How To Legally Avoid WA Sales Tax

[DesertBoater]

I am looking at buying a boat in Puget Sound, cruising her there for a year, then heading south. I’d love to avoid the sales tax, since I don’t plan on sticking around long.

My understanding is that in years past, out of state residents could spend 60 + 120 days in WA before heading to Canada to reset the clock. Does WA simply allow you to clear into BC and return the next day with the clock reset, or do they have rules about how often you can do this?

How about BC? Are they still relaxed about foreign flagged vessels and how long they can stay?

[evm1024]

First off you should contact the WA tax folks and run it by them. And talk to a WA tax lawyer.

Given that you have done that....

1) when you buy the boat be sure that the seller knows that you are removing the boat from Washington and that WA sales tax does not apply.

2) when you register the boat (in your home state or state of choice) be sure that the hailing port and paperwork addresses are not in Washington. This includes Documentation.

3) be sure that you get the boat out of Washington before the max allowed stay time is up. You want to stay on the good side of the law.

This advise is worth less than the time it took to write it.....

[Hobie_ind]

We looked boats in WA around 5 years ago, so looked into this then. However my information is now a bit dated, so therefore I'll leave bulk of the specific feedback to others with more recent information.

I'm assuming from your name 'Desertboater' you're not Canadian? However if you are Canadian, be aware that the minute you bring the boat into Canada, Canadian taxes and duties (if applicable) are immediately due, so the idea of 'resetting' the clock by heading to Canada for a short stay wouldn't likely be an option. There are some very specific ways to defer it, but they aren't necessarily guaranteed or easy.

Have fun shopping.

[Gudgeon]

I did not purchase in Wa but Ca and used Wenthur Law Group. I was provide step by step instructions to follow to document purchase of boat in Ca. Then I had to provide receipts to show boat was taken out of Ca. They then filed all with Ca tax department and I received copies and letter releasing me from Ca tax liability on the purchase. Was simple and less than paying taxes

[DesertBoater]

Sorry to not be more specific. I live in Oregon, where we don’t have sales tax. It would be great to spend 6 months in WA, six months in BC and then back to WA, but need to make sure I don’t get dinged with a big tax bill.

[evm1024]

You register your boat in your State of primary use (Oregon).

When you buy the boat you specify that you are taking it Back to Oregon. And make sure that no tax is collected. This is Key.



Then you start on your way to Oregon.

When you buy it , register it in Oregon and put the Oregon stickers on it. Also be sure that your hailing port (on the stern for a documented boat) is Oregon.

If you are stopped in WA waters, showing them an Oregon drivers license and the boats Oregon registration "should" be enough to make it a short stop.

[Shrew]

Each state is different. I've attached the link directly from the State of Washington. The verbiage is very specific.

Vessels registered in another state.
-> Vessel is exempt from registration only for the first 60 days of use.

-> On or before the 61st day of use on Washington state waters, the owner must obtain a nonresident vessel permit as required under RCW 88.02.620.

-> If the principal place of use changes to Washington, the vessel must be registered in Washington.


https://www.dol.wa.gov/vehicleregist...isterboat.html

https://www.dol.wa.gov/vehicleregistration/usetax.html

[evm1024]

Vessel sales to nonresidents

Nonresidents of Washington may purchase vessels and take delivery in Washington without paying sales tax or use tax when the vessel is U.S. Coast Guard documented or pre-registered by the state or country where the vessel will be principally used after the sale and the vessel will be removed from Washington within 45 days of delivery.

See: https://dor.wa.gov/doing-business/bu...-sales-and-use

[DesertBoater]

Thanks, Shrew.

The RCW 88.02.620 is pretty specific. You can keep your boat in WA for 6 months of any continuous 12 months, as well as utilize the non resident vessel permit as desired.

Now does anyone know the rules regarding US boats in BC Canada and how long one can stay continuously or in a given period of time?

Thanks.

[Stu Jackson]

Originally Posted by DesertBoater

Thanks, Shrew.

The RCW 88.02.620 is pretty specific. You can keep your boat in WA for 6 months of any continuous 12 months, as well as utilize the non resident vessel permit as desired.

Now does anyone know the rules regarding US boats in BC Canada and how long one can stay continuously or in a given period of time?

Thanks.

I was soooo tempted to suggest you use Google and do your own homework, but I'm Canadian, so:


Visitor Information - Transport Canada


I can't read it for you, you'll have to do that yourself.


Look, I moved to BC from CA in 2016, and figured this out pretty easily, without this fine internet resource. OK, I did ask a few friends, in person. I DID the homework.



But it is NOT that hard to find ALL of this out. Heck of a LOT less complicated than VAT.


There, you would've had me in your corner.



Good luck, safe journeys and happy new boat.

[Dave22q]

Yet another would-be tax dodger. Things to consider-- 1. lots of smart guys have educated tax folks by trying assorted schemes. 2- penalties can dwarf any tax savings. 3- if you cannot afford the tax you surely cannot afford the boat.
Pay the $2.00 and spend you time work on controlling maintenence costs.

[Halien]

This is harsh, but if you can afford the boat and plan to stay in Washington for a year, just pay the tax.

[ztsf]

Be careful to understand TAX REQUIREMENTS vs. REGISTRATION and USE requirements. Each state is different and I would agree with the suggestion of simply talking with the State of Washington tax authorities.

Some good info can be gleaned off the BoatUS site under "government" for each state.

My example was in Massachusetts I'm a resident of NJ, but but bought the boat in MA. Since I'm not a legal resident of MA, I don't owe sales tax, but I would owe use tax if I continued to keep the boat in MA. I had a 14 day grace period to remove the boat from MA waters and 6 month moratorium on return to MA waters in which I would owe tax. This had nothing to do with registration of transient days allowed.

Also be careful of state sales tax reciprocity. MA tax was about 5% back then, NJ was 7%. If I had paid the MA tax and returned the boat to NJ, I would still owe NJ 2%.

This is just an example of how it worked in my case, Washington will be different, but it is likely that sales/use tax liability will be different that registration requirements. Talk to the State about that.

[Paul Elliott]

Originally Posted by Dave22q

Yet another would-be tax dodger.

Did you not bother to read the thread? The OP is not a WA state resident, and would like to *legally* not pay a WA state sales tax on a boat purchased in WA, and that he will not be keeping long-term in WA waters. This is not "tax dodging" by any means.

[MJH]

Your from Oregon so the way is pretty clear for you.

However, someone from WA may think he can save the tax by buying and storing the boat in OR, be careful. Prior to my purchase some time ago I enquired on OR purchase and found out there is a WA-OR agreement that WA residents buying along the Columbia river and some nearby ports will still get taxed by WA even if the boat is kept in those waters. You have to go a bit farther south to escape the tax and should check in advance with the WA Department of Revenue. I considered it but the drive to the boat in OR would be too long for me so I just paid the tax, some $5,000+ in my case.

MJH