Confusion About 'Use Tax' and 'Sales Tax'

[Sailor Nina]

We are purchasing a boat in New York and it will be our primary residence, so we will be liveaboards and plan on cruising in US waters the first year. We are Oklahoma residents at the present time. We are trying to figure out how to legally minimize our sales or use tax. I was unable to locate specific information on the State of New York's website, anyone know of better links? Another question, can your boat be your legal residence if it's moving all the time or does a US citizen have to have a physical address?

[FSMike]

When my ex bought her cat, there were several questions - bought in Massachusetts, boat was going to Florida, owned by a USVI resident, etc. She went to a Florida tax accountant, who gave her the simplest and cheapest way to deal with the situation down to the street address she needed to go to.

Of course he didn't answer questions on the internet, he was just a tax professional earning his living by KNOWING what the answers were.

Not to downgrade the knowledgeable contributors to this forum, but advice is frequently worth what you pay for it.

Food for thought.

[evm1024]

Just a note.

The USCG Documentation database is available to all 50 states tax collectors. Some states cross check the Home port of documented boats against the tax rolls. Thus if you have a home port in a tax state and have not paid tax expect a letter in the mail.

[denverd0n]

Your boat can be your legal residence. In fact, you don't really have to have a "legal residence." Having a permanent residence somewhere, however, can make a lot of things a great deal easier.

[GordMay]

Greetings and welcome aboard the CF, Sailor Nina.

[travler37]

Originally Posted by thelasthour

I'm purchasing a used sailboat in Connecticut, I live in Florida, I want to keep the boat in Maryland for 2years. The boat is a Documented vessel, what tax do I pay and to whom. Connecticut sales tax, Fl sales Tax, or Maryland "use tax". If I pay sales tax at the time of transaction, do I pay another tax in Maryland after 90 days? Please explain how this works, because it may change my plans of storing it in Maryland.
Steve

Am going through this,
Differet states but the same thing.
IF A POSTER DOES NOT BACK UP HIS OPINION WITH A QUOtE FROM THE TAX LAWS THE BEWARE,,,,,,,,,,,,,,,,,,,
Make a phone call and RECORD IT.To all the states involvled.They can come back on you in the future and even if the OFFFICIAL you talked to told you wrong you are still liable for the tax and penalties,,,,,,,,,,,,,,,,,,
vote with your feet and leave
Mark

[Seahunter]

Originally Posted by evm1024

Just a note.

The USCG Documentation database is available to all 50 states tax collectors. Some states cross check the Home port of documented boats against the tax rolls. Thus if you have a home port in a tax state and have not paid tax expect a letter in the mail.

That doesn't work as your boat can be documented in any city, state, within the USA. It doesn't mean your boat is residing at the documented home port location.

[evm1024]

Originally Posted by Seahunter

That doesn't work as your boat can be documented in any city, state, within the USA. It doesn't mean your boat is residing at the documented home port location.

Don't be confused.... This is not about where your boat is but rather which state can claim that your boat is liable to taxation.

If you for example Document your boat with a home port in Florida and have the Documentation paperwork sent to an address in California you can expect to see a tax bill from California and perhaps Florida as well.

The point is that the Coast Guard Documentation database is available to State Governments and that some states are looking at the Documentation data and sending tax bills.

Regards

[avb3]

Originally Posted by evm1024

.....

The point is that the Coast Guard Documentation database is available to State Governments and that some states are looking at the Documentation data and sending tax bills.

Regards

It's actually available to anyone

Office of Science and Technology

Good place to check if you are buying a boat.

[markpierce]

Originally Posted by Seahunter

That doesn't work as your boat can be documented in any city, state, within the USA. It doesn't mean your boat is residing at the documented home port location.

Based on my experience in California, the state will assume, unless otherwise proven wrong, that your documented boat is in California if you reside there or show it as your home port.

[markpierce]

Originally Posted by avb3

It's actually available to anyone

Office of Science and Technology

That's what I believe is the principal disadvantage of documenting one's boat.

[svBeBe]

Originally Posted by evm1024

Just a note.

The USCG Documentation database is available to all 50 states tax collectors. Some states cross check the Home port of documented boats against the tax rolls. Thus if you have a home port in a tax state and have not paid tax expect a letter in the mail.

For Americans: If you plan to cruise just about anywhere except the USA, it is advisable to document your boat rather than simply register in your respective State. We have visited some countries that would not recognize State registration and required USCG Documentation. Easy and cheap and no reason not to document.

That said, we purchased a boat in the BVI and had it USCG documented with a hailing port of our hometown Houston, Texas. After 4 years of ownership we received a letter from the Texas Comptroller's office trying to collect Sales & Use Tax on the boat purchase. We provided marina and maintenance receipts proving that the boat had never been in Texas waters (in fact had never even been in US waters), and soon received another letter from the Comptroller's office stating that we owed no taxes.

Just because your boat is documented with a hailing port in a particular state does not mean you owe Sales or Use Tax to that state. If the boat is both purchased and berthed/maintained out-of-state or out-of-country, then you do not owe tax to the state of hailing port.

Judy

[evm1024]

Originally Posted by avb3

It's actually available to anyone

Office of Science and Technology

Good place to check if you are buying a boat.

That is the NOAA database which is excerpted from the USCG databases.

To start your search of USCG databases that are not available to the public Take a look here:

USCG CGMIX Port State Information Exchange Home Page

ZThe public can do some wildcard searches on the PSIX search page but law enforcement has a much greater search capability along with reports.

http://cgmix.uscg.mil/PSIX/PSIXSearch.aspx

[evm1024]

Originally Posted by svBeBe

For Americans: If you plan to cruise just about anywhere except the USA, it is advisable to document your boat rather than simply register in your respective State. We have visited some countries that would not recognize State registration and required USCG Documentation. Easy and cheap and no reason not to document.

That said, we purchased a boat in the BVI and had it USCG documented with a hailing port of our hometown Houston, Texas. After 4 years of ownership we received a letter from the Texas Comptroller's office trying to collect Sales & Use Tax on the boat purchase. We provided marina and maintenance receipts proving that the boat had never been in Texas waters (in fact had never even been in US waters), and soon received another letter from the Comptroller's office stating that we owed no taxes.

Just because your boat is documented with a hailing port in a particular state does not mean you owe Sales or Use Tax to that state. If the boat is both purchased and berthed/maintained out-of-state or out-of-country, then you do not owe tax to the state of hailing port.

Judy

Yes true. Never stated otherwise. They did try to collect taxes and you were able to show that you had never been to TX with the boat.

Just how did TX get info on your out of country boat? And if you had ever visited TX with the boat even for a few hours.....

My point is that the CG documentation center data is accessable to State Tax people and that the tax people do check the Documentation databases. The bigger point is do not try to evade taxes.

Regarrrtds

[Sailor Nina]

Originally Posted by GordMay

Greetings and welcome aboard the CF, Sailor Nina.

Gord May, Thanks for the welcome. We are still in the process of getting our boat but it is getting very close. Thanks to everyone for the insight and we will make sure to get qualified advise.

Nina