Taxes, how do they know?

[hellosailor]

"I drove a car licensed in Alaska in Georgia for several years without getting it licensed in Georgia."
Funny thing, last month a small firestorm got started in Atlanta because a lot of folks with supercars (typically imports priced over a million) got notices from the state tax authorities. It has been an open game for the past several years that they license the cars through sham corporations in Montana(?), paying no taxes compared to what Georgia imposes.

And you've apparently been seriously misinformed. Georgia doesn't require new residents to register their cars in ten days, they allow 30 days from after residency has been established. For tourists and sojourners, it is harder to find the exact number, but it never will be less than what is required for residents.

And this year, the tax men sent out demand letters. Ooopsie.

Oh, and of course, we all might think it was rather greedy and inconsiderate of you not to drive with insurance. Not telling your insurer that your car really is living in another state, without being registered there, voids your coverage. I don't like having uninsured motorists around me on the road.

The tax men will win, that game was played in the 70's in the Northeast with boats having sham Delaware corporate owners.

But as long as you are happy to let the tax men seize your boat and everything on it, that's just fine. They may file a lien against any earnings you have, they may seek to arrest you, but the boat is the easy thing for them to grab.

We don't all LIKE "Caesar", we don't all agree with them. But sometimes life is just easier and cheaper if you render unto Caesar, and cross that worry off your list.

[john61ct]

And of course being mobile, you can choose to actually **live** in a jurisdiction with lower taxes and that suits your political beliefs better.

I'm sure the urban centers would be quite happy about that.

[lituya1617]

Even negative comments can be instructive. I strongly believe that my beloved country has entered a phase of its history where the citizens have been so brainwashed that they will agree with anything bureaucrats come up with. We no longer have the rule of law here; rather, we have the rule of rule makers, secondary and faceless bureaucrats handed power by legislators in an extra-constitutional manner. Legislators no longer make law; they hand off legitimate power to bureaucrats who were never intended to have such power in our system. I am now an old man and I fear my grandchildren will live in a world so lacking in freedom that they will be unknowing slaves. Chief among the methods bureaucrats use to control the people is the ability to tax, mandate licenses, publish thick books of rules nobody else ever reads and could not understand if they did, and establish hundreds of "boards" with the power to punish administratively and/or ruin your life. Don't believe me? Try reading a year's worth of the Federal Register! You will read about 100,000 pages and be able to claim you are the only one who ever accomplished that feat. But those pages are the rules and regulations we are expected to obey. And they change continually. This is an intentionally impossible requirement. Worse yet, those are only the federal rules - 50 states and thousands of other governmental entities are all busy doing what the feds do. The result is so undemocratic and contrary to the intent of the Constitution that the country I now live in barely resembles the country I grew up in. So, what has that to do with all the use taxes and fees the various states impose on transient boaters? Read your Constitution: the power to control interstate commerce is the sole responsibility of the federal government. It is illegal to impose any tax on a citizen for merely transiting another state unless the federal government does it and the Constitution prohibits that when it prohibits an export tax. I look forward to some thug who calls himself an agent of the state sending me a tax bill for transiting between the states. It will allow me to set a precedent in law and do away with many of these impositions on our freedom. However - NEWS FLASH - no state has ever sent me such a bill and no water cop has ever given me the slightest bit of trouble. I carry all the papers and safety equipment (and more) that anyone can demand and I have no problems. In my experience, people who meekly shell out whatever money the bureaucrats demand are afraid of consequences that never happen to anyone. When was the last time you know of a boat being seized for nonpayment of a tax on length of stay in a state unless that boat simply was not moved for many months? My point.

[denverd0n]

And yet, once again, yes, of course there are people out there who get away with breaking the law. There are a whole category of people -- called "criminals" -- who make a living that way. The rest is just a lot of rationalization and excuses. You can try to justify breaking the law all you want, but in the end you are still breaking the law.


Don't expect any sympathy from anyone when (if) you get caught. Expect even less sympathy if you start spouting nonsense about how the law doesn't apply to you because of how you interpret the Constitution.

[Checkswrecks]

I groan every time I hear a whine like Lituya's because nearly none of those many pages of Federal Register or State changes affect any of us as individuals. The vast majority are about the process of how the Government functions, contracting rules, spending appropriations, changing of fees on imports, limitations on haz-mat, constantly changing limits and rules on law enforcement officers and other public employees, changing financial regs (usually after crimes or problems), reactions to accident patterns (speed limit changes for example), and the biggie: Public Notices. Not one of the above ever needs to be known by the typical person. The biggest that are seen by individuals and aggravating to me are the annual changes to the tax code, which are made as understandable as possible with the current structure of funding our system of Govt. (This is a boating forum and not the venue to bitch about that.)

