Taxes when Buying a Used Sailboat ?

[prroots]

I'm looking at a used sailboat for sale from a boat broker in North Carolina. I will most likely export it to Puerto Rico. Can anyone advise what taxes might be due? This breaks down to two questions: 1) Will the NC boat broker charge tax? and 2) Will Puerto Rico charge tax?

I have learned that a registered NC boat dealer must collect a 3% sales/use tax, but when buying from an individual in NC no sales/use tax is paid. This is from http://www.dornc.com/taxes/sales/boats_aircraft.pdf. What it doesn't say is how a boat broker classified.

Any help or advice appreciated.
Pete

[capt_douglas]

If you're buying from an individual, then I'd think, based on your comments, no taxes would be collected.

Here in Florida, you have 30 days to either pay the tax and register it in Florida or register it somewhere else. If you're registering the boat in Puerto Rico, then a letter to that effect may help prevent the NC tax. I'd check with the NC tax folks about your plans or if they will reimburse their tax if you register it elsewhere.

If it's a true sales tax, then I'd say you were out of luck.

[LostAtSea2011]

I bought my boat in Florida, from a private individual, and my bank collected the sales tax and documentation fees.

[capt_douglas]

As did I on my first one. On my second, I used the 30-day exception, left the state, and registered it in New Hampshire (where there is no sales tax). Since I left the state within 30 days, didn't register it in Florida, and followed the law, I wasn't charged sales tax. I did pay a title and vehicle transfer fee but that was considerably less than the 6% sales tax.

[VirtualVagabond]

Originally Posted by capt_douglas

As did I on my first one. On my second, I used the 30-day exception, left the state, and registered it in New Hampshire (where there is no sales tax). Since I left the state within 30 days, didn't register it in Florida, and followed the law, I wasn't charged sales tax. I did pay a title and vehicle transfer fee but that was considerably less than the 6% sales tax.

Any ideas on how rigid that 30 day exemption is, or if extentions can be obtained?
Buying from Australia, it can take 2-3 months to get all the documentation together and processed for the Aussie registration.

The other option would be to see if the sale contract could be forward dated, so that all necessary documentation could be concluded within the exemption period.

Any thoughts?

Vic

[capt_douglas]

Simply put, I don't know. However, if you're leaving the country or state I'd think there would be mechanisms in place for that. Another consideration is that you have all the information (HIN, sales dates, sales amounts, etc) and it might be worth contacting someone in Oz to see if they can help on their end. It might come down to a notarized document that can be faxed to you or the state department of revenue.

[Captain Bill]

In NC Sales /use tax is only paid when a boat is bought at "Retail" that is when the boat is owned by the dealership. The broker does not own the boat so technically you are buying from the owner and the owner is simply paying the broker a commission. You will not owe Sales/Use Tax. I went to pay my 3% when I did this and they told me to go away, I didn't owe them anything. This was even though I had purchased the boat from someone in Florida. Florida Gave me 90 days to get the boat out of the state or pay their sales tax. If you're going to take the boat to Puerto Rico you'll have to check out their laws, you may owe some taxes there, but you'll be free and clear in NC. Just be sure you get it out of the state before 60 days are up or you'll owe property tax.

[hellosailor]

Vic-
"The other option would be to see if the sale contract could be forward dated,"
That's probably illegal in most US states, Vic. Florida's tax and registration rules are all posted on various .gov web sites (i.e. myflorida.gov) so you can find out the facts firsthand.
You could do a sales contract paying all but the last dollar, with some phrasing like "sale to be completed on payment of one additional dollar, not later than..." and some dancing about insurance and liability issues, storage costs, and so on IF the seller was amenable. That's going to be something you'd need to negotiate over carefully though.

[VirtualVagabond]

Originally Posted by hellosailor

Vic-
"The other option would be to see if the sale contract could be forward dated,"
That's probably illegal in most US states, Vic. Florida's tax and registration rules are all posted on various .gov web sites (i.e. myflorida.gov) so you can find out the facts firsthand.
You could do a sales contract paying all but the last dollar, with some phrasing like "sale to be completed on payment of one additional dollar, not later than..." and some dancing about insurance and liability issues, storage costs, and so on IF the seller was amenable. That's going to be something you'd need to negotiate over carefully though.

Thanks. That sounds like a useful idea to explore. I'd think most sellers would be happy to have received all but a $ of the price, provided they were not carrying any unreasonable liability until the sale fully completes.