more important to establish residency in a state without a state income tax, or one that exempts its residents from income tax if they don't actually live in the state (transients or foreign-domiciled).

It is also possible to buy a boat in a state with sales tax and not pay it, as long as the boat is out within the state's grace period and you are a non-resident. So I don't see that where you buy the boat is a big issue assuming the boat can be moved out quickly.

FWIW if you were an EU resident and the boat was VAT-paid then ownership needs to be transfered inside the EU to preserve the VAT-paid status. Tax laws are pretty strange beasts...

Greg

[David M]

There can be tax advantages with it as a second home. Check with your tax advisor.