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Old 28-12-2016, 10:40   #31
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Re: Cruising Boat and US State Taxes

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Have they ever put a lien on a USCG documented vessel when the only evidence was the USCG document hailing port? Once they do, this opens them up to a lawsuit in Federal court. I doubt they want a Federal judge reviewing their overreaching state law(s).
Do you have any idea how much it costs to litigate in the US District Courts IF you can meet the diversity requirements?
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Old 28-12-2016, 10:56   #32
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Re: Cruising Boat and US State Taxes

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If the only evidence the CA bureaucrats have is the hailing port on a USCG documentation, I doubt they would go as far as liens/seizing assets. It's well understood that USCG documented hailing ports are simply 'vanity', and can/do have no correlation to actual home port. The bureaucrats may send threatening letters and tax bills, but to take the next legal step with liens/seizures opens them up to lawsuits that I don't believe they want.
But the threat of having them do that to you is what it is about, even if they never get as far as a lien. I did comment on this on page one of this thread. It was not a happy experience for that skipper. That is why I went to the tax office and discussed it with them in person. A few weeks after I returned to Canada,m I got a form letter in the mail, from - you guessed it - the very same office. I sent them another nice letter, enclosing the first letter which the office had stamped. So far so good.

If I had the time or patience I'd try to find that earlier thread. I'd bet the OP could do it if he searched on "California tax" and other useful word combinations.

It simply isn't worth the aggravation. And San Jose ain't that nice anyway.
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Old 28-12-2016, 11:03   #33
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Re: Cruising Boat and US State Taxes

Rhode Island, New Hampshire, NC all sound good.
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Old 28-12-2016, 12:12   #34
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Re: Cruising Boat and US State Taxes

Skylark is a USCG documented sailboat. Since coming into my hands, she sailed to The Netherlands. My documentation MAILING address was Beaufort, SC. Her home port IS East Hampton, NY.

Never heard a peep from NY, but SC tried to charge me property tax on a boat that has never been in the state. How SC got wind of my MAILING address from the documentation center is beyond me.

One letter got 'em off my back.

In The Netherlands, there are no boat taxes, only marina fees...and they are quite reasonable compared to other Eurolands.
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Old 28-12-2016, 12:15   #35
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Re: Cruising Boat and US State Taxes

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Originally Posted by crabcake View Post
Do you have any idea how much it costs to litigate in the US District Courts IF you can meet the diversity requirements?
The CA bureaucrats know that and are playing it for all they can!

I'm betting they'll never get as far as a lien/seizure, as CA doesn't want to be dragged into Federal court either.


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But the threat of having them do that to you is what it is about, even if they never get as far as a lien. I did comment on this on page one of this thread. It was not a happy experience for that skipper. That is why I went to the tax office and discussed it with them in person. A few weeks after I returned to Canada,m I got a form letter in the mail, from - you guessed it - the very same office. I sent them another nice letter, enclosing the first letter which the office had stamped. So far so good.

If I had the time or patience I'd try to find that earlier thread. I'd bet the OP could do it if he searched on "California tax" and other useful word combinations.

It simply isn't worth the aggravation. And San Jose ain't that nice anyway.
IMO, that's tyranny and it's wrong! Until someone takes them to court, they'll continue. Municipalities, counties, and states create laws that run amuck to higher law and until someone challenges them, they get away with it.
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Old 28-12-2016, 19:33   #36
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Re: Cruising Boat and US State Taxes

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Thanks for the tips Cheechako, we have not yet closed on the boat, so we can definitely can still use this method.

At the moment, the closing company is asking hailing port and documentation address. We have addresses in California, Texas, and Florida we could use, if needed.
Florida is a good option. There is a cap on sales tax on boats. I believe the cap is $14K. Stay far away from using any California address or hailing port in California. When you USCG register the boat they will notify the municipality of the boat purchase. California will then hunt you down for sales tax and property tax.
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Old 28-12-2016, 20:03   #37
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Re: Cruising Boat and US State Taxes

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Thanks for the tips Cheechako, we have not yet closed on the boat, so we can definitely can still use this method.

