In California, the sale of a vessel are never occasional sales and requires a seller's permit.
https://www.cdtfa.ca.gov/taxes-and-f...uals/am-10.pdf
State of California Audit Manual
Audit Manual
Chapter 10
OCCASIONAL SALES — SALE OF A
BUSINESS
SALE OF A BUSINESS 1004.00
WHEN SUBJECT TO THE TAX 1004.05
The following types of sales are subject to tax unless they meet one of the criteria described in Section 1004.10 or are otherwise exempt.
a) The tax applies to that portion of the gross receipts from the sale of an entire business which represents the selling
price of tangible personal property held or used in an activity for which the seller is required to hold a seller’s permit and acquired by the purchaser for use rather than resale.
Transfer of Partnership Interest (Cont.) 1004.40
. . .
g) Vehicles, Vessels and Aircraft. Transfers of vehicles, vessels and aircraft are never occasional sales and transfers of these items may be subject to use tax even though the sale of other assets may be exempt occasional sales.
h) Tax applies to sales of an interest in an LLC and distributions of liquidating interests in an LLC in the same manner as it applies to sales of partnership interests and liquidating partnership distributions
There is an exception when the real ownership does not substantially change":
VEHICLES, MOBILEHOMES, COMMERCIAL COACHES,
VESSELS AND AIRCRAFT OCCASIONAL SALES 1001.40
Neither sales nor use tax applies to the sale or use of vehicles required to be registered with the Department of Motor Vehicles, nor to off‑highway vehicles subject to identification under Division 16.5 of the Vehicle Code, nor to mobilehomes and commercial coaches required to be registered with
the Department of Housing and Community Development,
nor to vessels or aircraft, providing:
a) Such property is included in a transfer of all, or substantially all, the property held or used in the course of business activities of the person selling the property and the real or ultimate ownership of the property after the transfer is substantially similar to that which existed before such transfer; or
b) The sale or transfer qualifies for the
family exemption provided by Section 6285. Claimants
of this exemption must submit satisfactory evidence of qualifying relationship to the Department of Motor Vehicles.
Reference:
https://www.cdtfa.ca.gov/lawguides/vol1/sutr/1595.html
(b) Sale or Reorganization of All or Part of a Business.
(1) General. In general, when a person sells a business which is required to hold a seller's permit, tax applies to the gross receipts from the retail sale of tangible personal property held or used by that business in the course of its activities requiring the holding of the seller's permit. The gross receipts from the sale of the business include all consideration received by the transferor, including cash, notes, and any other property as well as any indebtedness assumed by the transferee. It is irrelevant that the indebtedness assumed may have arisen solely in connection with the transferor's acquisition of the tangible personal property transferred, the other property transferred, or some combination thereof. That is, the transferor is selling a business, and all consideration received is for that business. The measure of tax is the
price agreed to by the parties. In the absence of an agreement as to the price of the tangible personal property, the gross receipts from that sale is allocated among the taxable portion and the nontaxable portion by dividing the selling price of the tangible personal property acquired by the purchaser for use rather than resale by the selling price of the entire business
sold, and then multiplying that amount by the total gross receipts (i.e., all consideration) received for the business. Book value will be regarded as establishing the price of properties sold.
(See Regulation 1610 for special rules applicable to sales of vehicles, vessels, and aircraft.)
Reference for section 1610:
https://www.cdtfa.ca.gov/lawguides/vol1/sutr/1610.html
Sales And Use Tax
Regulations
Title 18. Public Revenues
Division 2. California Department of Tax and Fee Administration — Business Taxes (State Board of
Equalization — Business Taxes — See Chapters 6 and 9.9)
Chapter 4. Sales and Use Tax
Article 9. Special Provisions Affecting Vehicles, Vessels, and Aircraft
Regulation 1610
(a) Definitions. For purposes of this regulation the following definitions govern:
. . .
(2) "Vessel." "Vessel" means any boat, ship, barge, craft, or floating thing designed for
navigation in the
water, except:
(A) A seaplane.
(B) A watercraft specifically designed to operate on a permanently fixed course, the movement of which is restricted to or guided on such permanently fixed course by means of a mechanical device on a fixed track or arm to which the watercraft is attached or by which the watercraft is controlled, or by means of a mechanical device attached to the watercraft itself.