I work all over the world on a regular basis and yes, I agree that we have a lot of regulations and things can seem overwhelming. But if you even casually try to look, the Fed and State Registers are actually quite easily searched. Want to know about the current Florida boat tax to keep to the subject here? Googling "Florida boat tax law" gets an easy answer, whether you like the results or not:
https://www.floridasalestax.com/docu...nd-Brokers.pdf

The cold hard fact is that since people started living together in the earliest Kingdoms, some form of taxes have been required. For the developed world, our taxes are actually lower than most and none of us want to have the crime and other issues that I see in most of the less developed world.

I never have to look over my shoulder because I just pay the minimum that I owe and don't go or do what I can't afford to. That's not what life is about.

[Winsome.]

For those that are residents in NY or NJ looking to purchase a boat (outside of the state especially) that is a high dollar boat (read high tax consequences) These are from the respective state DMV websites:

"Do I need to register my boat?
In New York, boats (watercraft) without a motor do not need to be registered. If you use a motor (electric or fuel-driven), regardless of the size of your boat or the motor, you must register your boat.

Your boat is exempt from New York State registration if it is

a lifeboat
registered in another state and not kept in New York for more than 90 consecutive days emphasis mine
a commercial boat with either U.S. or foreign documentation
a boat racing in competition"

And for instance neighboring New Jersey:

"How to title and register a boat
In order to use New Jersey waterways, all boats must be titled and registered except:

Those not based in New Jersey or operating for less than 180 consecutive days. emphasis mine
Foreign vessels
U.S. public vessels
Ship's lifeboats
Non-motorized vessels used exclusively on small lakes and ponds on private property.
Racing vessels with New Jersey State Marine Police permit.
Non-motorized inflatable devices, surfboards, racing shells, dinghies, canoes and kayaks.
Non-motorized vessels less than 12 feet in length.
Tender/dinghy used solely for direct transportation between a vessel and shore."

And say your boat is Delaware LLC owned (whether Coast Guard Documented Boat or not) and registered in Delaware with Delaware Address Service (or Montana LLC Owned and registered but can't be a USCG Documented Boat):

Delaware regulations state that if the vessel is to be used, docked, or stowed on the waters of this State for over 60 consecutive days, Delaware is its “State of Principal Use.” emphasis mine

It is important to keep proper receipts or paper trail of time "spent" in each local. Make sure in a given year you don't spend more than 180 consecutive days in NJ, or 90 consecutive days in NY (perhaps show marina receipts with specific dates of transient stays) and legally, properly register your boat elsewhere. This is not about paying less registration fees. It is about legally, properly minimizing sales/use tax liabilities as well as other legal liabilities. This is usually not worth it for lower priced boat purchases. People in other states have access to similar situations. As always, feel free to interpret the relevant DMV information presented here as you see it and your opinion may be different than mine.

[Group9]

Originally Posted by denverd0n

And yet, once again, yes, of course there are people out there who get away with breaking the law. There are a whole category of people -- called "criminals" -- who make a living that way. The rest is just a lot of rationalization and excuses. You can try to justify breaking the law all you want, but in the end you are still breaking the law.


Don't expect any sympathy from anyone when (if) you get caught. Expect even less sympathy if you start spouting nonsense about how the law doesn't apply to you because of how you interpret the Constitution.

Didn’t stop John Kerry from running for President.
https://www.huffingtonpost.com/2010/..._n_656985.html

[hellosailor]

Winsome, that's dangerously high right.
Yes, if you are a NYS resident, you do not have to register your boat unless it spends 90 contiguous days in NYS waters. In the waters, time on the hard does not count. But simply going across the Hudson and fueling in NJ, then docking or anchoring out, or doing the same thing in CT, would reset your registration clock, correct.
Not so the use tax clock. If you are a NYS resident (and I think NJ is the same policy) you still owe USE TAX on the purchase of the boat, or sales tax if it was bought in state.
Normally these taxes are collected by the registration (DMV) folks, but you still OWE the taxes as of the date of purchase, with a short grace period.
After that grace period, if you haven't come forward to pay the appropriate tax, you will still be fined for unpaid taxes, penalties and interest, from the day you bought it. Doesn't matter where it was or wasn't, as one NYS forum member found out the hard way when he first brought his boat back home into NYS after something like 15 years in other places.
Devil's in the details.

And regardless of who you are, you'd better have a recognized boating safety certificate before you take the helm of a motorized vessel anywhere in NJ waters. No exemptions for passers-through, no grandfathering. Any motor over (12?) hp, and they can bite. AFAIK the only state in the nation that is that ruthless about "no grandfathering".

[Winsome.]

