Maine Sales Tax question

[Montanan]

Danno007

Lake McConaughy Country. Enjoy the Platte.

[TabbyCat]

Originally Posted by multi-hulls

Wondering if anyone would like to take a stab at my predicament?

OTOH...the boat has never been used in Maine...and once it's splashed it will hopefully high tail it out of there in less than 30 days....

Any experts out there willing to weigh in?

Asking for a friend LOL

I am no tax expert, but you should not be taxed in two jurisdictions on the same thing. So in my opinion, you should be paying for use in Maine, but not in California. So if you paid in California, then yes, apply for a refund.
The customary definition of "USE" is if the boat was in Maine, regardless of whether it was in the water on the hard, it was "used" in Maine. However, Maine is a little quirky - they call their use tax an "excise tax" and apply it if the vessel is kept in the water for more than 75 consecutive days, so you may have an angle there. But did you pay Maine sales tax? That's a whole 'nother ball of wax. Sounds like you need to have two separate conversations, one with each state.

[Montanan]

States routinely apply dual taxation of the privilege of both sales and use but all of the states provide reciprocity to each other by availing full credit for any sales / use tax previously paid to another state. If there is a difference in the tax rate between the states [and local additive rate] between the states one has to pay for the higher rates and does not obtain a refund for moving to a lower rate state.

In the OP's circumstances since the boat has not left Maine there should never have been any sales / use tax due to California and the erroneous tax paid should be pursued as a simple refund. And Maine should be due its ordinary taxation.

[DShant]

Doesn't the sales tax only accrue to boats in the water and staying in Maine for longer than 30 or 60 days? As I understand it you have never been in the water. You are out of state buyer. I would just bail out and no one will be the wiser.
As for use tax you haven't used it there.
Now where you go and how long you stay there is another matter but has nothing to do with leaving Maine.


Sail away Bud!

[danno7]

Great discussions, I could be needing all of this information. I have saved the discussion, so you will all be named as accomplishes when I am in the slammer for not knowing the law....

[Montanan]

You may become or are time bared for a refund.

California Filing a Claim for Refund (Publication 117)

https://cdtfa.ca.gov/formspubs/pub117/


How do I File a Claim?
You may file a claim for refund using CDTFA’s online services. To submit a claim for refund, simply login using your username and password and click on the account for which you want to request a refund. Click on the More link under the I Want To section. Then select the Submit a Claim for Refund link and follow the prompts.

You may also file a claim for refund using a CDTFA-101, Claim for Refund or Credit, or by sending us a letter. Your claim must state all of the following:

The specific reasons you paid too much tax.
The amount of tax you overpaid. If you're not yet sure of the amount, you may file for an unspecified amount.
The reporting period or periods for which you paid too much tax. Your claim can cover more than one reporting period.
You must sign and date your claim. Please include your phone number so that we can contact you if we have questions or need more information. To expedite the processing of your claim, you should send supporting documents such as copies of invoices or exemption certificates and an amended return(s) along with your claim. Please see the Required Information section for more information.

Where Do I Send My Claim?
Paper claims for refund may be submitted as follows:

Send your sales and use tax claim for refund and supporting documents, including amended returns to:

Audit Determination and Refund Section, MIC:39
California Department of Tax and Fee Administration
PO Box 942879
Sacramento, CA 94279-0039
For certified mail or delivery service:

Audit Determination and Refund Section, MIC:39
California Department of Tax and Fee Administration
651 Bannon Street, Suite 100, Sacramento, CA 95811
Send your special tax and fee claim for refund and supporting documents to the address below excluding claims for Diesel Fuel Tax Fee, eWaste Fee, Lead-Acid Battery Fee, Motor Vehicle Fuel Tax, or Tax on Insurers. See the Program Specific Guidelines section for an explanation of the exceptions.

