Cruising Boat and US State Taxes

[belizesailor]

Originally Posted by Jason Flare

I'm not stealing anything. I'm using the various state and federal laws to my advantage.

Absoultely, no reason to let the Govt steal more.

[Island Time O25]

I don't believe it is the USCG who notifies the state tax offices but the state offices upon their initiative peruse the CG lists for any state based hailing ports.

Some states do not require a documented boat to be registered with the state (which was the original scheme and reason for most documentations i.e. to by-pass the multi state mish-mash of rules and regs) just to pay applicable taxes if the boat is kept in the state (under whatever time frame that state's law says is applicable).

Those states which pursue taxes SOLELY on the nexus of the hailing port with no other connection of the boat to that state are most likely in violation of their own rules and laws concerning such nexus. But of course fighting this tax grab from the perspective of the hapless boat owner who is thousands of miles away and has little time or resources is not easy but still necessary. I would also follow up with a letter to one's congressman to point out this issue and how such tax grabs are upsetting the Federal documentation scheme which designed in the first place precisely to avoid such state grabs.

I understand the fact that the state, any state, would want to collect all taxes duly vested and due to it but not from the boats with no legal connection to that state. And hailing port designation is not such a connection according to the Federal law which established it in the first place. The law is very specific as to what locality can be used as a hailing port. It is any place which is a part of populated census delineated area i.e not a made up, non-existing name.

[Island Time O25]

Originally Posted by Dave22q

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.

There is a problem with your statement. And it is this.

The gov't has simply no allowance in its bureaucratic maze for true liveaboards. A liveaboard buddy once described to me how during his interactions with one Federal agency he was told by the clerk to give him any address and not just "Vessel name, XXX harbor, state of" which he truthfully put on the application. The clerk said that a marina address would suffice. But the problem was that my buddy lives on the hook so the marina address was not an option.

Until and unless the bureaucracies learn and adjust to the fact that some people's "fixed address" is their boat name, such boat owners will have to use mail drops, friends' addresses or some such. I asked my buddy if the PO box would suffice for that agency as apparently he did have one but that was not acceptable. They needed a physical address. Any physical address.

[DotDun]

Originally Posted by Island Time O25

I don't believe it is the USCG who notifies the state tax offices but the state offices upon their initiative peruse the CG lists for any state based hailing ports.

Some states do not require a documented boat to be registered with the state (which was the original scheme and reason for most documentations i.e. to by-pass the multi state mish-mash of rules and regs) just to pay applicable taxes if the boat is kept in the state (under whatever time frame that state's law says is applicable).

Those states which pursue taxes SOLELY on the nexus of the hailing port with no other connection of the boat to that state are most likely in violation of their own rules and laws concerning such nexus. But of course fighting this tax grab from the perspective of the hapless boat owner who is thousands of miles away and has little time or resources is not easy but still necessary. I would also follow up with a letter to one's congressman to point out this issue and how such tax grabs are upsetting the Federal documentation scheme which designed in the first place precisely to avoid such state grabs.

I understand the fact that the state, any state, would want to collect all taxes duly vested and due to it but not from the boats with no legal connection to that state. And hailing port designation is not such a connection according to the Federal law which established it in the first place. The law is very specific as to what locality can be used as a hailing port. It is any place which is a part of populated census delineated area i.e not a made up, non-existing name.

It is my understanding that the CA legislature have dictated via enacted law that CA tax collectors pursue tax collection on vessels solely based on using CA hailing port on the USCG documentation, which is simply a vanity hailing port and has no basis on where the vessel is located. And that law dictates there is tax due until such time the owner of the vessel proves the vessel is not in CA water. IOW, the owner is guilty of CA tax evasion until they provide evidence of their innocence.

What we haven't seen is CA going as far as filing liens or seizing property based solely on using USCG documentation hailing port as the only evidence of tax evasion. Hence, they use threatening letters and fictitious estimated tax bills until such time as you prove your innocence.

IMO, this is tyranny.

[Stu Jackson]

Originally Posted by DotDun

................
........................
.........................


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.

Of course it is.

But you simply aren't getting the point.

[Stu Jackson]

Originally Posted by Island Time O25

.................................
................................................
I asked my buddy if the PO box would suffice for that agency as apparently he did have one but that was not acceptable. They needed a physical address. Any physical address.

IIRC (from this and countless other tax discussions on this forum and others) this requirement is from the (gag!) "Patriot Act"

[ctl411]

[QUOTE=Island Time O25;2289842]I don't believe it is the USCG who notifies the state tax offices but the state offices upon their initiative peruse the CG lists for any state based hailing ports.