At the moment, the closing company is asking hailing port and documentation address. We have addresses in California, Texas, and Florida we could use, if needed.
Florida is a good option. There is a cap on sales tax on boats. I believe the cap is $18K. Stay far away from using any California address or hailing port in California. When you USCG register the boat they will notify the municipality of the boat purchase. California will then hunt you down for sales tax and property tax.
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Old 28-12-2016, 20:04   #38
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Re: Cruising Boat and US State Taxes

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Originally Posted by wgoodbye View Post
Florida is a good option. There is a cap on sales tax on boats. I believe the cap is $14K. Stay far away from using any California address or hailing port in California. When you USCG register the boat they will notify the municipality of the boat purchase. California will then hunt you down for sales tax and property tax.
1) If the boat never enters CA or FL waters, there is no tax due to either state regardless of hailing port.

2) If you use a FL mailing address and bring the boat to FL in the future (within 5 years), you will owe use tax. If you use a TX mailing address and bring the boat to FL more than 6 months after purchase, no use tax is owed. FWIW, the sales tax cap in FL is $18k.

USCG notifying a muni of hailing port does not mean you owe that muni tax. This includes the state of CA. If the boat is never in CA waters nor did the sales transaction take place in CA, there is no tax due.
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Old 28-12-2016, 20:29   #39
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Re: Cruising Boat and US State Taxes

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Thanks for all the feedback so far!

Here is what I am thinking, based on the feedback I have received.
  • USCG document(no state registration) @ Florida mail forwarding service
  • Hailing port @ Florida mail forwarding service
  • Drivers license, vehicle & voter registration @ family member's house in Florida
  • Don't stay in Texas or or stop in Florida for more than 90 days

Anything else I might be missing?
You can give the CA tax man all the paperwork you want but it won't make any difference. What matters is where the boat lives. Some years back the rule was 181 days or more per year in CA and the boat is taxable. I don't know whether that number is still the cutoff.

The hailing port is irrelevant.
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Old 28-12-2016, 21:56   #40
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Re: Cruising Boat and US State Taxes

The post above isn't quite right. I was answering something else and the editing time expired. My fault.

anyway

If you are a Florida resident the period of tax free grace is 30 days for the boat to be in the state not 90. 90 is only for non residents.
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Old 28-12-2016, 22:13   #41
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Re: Cruising Boat and US State Taxes

As an outsider all I can say is your tax people could teach the EU a few tricks and that is saying something. Thank god for brexit
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Old 28-12-2016, 22:30   #42
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Re: Cruising Boat and US State Taxes

Many states in the US are heavily overtaxed. People look at the low federal income tax and think that is where it ends but that is only the beginning.
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Old 29-12-2016, 08:44   #43
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Re: Cruising Boat and US State Taxes

My daddy once told me to never even think of stealing small. It still is good advice. To me 6-8% on the price of a boat has to be small. If it's not you probably cannot afford the boat. You can obtain CG documentation and simply remove the state registration(I've never heard of unregistering a boat and DMV folks are not eager to learn something new). However, if living in California at the time of purchase and the boat stays in Texas you probably owe Texas sales tax. A boat in any state with no registration numbers is likely to be stopped and the second thing they will want is photo ID which generally has a home address. An alert or bored cop might also ask for your sales tax receipt.
The bottom line is that the odds on your being caught are not great but if charged your defenses will be pathetic. The costs in both money and aggravation are likely to be high.
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Old 29-12-2016, 08:51   #44
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Re: Cruising Boat and US State Taxes

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My daddy once told me to never even think of stealing small. It still is good advice. To me 6-8% on the price of a boat has to be small. If it's not you probably cannot afford the boat. You can obtain CG documentation and simply remove the state registration(I've never heard of unregistering a boat and DMV folks are not eager to learn something new). However, if living in California at the time of purchase and the boat stays in Texas you probably owe Texas sales tax. A boat in any state with no registration numbers is likely to be stopped and the second thing they will want is photo ID which generally has a home address. An alert or bored cop might also ask for your sales tax receipt.
The bottom line is that the odds on your being caught are not great but if charged your defenses will be pathetic. The costs in both money and aggravation are likely to be high.
I'm not stealing anything. I'm using the various state and federal laws to my advantage.
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Old 29-12-2016, 08:57   #45
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Re: Cruising Boat and US State Taxes

Before you get that Florida driver's license with a fraudulent address you might want to check out if you are committing any crimes. I suspect a false statement on the DL application might be one. I doubt if you care but FL also requires you update your address within 90 days of a move. A credit bureau report or a call to the local PD might result in serious consequences if anybody bothers to look.
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