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-   -   Sales Tax - Purchase Between Two Individuals ? (http://www.cruisersforum.com/forums/f128/sales-tax-purchase-between-two-individuals-71923.html)

andreas.mehlin 20-11-2011 02:38

Sales Tax - Purchase Between Two Individuals ?
 
If buying a boat in US from an individual and register it in Delaware, is there any sales tax I have to pay/or the vendor?

Regards
Andreas

captainKJ 20-11-2011 02:49

Re: Sales tax - Purchase between two individuals?
 
i id the same thing many years ago, no sales tax, If i remember you must put on the registration that the boat will be sailed in delaware

djmarchand 20-11-2011 05:08

Re: Sales tax - Purchase between two individuals?
 
Delaware has no sales tax, period. But beware of use tax. If you use your boat for more than x months in a given state, then you may be liable for that state's use tax.

Sales and use tax are simlar. Sales tax is based on where the sales transaction takes place. Use tax is based on where the boat is used. They are always the same rate.

David

bella 20-11-2011 06:01

Re: Sales tax - Purchase between two individuals?
 
Quote:

Originally Posted by djmarchand (Post 821951)
Delaware has no sales tax, period. But beware of use tax. If you use your boat for more than x months in a given state, then you may be liable for that state's use tax.

Sales and use tax are simlar. Sales tax is based on where the sales transaction takes place. Use tax is based on where the boat is used. They are always the same rate.

David

David, as a general rule of thumb...those same states tend to go by the address of the boat.. most of the revenue notices are computer generated and by address. however, a caveat to that would be IF you were in a marina for the time period and someone deliberately walked the docks and checked out of state registered boats.
I lived in Baltimore and we had this done.. in my case I was too lazy to change the hailing port on the stern. On my doc papers it did indeed say Florida. Our resident dock walker assumed that the state was aware of me.. I never disabused her of that notion.. :whistling: SC and Virginia are two notable states for this kind of tax..

andreas.mehlin 20-11-2011 06:15

Re: Sales tax - Purchase between two individuals?
 
Hmm...

I have to say that US taxes are something new to me.
So, there are sales taxes between to individuals if selling something? When are you obligated to pay sales tax? Definition?

If selling a boat to a foreign person who register a boat in his own country. Is the vendor still obligated to pay sales tax?

Like I said...US taxes are something new for me and I now zero about it.

Andreas

Vasco 20-11-2011 06:23

Re: Sales tax - Purchase between two individuals?
 
Quote:

Originally Posted by andreas.mehlin (Post 821988)
Hmm...

I have to say that US taxes are something new to me.
So, there are sales taxes between to individuals if selling something? When are you obligated to pay sales tax? Definition?

As for tax in a sales transaction between two individuals, usually no tax is paid unless what is being sold has to be registered, such as a boat, a car, a trailer etc. The tax police get you when you register the boat, vehicle etc. If you sell your old fridge to a neighbour there's no tax, if you buy an old fridge from a second hand store there's sales tax. (except in the few jurisdictions that still do not have a sales tax).

svBeBe 20-11-2011 06:25

Re: Sales tax - Purchase between two individuals?
 
Sales Tax is a State Tax. There are 50 states and no two state's laws are identical. You need to get specific advice about your transaction from a knowledgeable party. There are agents who specialize if yacht registration located in most states...these are not yacht brokers or sales agents.

Do a Google search for "Delaware Boat Registration." You will find a number of businesses specializing in registering yachts.

Bill

sailcruiser 20-11-2011 06:42

Quote:

Originally Posted by andreas.mehlin
Hmm...

I have to say that US taxes are something new to me.
So, there are sales taxes between to individuals if selling something? When are you obligated to pay sales tax? Definition?

If selling a boat to a foreign person who register a boat in his own country. Is the vendor still obligated to pay sales tax?

Like I said...US taxes are something new for me and I now zero about it.

Andreas

Yes there are taxes to be paid between the individuals who exchange an item(s) for currency. You are obligated to pay tax on anything the state has defined as taxable. In most states that is just about anything from food to cars. Some states tax services too. I'm not sure I can properly define it so I won't try not being schooled in that field other than a class or two a long time ago. An example would be I buy a $50,000 boat in Florida. I would then owe my state of residence (assuming not Florida) somewhere in the 6-9% range of he purchase price in sales tax. This rate may fluctuates by state and by county and possibly city. It's very confusing. Florida doesn't have income tax but might have a tax for this purpose. I don't know.

It isn't the seller that pays sales tax but the buyer. Generally private citizens are not obligated to collect taxes. The seller usually pays income tax on the sale each to their state of residence. Basically you need a map to figure out all the taxes. It's ridiculous in my opinion. So if you are a resident of New York and sell your boat to someone in Mexico I believe the only taxes would be on the income side of the seller and the buyer would likely pay to import to their country. Most taxes are collected at the time the boat's ownership changes at the title office.