Some states do not require a documented boat to be registered with the state (which was the original scheme and reason for most documentations i.e. to by-pass the multi state mish-mash of rules and regs) just to pay applicable taxes if the boat is kept in the state (under whatever time frame that state's law says is applicable).

Michigan is one, they require registration. Documentation only gets you out of having to display numbers on the hull.
Still required to display registration tag. When buying out of state if tax paid was equal to or greater than Michigan you are all set. But if it is less they will collect the difference. If you/the boat are leaving the states you may escape sales tax/registration fees. If you stay you probably will be a target for the multiple water cop agencys.
I display registration numbers along with the tag. Just don't want to be bothered by questions about not having the numbers.

[DotDun]

Originally Posted by Stu Jackson

Of course it is.

But you simply aren't getting the point.

I get your point....it's easier to bend over for the bureaucrats than fight them.

[smj]

If you do end up registering the boat in Texas make sure you do it in a timely manner, the late fee is huge!


Sent from my iPhone using Cruisers Sailing Forum

[denverd0n]

Originally Posted by DotDun

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.

Well... Maybe.

If you are a Florida resident, and you bring the boat into Florida, then you must pay use tax. Using a Florida mailing address, however, does not automatically make you a Florida resident. The state of Florida is quite familiar with the concept of someone whose primary residence is elsewhere, even though they have an address in Florida and live here much of the year. We call these people "snowbirds."

The trick will be to establish and document a primary residence elsewhere, even though you are mostly using a Florida mailing address. If you can do that, and if you own and use your boat in another state for more than six months, then you owe no use tax to Florida.

[DotDun]

Originally Posted by denverd0n

Well... Maybe.

If you are a Florida resident, and you bring the boat into Florida, then you must pay use tax. Using a Florida mailing address, however, does not automatically make you a Florida resident. The state of Florida is quite familiar with the concept of someone whose primary residence is elsewhere, even though they have an address in Florida and live here much of the year. We call these people "snowbirds."

The trick will be to establish and document a primary residence elsewhere, even though you are mostly using a Florida mailing address. If you can do that, and if you own and use your boat in another state for more than six months, then you owe no use tax to Florida.

Good point! Yes, I was equating a FL mailing address with FL residency.

[denverd0n]

Originally Posted by DotDun

Good point! Yes, I was equating a FL mailing address with FL residency.

And probably 99% of the time that is how it is going to work out. Establishing primary residency elsewhere, while receiving all of your mail at a Florida address, is definitely going to be tricky. Still, if you can manage it...

[Dave22q]

Originally Posted by denverd0n

Well... Maybe.
If you are a Florida resident, and you bring the boat into Florida, then you must pay use tax. Using a Florida mailing address, however, does not automatically make you a Florida resident. The state of Florida is quite familiar with the concept of someone whose primary residence is elsewhere, even though they have an address in Florida and live here much of the year. We call these people "snowbirds."
The trick will be to establish and document a primary residence elsewhere, even though you are mostly using a Florida mailing address. If you can do that, and if you own and use your boat in another state for more than six months, then you owe no use tax to Florida.

Sales and use taxes are not tyranny but the way we the people chose to finance many state activities. For those who are so set on tax evasion schemes I advise you center your criminal intentions where the money is, income tax. all you need is some phony ID you change every few years along with your job, home, bank accounts, etc. Or just maybe it is easier to obey the law and express your frustration by supporting politicians who promise tax cuts but seldom deliver.

[DotDun]

Originally Posted by Dave22q

Sales and use taxes are not tyranny but the way we the people chose to finance many state activities. For those who are so set on tax evasion schemes I advise you center your criminal intentions where the money is, income tax. all you need is some phony ID you change every few years along with your job, home, bank accounts, etc. Or just maybe it is easier to obey the law and express your frustration by supporting politicians who promise tax cuts but seldom deliver.

Whoa! Where did this come from? Who suggested tax evasion?

My suggestion of tyranny is not around paying taxes that are due, but center on CA tax collection techniques and their attempts to collect taxes that are not due! Please read the posts!

FWIW, tax avoidance is not tax evasion nor is it a criminal act.

[BrettB]

We went with Ft. Lauderdale, FL as the Hailing Port, SBI as the mailing address, but unfortunately the documentation company used our California address as the physical address of the managing owner.... Based on previous replies, if the USCG sends out any type of notifications, I sure hope it is indeed the hailing port and not the physical address.