Sales tax on a boat that will be leaving the country

[Cheechako]

As mentioned each state is different.
The answer to your broker may be "you will be moving the boat out of state within 90 days" Do so.

If you can keep doing that, you may be able to avoid it. It will be a PITA though.

Also, you can store the boat on the hard in many states without needing to pay the tax. (states want the revenue) You may have to have some work done to do so. Keep the receipts.

[garyfdl]

I'm always amazed at the suggest hoops and hurdles people suggest to avoid paying tax. Do they not realize the everyone benefits from taxes?

JUST PAY THE STUPID TAX!

[valhalla360]

Talk to a tax accountant and get it in writing...a big chunk of the advice on here is wrong but if the tax man comes to collect, they won't be the one paying the bill. A tax accountant who put it in writing will be someone you can go back on.

Alternatively, just pay the tax bill as you most likely legitimately owe it and the penalties if they catch you will be high.

[danstanford]

Originally Posted by valhalla360

Talk to a tax accountant and get it in writing...a big chunk of the advice on here is wrong but if the tax man comes to collect, they won't be the one paying the bill. A tax accountant who put it in writing will be someone you can go back on.

Alternatively, just pay the tax bill as you most likely legitimately owe it and the penalties if they catch you will be high.

In my experience you won't get very far expecting an accountant to come good for a mistake in any appreciable financial way. A couple of years ago as Chair of a volunteer board I had to sign the accountants engagement letter which contained language stating they were not responsible for identifying fraud within the organization even though these were audit level statements.

[S/V Illusion]

Originally Posted by Moontide

No sales tax on boats in Rhode Island (by law) and USCG documented don't need to be registered there. Just have to establish a "presence" there. I used a LLC registered in RI for boat bought in Fl and removed from FL within 90 days. No sales tax.


Ck rules for state where you close the sale. For instance, in Florida you have 90 days to get the boat out of the state before you will owe sales tax (and maybe time in a yard having work done doesn't count against the 90).

When we live in RI, the statute required we register it there regardless of CG documentation.

It sounds like you created the RI LLC for no reason if the boat was in FL for less than 90 days. Unless it was simply to avoid taxes in which case, you should send a thank you note to those of us who pay for your share.

[PaulCrawhorn]

The legal domicile of the owner for state income tax (if any) purposes

has nothing to do with sales tax, property taxes and registration requirements.

Only the "habitual" location / use of the boat itself, and as stated the rules, number of days etc, vary from state to state.

A low sales tax may be paid in one state, then a top-up required in the next one, given credit in the latter for what you paid in the former.

But pretty certain some state will get your money unless you keep moving every few weeks, USCG documentation is irrelevant to overriding those "time in state" rules.

Some states revenooers actually walk the marinas and then just send out bills for what they think is owed, and

the burden of proof is on the owner, keep your receipts, logs etc handy if you think you have grounds to fight it.

And I also say, Just Pay your Damn Taxes

[garyfdl]

Originally Posted by PaulCrawhorn

The legal domicile of the owner for state income tax (if any) purposes

has nothing to do with sales tax, property taxes and registration requirements.

Only the "habitual" location / use of the boat itself, and as stated the rules, number of days etc, vary from state to state.

A low sales tax may be paid in one state, then a top-up required in the next one, given credit in the latter for what you paid in the former.

But pretty certain some state will get your money unless you keep moving every few weeks, USCG documentation is irrelevant to overriding those "time in state" rules.

Some states revenooers actually walk the marinas and then just send out bills for what they think is owed, and

the burden of proof is on the owner, keep your receipts, logs etc handy if you think you have grounds to fight it.

And I also say, Just Pay your Damn Taxes

Wisconsin keeps it simple:

• Do you live in Wisconsin more than 6 months a year?

• Is the boat (or vehicle) registered in Wisconsin or does it spend more than 30 days in the state and/or it's waters?

YOU PAY SALES TAX

[valhalla360]

Originally Posted by danstanford

In my experience you won't get very far expecting an accountant to come good for a mistake in any appreciable financial way. A couple of years ago as Chair of a volunteer board I had to sign the accountants engagement letter which contained language stating they were not responsible for identifying fraud within the organization even though these were audit level statements.

Suing them might be a challenge but if you have a professional and he knows you are asking for it in writing, probably going to get a lot more solid response than random people on the internet who may have no knowledge on the subject.

[letsgetsailing3]

"Hey, do I need to pay sales tax?"


Yes


"But what if I'm leaving the country?"


When are you leaving the country?


"I don't know, someday."


lol

[sck5]

It is true that you dont have to pay a state tax if you federally document and then leave the country. As I recall there were also rules on how long you had to stay away for it to be legit. E.g. Florida said you have to leave within 30 days and not come back for 6 months. Florida is especially vigilant about these things but every boat broker knows the rules and can tell you what to do to stay legal (If you get a Florida boat broker who DOESNT know these rules then you need a new broker)

[denverd0n]

Originally Posted by letsgetsailing3

The way the law is written, you'd technically STILL owe in Florida if you always had the intent to keep the boat there.

That is why I specifically create a scenario where you used the boat in Georgia for two years before bringing it back to Florida. In fact, if you own and use a boat outside of Florida for more than six months, then you will not owe Florida any use tax when you eventually bring it here. The law in Florida specifically says that if you own and use (the "and use" part is important) something for more than six months, elsewhere in the U.S., then they will NOT consider that it was bought specifically for use in Florida.


I mention the "and use" part because there are people who have bought a boat in Florida, parked it in Georgia or Alabama for six months, and then brought it back -- and then tried to argue that they did not owe tax because it had been more than six months. Nope. The state is familiar with that dodge, and will require you to present some evidence that the boat was being used. Otherwise, you're paying the tax.

[denverd0n]

Originally Posted by garyfdl

Wisconsin keeps it simple:

• Do you live in Wisconsin more than 6 months a year?

• Is the boat (or vehicle) registered in Wisconsin or does it spend more than 30 days in the state and/or it's waters?

YOU PAY SALES TAX

Then Wisconsin is quite unusual in that regard.

[valhalla360]

Originally Posted by denverd0n

Then Wisconsin is quite unusual in that regard.

Michigan Use Tax will catch you up similarly if a Michigan resident and the boat enters Michigan within the first year of ownership.

A big question is how expensive is the boat the OP is buying?
- $2mil boat and it's a 6 figure tax bill. Get a good tax guy on it. Well worth the cost if it saves you $100k+
- $20k boat, it's maybe $1200...just pay the bill and move on with life because it's probably not worth the hoops you have to jump thru or to hire an accountant to set everything up and guide you to properly meet the rules.

Keep in mind with taxes, the presumption is guilty until proven innocent, so if they can document you are a resident and the boat was in the state, they are likely going to send you a bill and you will have to fight it.

[garyfdl]

Originally Posted by denverd0n

Then Wisconsin is quite unusual in that regard.

They applied the K I S S principle. It's one of our laws that actually makes sense and is understandable.

[Cynara]

Have you ever paid sales tax on a car. That is where you owe it