Buying a St. Martin Flagged Vessel as a US Resident.

[joshrosenthal1]

Hey Island Time O25,

I live in CA. would bring it back stateside to CA (beat upwind from costa rica - what a trip!)... not sure how soon after purchase, but fairly soon.

I am a permanent resident of USA and an Australian Citizen. Not sure if there are other tax exempt ways around using that info?

[jtsailjt]

Originally Posted by Island Time O25

jtsailjt, I think we're talking about somewhat different situations. My understanding of MA sales tax rules is that they don't care where you use or store it. If you register the boat in MA you pay the sales tax or if you keep the boat in MA, regardless if you're a MA resident or not.

If a MA resident buys and documents a boat and keeps her entirely out of MA that does not kick in the sales tax UNLESS he brings her to MA for over X days per calendar year. Not just X consecutive but X total I believe.

From a non resident passing through but for longer than X days per year total, the MA DOR will probably want a piece of that sales tax but it will be offset by sales tax paid in another state. Basically the law says "if you're in the state longer than X days per year that is the evidence that you are not 'just passing through' and thus must register and pay the tax".
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On your first point about registering the boat in MA then you have to pay the use tax. Of course you do, IF you keep or register it there right after you buy it.

But if you have already owned the boat for an arbitrary period of time, which is decided upon and published by each state, then you do not have to pay the sales or use tax in order to bring the boat into that states waters whether or not once upon a time you paid sales or use tax elsewhere. It's up to you to read up on exactly what the law in any state where you intend to keep your boat actually says and not rely on what you think "DOR will probably want." That's one way people get in trouble, by "thinking" about what the state will probably want or what seems reasonable rather than simply reading what the law says and making sure they comply. Sometimes it seems reasonable and sometimes it seems silly, but the law is the law and THAT is what you have to comply with.

[Island Time O25]

Originally Posted by jtsailjt

On your first point about registering the boat in MA then you have to pay the use tax. Of course you do, IF you keep or register it there right after you buy it.

But if you have already owned the boat for an arbitrary period of time, which is decided upon and published by each state, then you do not have to pay the sales or use tax in order to bring the boat into that states waters whether or not once upon a time you paid sales or use tax elsewhere. It's up to you to read up on exactly what the law in any state where you intend to keep your boat actually says and not rely on what you think "DOR will probably want." That's one way people get in trouble, by "thinking" about what the state will probably want or what seems reasonable rather than simply reading what the law says and making sure they comply. Sometimes it seems reasonable and sometimes it seems silly, but the law is the law and THAT is what you have to comply with.

No argument there. I was describing a situation where people want/need to register right after the purchase, not after they owned it and it was registered somewhere else for a while. Same as with the cars btw.

And here is an actual situation which took place 10 years ago. A boat was purchased in MA and taken right away to NH for some work on the hard. Not registered in MA or NH. Over 1 year later when registering in MA the tax had to be paid as of the date of that purchase in MA plus interest. It wasn't much as the boat was a project bought for a few hundred dollars. If it was registered in NH right away the tax would not be due in MA as a requisite amount of time has passed. But because it was NOT registered anywhere else since the date of the purchase the tax was due.

Registering in NH just to save on MA sales tax did not make sense in that particular case as the registration fees in no sales tax NH were substantially higher than the sales tax and registration fees due in MA. But for a boat which sold for a substantial amount the reverse would be true.

Also some mix up sales tax and excise tax (equivalent to property tax for houses and what you called a "use tax") which are two different animals. Some states which have no sales tax have steep property (and excise) tax rates, NH is one of them. While admittedly the excise tax is not great in most local jurisdictions it may be steep in others and will add up over the years making sales tax savings less prominent.

[Gareth Hughes]

I'm shooting from the hip here; but since French St Martin is a part of France, and not just some construct as Dutch Sint Maarten is. I guess boats registered there will be VAT paid. You may well be able to recoup some money when you export it.

[jtsailjt]

Originally Posted by Island Time O25

No argument there. I was describing a situation where people want/need to register right after the purchase, not after they owned it and it was registered somewhere else for a while. Same as with the cars btw.

The boat in question is in St Maarten so obviously not in MA and I can't think of a reason why he'd want to either take it to MA or register in in MA within the first 6 months of ownership because that would make him liable for MA use tax. With all the nice places to visit that won't require him to pay any sales or use tax between MA and St. Maarten, why would anyone immediately transport their new to them boat from a sunny, windy, great sailing area to a place where they'd be promptly served with a large tax bill to pay and a winter storage bill to boot?

My original post here was simply to point out that if you carefully read each states laws regarding sales/use taxes, if you buy your boat outside the state where you are a resident (which was the OP's situation), you won't necessarily have to pay any use or sales tax, while complying with all laws. I'm not advocating that anyone cheat or even mislead the government of any state, but rather they should read the laws (I did all my research online), then call that states tax bureau and verify that their understanding of the law is exactly correct, and then comply with that law in a way that exposes them to the least amount of tax if the hoops required to jump through in order to comply aren't a bigger inconvenience to you than just paying the tax would be.

[jtsailjt]

Originally Posted by Island Time O25

And here is an actual situation which took place 10 years ago. A boat was purchased in MA and taken right away to NH for some work on the hard. Not registered in MA or NH. Over 1 year later when registering in MA the tax had to be paid as of the date of that purchase in MA plus interest. It wasn't much as the boat was a project bought for a few hundred dollars. If it was registered in NH right away the tax would not be due in MA as a requisite amount of time has passed. But because it was NOT registered anywhere else since the date of the purchase the tax was due.

Registering in NH just to save on MA sales tax did not make sense in that particular case as the registration fees in no sales tax NH were substantially higher than the sales tax and registration fees due in MA. But for a boat which sold for a substantial amount the reverse would be true.

Also some mix up sales tax and excise tax (equivalent to property tax for houses and what you called a "use tax") which are two different animals. Some states which have no sales tax have steep property (and excise) tax rates, NH is one of them. While admittedly the excise tax is not great in most local jurisdictions it may be steep in others and will add up over the years making sales tax savings less prominent.

In the actual situation you cite above, did you leave out the critically important detail that the owner was a MA resident? That's important because the laws often differ, depending on the residency of the owner.

As for "what I called the use tax," that term isn't something I made up on my own. It's a specific tax term that states use to describe a tax which is designed to replace the sales tax on items bought out of state but brought into their state and "used" there. In most states it is levied at an identical rate as the sales tax. The excise tax is a different animal entirely.