Appeals and Data Analysis Branch, MIC:33
California Department of Tax and Fee Administration
PO Box 942879
Sacramento, CA 94279-0033
For certified mail or delivery service:

Appeals and Data Analysis Branch, MIC:33
California Department of Tax and Fee Administration
651 Bannon Street, Suite 100, Sacramento, CA 95811


What is the Deadline for Filing a Claim for Refund?
If you believe you have paid more tax than you owe, and you wish to be refunded, you must file a timely claim for refund, otherwise the CDTFA is unable to issue a refund. Whichever of the following dates occurs last is your deadline to file a timely claim for refund:

Three years from the due date of the return on which you paid too much tax (except for tax on insurers). Filing an application for registration of your vehicle with the Department of Motor Vehicles (DMV) is generally considered a return and relieves you of further obligation to file with the CDTFA.
Six months from the date you overpaid tax.
Six months from the date a determination (billing) became final, for most programs.
Three years from the date we collected an involuntary payment, such as from a levy or lien (except for Motor Vehicle Fuels Tax and Tax on Insurers as the collection for these tax programs are handled by the State Controller’s Office).
Be sure to file your claim for refund by the applicable deadline. If you don't file on time, you will not receive a refund, even if you paid too much tax.

Some special tax and fee programs, including fuel tax programs, have special requirements. Be sure to review the Program Specific Guidelines section for more information.

[Stu Jackson]

I moved my boat from California to British Columbia. It took a few letters and two visits to the CA tax office to get them to stop hounding me. The last letters were a year and then two years AFTER the office agreed with me.


Be persistent, it works.

[Montanan]

Originally Posted by multi-hulls

Wondering if anyone would like to take a stab at my predicament?

I purchased a sailboat in Maine 08/23. I live in California. It's a documented boat, and being a good tax paying citizen I proudly coughed up 9.5% sales tax to my fine state.

Maine made an inquiry to the seller, and he gave them this information, and since they have reciprocal tax arrangement I never heard a peep from them.

Now almost two years down the road, the boat is still in the boatyard where I purchased it...for various reasons...and I'm thinking to myself, this boat may never reach the golden shores of California...why did I pay so much?

To my surprise, lovely California tax girl says...(sit down for this)...send us proof the boat has never been here and put in for a refund, should not be a problem.

I have yet to reach out to Maine, but I would expect if California refunds my tax payment they would want their cut (I think 5.5%, might be less for out of stater)...

I'm wondering if they could hit me with fines and late fees? I did find a "Voluntary disclosure application" which might apply to things like this...

OTOH...the boat has never been used in Maine...and once it's splashed it will hopefully high tail it out of there in less than 30 days....

Any experts out there willing to weigh in?

Asking for a friend LOL

If you erroneously paid sales / use tax to California back in 2023 then you are very likely time barred from obtaining a refund from California but for future sales / use taxation purposes, you should be able to use the 9.5% paid tax to obtain a reciprocal credit from another state that you may need to register and pay a use tax for the privilege of being in their waters.

You would have needed to file for a refund with California within 6 months of having paid the erroneous sales / use tax.

Now Maine's tax is actually an excise tax and that appears to not be provided reciprocity of credit paid to California for California use taxation, especially given that no use tax was due California.

Reference for Maine's laws on Watercraft excise tax:


Title 36, Chapter 112: WATERCRAFT EXCISE TAX
36 §1501. Purpose
36 §1502. Excise tax in lieu of property taxes
36 §1503. Definitions
36 §1504. Excise tax
36 §1505. Unorganized territory
36 §1506. Rulemaking

https://legislature.maine.gov/statutes/36/title36ch112sec0.html


It appears that you will be out the 9.5% erroneous payment of tax not due.

Oh well, that is a yesteryear's event, water under the bridge, tide that has already flown.

So focus on getting straight with Maine.

[danno7]

More details! Now I know at least some of the law. If a person knows the law and still ignores it, then it becomes a bigly bigly chrime. I can change my name to Danno8, who would know.

Thanks again for adding all the great details.

[Montanan]

Enjoy your voyages.

Being from Montana, one tends to forget about consumption [Sales / VAT / GST] or privilege [Use] taxation as we have none, [a 9.5% savings compared to California from whence I previously lived in the Bay Area].

Do realize that such taxes can become liens on a vessel or a vehicle and that liability continues with the personal property it is associated and must be cleared by payment before the vessel / vehicle can be registered or titled to a new owner. This can be an unexpected expense to an unwary purchaser, one always need to assess if clear title is being passed during a sales transaction, similarly with unpaid personal property taxation which is another form of privilege tax.

All the best,

Dan