[QUOTE=hellosailor;2815049]Winsome, that's dangerously high right.
Not so the use tax clock. If you are a NYS resident (and I think NJ is the same policy) you still owe USE TAX on the purchase of the boat, or sales tax if it was bought in state.
Normally these taxes are collected by the registration (DMV) folks, but you still OWE the taxes as of the date of purchase, with a short grace period.
After that grace period, if you haven't come forward to pay the appropriate tax, you will still be fined for unpaid taxes, penalties and interest, from the day you bought it. Doesn't matter where it was or wasn't, as one NYS forum member found out the hard way when he first brought his boat back home into NYS after something like 15 years in other places.
Devil's in the details.

Here are use tax details as of approximately 2015:

"New York’s new rules define taxable “use” much more generously. Under the old rules, a taxable use occurred as soon as the boat entered New York. Under the new rules, a taxable use doesn’t occur until the first of the following events:
The use of the boat in New York for a period of 90 consecutive days;
The date upon which the boat is required to be registered under the Vehicle & Traffic Law (boats registered in another state are not required to be registered in New York unless kept here for 90 consecutive days); or
Actual registration."

[hellosailor]

I stand corrected then. It sounds like the opened up the barn doors in 2015(?) but I'd certainly like to see the actual regulations. I can't imagine that our tax authorities would be foolish enough to turn NYS into a "sales tax free haven" for boaters, without some other shoe dropping. Could you point me to them?

[Winsome.]

https://www.tax.ny.gov/pdf/memos/sales/m15_2s.pdf


See bottom of page 4.

The reason and purpose behind this law change was to level the playing field with better taxable situations like Florida so as to get more boats registered and used here in NY but yes, it is most advantageous for the "rich".

[hellosailor]

Incredibly sensible of them! Thank you for that.
Of course if you are a resident and purchase the boat in-state, the sales tax is still due "on" the sale date, but pushing off the use tax date that way...nice, very nice.
Just don't tell me they've gone and fixed all the pump-out stations around NYC...my heart's not strong enough to hear news like that. ;-)

[Montanan]

Originally Posted by Winsome.

For those that are residents in NY or NJ looking to purchase a boat (outside of the state especially) that is a high dollar boat (read high tax consequences) These are from the respective state DMV websites:

"Do I need to register my boat?
In New York, boats (watercraft) without a motor do not need to be registered. If you use a motor (electric or fuel-driven), regardless of the size of your boat or the motor, you must register your boat.

Your boat is exempt from New York State registration if it is

a lifeboat
registered in another state and not kept in New York for more than 90 consecutive days emphasis mine
a commercial boat with either U.S. or foreign documentation
a boat racing in competition"

And for instance neighboring New Jersey:

"How to title and register a boat
In order to use New Jersey waterways, all boats must be titled and registered except:

Those not based in New Jersey or operating for less than 180 consecutive days. emphasis mine
Foreign vessels
U.S. public vessels
Ship's lifeboats
Non-motorized vessels used exclusively on small lakes and ponds on private property.
Racing vessels with New Jersey State Marine Police permit.
Non-motorized inflatable devices, surfboards, racing shells, dinghies, canoes and kayaks.
Non-motorized vessels less than 12 feet in length.
Tender/dinghy used solely for direct transportation between a vessel and shore."

And say your boat is Delaware LLC owned (whether Coast Guard Documented Boat or not) and registered in Delaware with Delaware Address Service (or Montana LLC Owned and registered but can't be a USCG Documented Boat):

Delaware regulations state that if the vessel is to be used, docked, or stowed on the waters of this State for over 60 consecutive days, Delaware is its “State of Principal Use.” emphasis mine

It is important to keep proper receipts or paper trail of time "spent" in each local. Make sure in a given year you don't spend more than 180 consecutive days in NJ, or 90 consecutive days in NY (perhaps show marina receipts with specific dates of transient stays) and legally, properly register your boat elsewhere. This is not about paying less registration fees. It is about legally, properly minimizing sales/use tax liabilities as well as other legal liabilities. This is usually not worth it for lower priced boat purchases. People in other states have access to similar situations. As always, feel free to interpret the relevant DMV information presented here as you see it and your opinion may be different than mine.

Note that Sales and Use tax rules often differ from state registration rules. You may not be required to register a boat in a jurisdiction but may very likely be required to pay sales or use tax and / or property taxes on the vessel. One has to review each state law and how such applies to your specific situation.

By way of example: New Jersey Public Law: Whereas New Jersey provides an exemption to titling and registration for vessels not based in New Jersey or operating for less than 180 consecutive days.