Maybe someone with a background in tax law or accounting can do better but this is how I understand things. It can be very complicated but the bottom line is your resident state wants money and they will get it somehow. If not through sales tax then use tax.

SC

bella 20-11-2011 06:52

Re: Sales tax - Purchase between two individuals?
 
Quote:

Originally Posted by andreas.mehlin (Post 821988)
Hmm...

I have to say that US taxes are something new to me.
So, there are sales taxes between to individuals if selling something? When are you obligated to pay sales tax? Definition?

If selling a boat to a foreign person who register a boat in his own country. Is the vendor still obligated to pay sales tax?

Like I said...US taxes are something new for me and I now zero about it.

Andreas

Andreas IF I sell you my personal property and you are not required to register it with any particular entity.. no there is no sales tax per se..

however IF you buy, say a boat from me here in fla... I don't collect the sales tax the state of florida does when you register it here. IF you take the boat out of the state within the state specified time period..no there is no tax.. In other words IF you bought a boat here in Fla and you took it back to the EU there would be no sales tax, however you will pay a VAT tax for bringing the boat there.. or into any country. The tax man will get you someplace..
OTOH.. IF you move a boat from say Maryland to Florida less than 6 mos after you purchased it and registered it in Maryland AND paid the state sales tax.. all you do is prove you paid that tax once when reregistering the boat.. OR that you have owned the boat for longer than 6 mos.
That clear it all up... 'bella

Hud3 20-11-2011 06:52

Re: Sales tax - Purchase between two individuals?
 
You guys are making this way too complicated.

He said he's buying the boat in Delaware. There's no sales tax in Delaware and there's no personal property tax on boats. All he'll have to pay is the boat registration fee. The most he would have to pay to register the boat is $60/year, and that's for a boat longer than 65'.

Vasco 20-11-2011 06:59

Re: Sales tax - Purchase between two individuals?
 
Quote:

Originally Posted by Hud3 (Post 822014)
You guys are making this way too complicated.

He said he's buying the boat in Delaware..

Not so quick, he says he's going to register the boat in Delaware not buying the boat there. If he doesn't move it out of the State he's buying it in a short period he'll get taxed in that State.

svpattyd 20-11-2011 06:59

Re: Sales tax - Purchase between two individuals?
 
I bought my boat in Maryland and I proudly paid Maryland tax. We use the boat in Maryland. We like to use navigational markers. We want clean water programs. We felt that since we are going to use the Maryland waters, we should help pay for the water we treasure. JMHO

Hud3 20-11-2011 07:05

Re: Sales tax - Purchase between two individuals?
 
Quote:

Originally Posted by Vasco (Post 822017)
Not so quick, he says he's going to register the boat in Delaware not buying the boat there. If he doesn't move it out of the State he's buying it in a short period he'll get taxed in that State.

It doesn't matter where he buys it. All he has to do is fill out a form stating that he's moving the boat to Delaware within the time limit allowed by the state in which he buys the boat--typically 30 days. He may have to follow up with proof that he did move it, such as a copy of his brand new, shiny Delaware registration certificate.

Edit: the above won't work in California!

Kettlewell 20-11-2011 07:14

Re: Sales tax - Purchase between two individuals?
 
Quote:

It doesn't matter where he buys it. All he has to do is fill out a form stating that he's moving the boat to Delaware within the time limit allowed by the state in which he buys the boat--typically 30 days. He may have to follow up with proof that he did move it, such as a copy of his brand new, shiny Delaware registration certificate.
__________________
That isn't always true--remember 50 states, 50 different sets of rules, and 50 different Catch 22 situations. For example, if you are a NY resident and you buy a boat in NY or bring the boat into the state for any length of time the tax is instantly due, even if you intend to register in Delaware.

It sounds like the OP is not a US citizen, so therefore I'm pretty sure he will be able to avoid the sales tax as long as he doesn't stay anywhere too long and has a legal registration somewhere. But, if he then keeps the boat in say Florida for 90 days within the first year the tax will be due. Too many different situations to be specific--the OP needs to tell us more details.

Vasco 20-11-2011 07:17

Re: Sales tax - Purchase between two individuals?
 
Quote:

Originally Posted by Hud3 (Post 822024)
It doesn't matter where he buys it. All he has to do is fill out a form stating that he's moving the boat to Delaware within the time limit allowed by the state in which he buys the boat--typically 30 days. He may have to follow up with proof that he did move it, such as a copy of his brand new, shiny Delaware registration certificate.

That's my point, you cannot keep it in the state you buy it without paying sales tax. The fact that it may be registered in Delaware makes no difference. Proof of registration in Delaware does not mean the boat has been moved out of the state it was bought.


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