(C) A watercraft of a type designed to be propelled solely by oars or paddles.
(D) A watercraft eight feet or less in length of a type designed to be propelled by sail. A motor or other component of a vessel shall be deemed to be a part of the vessel when sold therewith.
. . .
2) Vessels and Aircraft.
(A) Aircraft and Documented Vessels. Except as provided in subdivision (c)(2)(C), purchasers of aircraft or documented vessels from any person other than a person required to hold a seller's permit by reason of the number,
scope, and character of the person's sales of documented vessels or of aircraft, as the case may be and not otherwise specifically exempt shall report and pay tax to the board. A documented vessel means a vessel which is required to be documented by the United States Coast Guard and for which the United States Coast Guard has issued a valid
marine certificate.
A purchaser who holds a seller's permit, or to whom a consumer's use tax account number has been assigned, must include the tax in the purchaser's return for the period in which the aircraft or documented vessel was purchased.
A purchaser who does not hold a seller's permit, or to whom a consumer's use tax number has not been assigned, shall make a return and pay use tax, measured by the sales price of the vessel or aircraft, on or before the last day of the calendar month next succeeding the month in which a return form is mailed to the purchaser, or the last day of the twelfth month following the month during which the vessel or aircraft was purchased, whichever period expires the earlier.
Any purchaser of a vessel or aircraft who registers it outside the state for the purpose of evading the payment of taxes due shall be liable for a penalty of 50 percent of any tax determined to be due on the sales price of the vessel or aircraft.
(B) Undocumented Vessels. Any vessel which is not required to have, and does not have a valid
marine certificate issued by the United States Coast Guard is an undocumented vessel.
Purchasers of undocumented vessels, the sales of which are exempt from sales tax under (b)(1) above, shall pay the use tax to the Department of Motor Vehicles, acting for, and on behalf of, the Board pursuant to section 9928 of the Vehicle Code, at the time of making application for
registration except:
1. When the applicant establishes that the tax is inapplicable under the general exemptions in (b)(2)(A) and (b)(2)(C) above.
2. When the applicant furnishes to the Department of Motor Vehicles a certificate of use tax exemption or tax clearance certificate issued by the Board.
3. When, operative January 1, 1996, the applicant has proof of payment of sales or use tax to a broker under the provisions of subdivision (c)(2)(C).
If at the time of
registration the purchaser does not have the necessary
documentation to establish that tax does not apply but wants to secure immediate action upon his or her application for registration, the purchaser will be required to pay the tax to the Department of Motor Vehicles. If the purchaser can thereafter establish that no tax was applicable, he or she may file with the Board a claim for refund of the tax paid to the Department of Motor Vehicles.
If the purchaser makes an application to the Department of Motor Vehicles which is not timely, and is subject to penalty because of delinquency in effecting registration or transfer of registration of the undocumented vessel, he or she then becomes liable also for penalty as specified in Section 6591 of the Revenue and Taxation Code, but no interest shall accrue.
If the purchaser does not make application to either department, or does not pay the amount of use tax due, or files a return with the Board under section 6455 of the Revenue and Taxation Code which is not timely, interest and penalties shall apply with respect to the unpaid amount as provided in Chapter 5 (commencing with section 6451) of the Revenue and Taxation Code.
Any purchaser of a vessel who registers it outside the state for the purpose of evading the taxes due shall be liable for a penalty of 50 percent of any tax determined to be due on the sales price of the vessel.
(C) Vessels and Aircraft Purchased Through Brokers. Notwithstanding any other provision, when a person purchases a vessel or aircraft, on or after January 1, 1996, from another person through a broker, the purchaser is relieved from the liability for use tax on the transaction only to the extent that he or she:
1. has paid an amount as sales or use tax to the broker, and
2. has obtained and retained a receipt from the broker showing the payment of such tax.
The purchaser is relieved from liability only to the extent of the amount paid, and for which a receipt is provided, but remains liable for any amount of tax later determined to be due. An amount designated as sales or use tax collected by the broker from the purchaser constitutes a debt owed by the broker to the state and the broker shall be liable for that amount as if he or she were a retailer engaged in business in this state required to collect that amount as use tax from the purchaser.
Subject to the lack of exemption for vessels discussed below in section (c).
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