P.L. 2015, c. 170 amends the Sales and Use Tax Act to provide a 50 percent Sales and Use Tax exemption on the sale of new and used boats or other vessels (including motorboats, sailboats, yachts, and cruisers) and caps the amount of Sales and Use Tax so that the most that the State can collect on a particular sale is $20,000. As a result, the Sales and Use Tax rate goes to half of the applicable rate. There is no further reduction of the Sales and Use Tax rate on sales in an Urban Enterprise Zone or in Salem County. The exemption and cap apply to purchases occurring on and after February 1, 2016. Because rental/lease transactions are treated as retail sales under the Sales and Use Tax Act, these changes also apply to rentals and leases of boats or other vessels.

In addition to the exemption and cap, for uses on or after January 1, 2016, the law allows a grace period for certain boats or other vessels purchased out of State by a New Jersey resident to be used in New Jersey for up to 30 days in a calendar year without triggering use tax so long as:
the boat or other vessel is legally operated by the resident purchaser and meets all current requirements pursuant to applicable federal law or pursuant to a federally-approved numbering system for boats and vessels adopted by another state; and
the resident purchaser is not engaged in or carrying on in this State any employment, trade, business, or profession in which the boat or vessel will be used in this State.

As to the Montana LLC ownership, there would not be anything unique about arranging for a Montana LLC owning titling of the vessel. It would need to be registered and / or documented as any other vessel and would be subject to all other legal liabilities. Big Sky laws do not trump other state laws, even if Montana is the Last Best Place. [My bias showing, the water temperature is presently a balmy 37.3 degrees F].

[Winsome.]

In addition to the exemption and cap, for uses on or after January 1, 2016, the law allows a grace period for certain boats or other vessels purchased out of State by a New Jersey resident to be used in New Jersey for up to 30 days in a calendar year without triggering use tax so long as:
the boat or other vessel is legally operated by the resident purchaser and meets all current requirements pursuant to applicable federal law or pursuant to a federally-approved numbering system for boats and vessels adopted by another state; and
the resident purchaser is not engaged in or carrying on in this State any employment, trade, business, or profession in which the boat or vessel will be used in this State.


The above statements are correct quotes and it is important to note that the Use Tax is for NJ residents not residents of other states such as NY.

Montana LLC boat ownership allows for Montana Boat registration (the little quirk there is that you actually are not able by Montana Law to register a USCG Documented Boat as it is seen as already "registered" by the Montana powers that be.) This Montana LLC Boat Ownership/registration (also no sales tax and it is permanently registered for a one time fee) would also negate the need for that boat to be NY or another state registered.

Perhaps we could loosely say Montana is to registering boats what Maine is to registering trailers.

[Montanan]

Originally Posted by Winsome.

In addition to the exemption and cap, for uses on or after January 1, 2016, the law allows a grace period for certain boats or other vessels purchased out of State by a New Jersey resident to be used in New Jersey for up to 30 days in a calendar year without triggering use tax so long as:
the boat or other vessel is legally operated by the resident purchaser and meets all current requirements pursuant to applicable federal law or pursuant to a federally-approved numbering system for boats and vessels adopted by another state; and
the resident purchaser is not engaged in or carrying on in this State any employment, trade, business, or profession in which the boat or vessel will be used in this State.


The above statements are correct quotes and it is important to note that the Use Tax is for NJ residents not residents of other states such as NY.

Montana LLC boat ownership allows for Montana Boat registration (the little quirk there is that you actually are not able by Montana Law to register a USCG Documented Boat as it is seen as already "registered" by the Montana powers that be.) This Montana LLC Boat Ownership/registration (also no sales tax and it is permanently registered for a one time fee) would also negate the need for that boat to be NY or another state registered.

Indeed Montana does not have any sales or use taxation for anything. But use of the vessel outside of Montana could subject the vessel to taxation in the state the vessel resides and of course registration and titling in that state depending on the specific laws for such state. The fact that there is a Montana registered agent of a Montana LLC does not change the sales or use characteristics of the property if the property resides outside of Montana. If the property [e.g. a vessel] resides in Montana then it is not under the jurisdiction of a foreign state such as New York, New Jersey. Ditto as to the requirement to retitle or reregister the vessel when it resides in another State's waters beyond the states grace period.

Sales and use tax apply to where the sale occurs and where the boat is used. If neither happened in Montana, registering in Montana is not of consequence except for potentially triggering the temporary period of waiver that a State with sales and use tax may provide a exemption.

Out-of-State residents are subject to sales tax if they own property in
New Jersey and have not paid sales tax of at least 7% to their home state.

Boats owned by nonresidents of Montana, that are properly registered in another state or country may operate in Montana for up to 90 consecutive days.

My boats, cars and trucks have permanent registrations with the State of Montana in which they are used. Once and done. I do need to obtain conservation stickers for the boats every couple of years but those are free of charge. And I need to have a tribal recreation permit to fish when sailing when in the reservation water's portion of Flathead Lake, as well as State fishing license.