Any Tax Experts Out There?

[nhschneider]

When we bought out boat in 1996, our county tax assessor immediately started sending us an annual bill for property tax at a rate of slightly over 1% of the boat's value. As a benevolent gesture, he also started depreciating the boat to the point of 15 years later, it's value was less than a third of what we had paid for it. Then, we went sailing for eight-and-a-half years and when we returned, our greedy tax assessor assigned a new value of the boat which is almost three times what it's depreciated value had been before we left. His sidekick wrote me an email when I complained that said the BUC value of the boat is what they used to determine its value.

Of course, I can appeal the valuation but I was hoping I could be 'forearmed' with some advice by a friendly Forum member. Any ideas?

Fair winds and calm seas.

[Training Wheels]

Gee, Sounds like California!

[billknny]

Seems to me the best argument is their own paperwork showing the previous value. Of course they can just say "NO" and you're back to having to appeal.

Whatever you do while argueing, don't ignore or not pay a tax bill... the Kalifornia Commissars are ruthless.

But of course if you were to put the boat up for sale, what price would you ask? The depreciated price? or the BUC value? If the later, it IS a bit hard to dredge a lot of sympathy.

[denverd0n]

You want friendly advice? Move to a state that doesn't charge personal property tax on boats!

[S/V Illusion]

It’s California. The majority there voted for more taxes.

[Woodland Hills]

My advice is to get your tax questions answered by a CPA or other professional, not by an Internet sailing forum.

[belizesailor]

Originally Posted by Woodland Hills

My advice is to get your tax questions answered by a CPA or other professional, not by an Internet sailing forum.

+1. Who practices in the State in question.

[Dave22q]

you either need to study the law or hire a lawyer. I think it revolves around if the statue says market value or depreciated value. The former would be typical for real estate but property could well be different. How do they tax cars?
Hard to have sympathy for a Cali resident. Why on earth did you return?

[StoneCrab]

There is always a tax appeal process. This may not get you anywhere initially but hang in there. If denied at the appraiser level, there is usually a local governing board, sometimes called the "Board of Review". At that level, you usually need an attorney to present the case. Not because it is difficult, it is just their rules. If the Board of Review denies you, there is usually a State level Board of Review.

This all sounds pretty intimidating but it mostly consists of submitting paperwork, pictures with dates (if applicable) and some testimony or affidavit to back your case. Some locations like to run it like a court where you show up for the presentations, others it is just a matter of filing the packet. Most locations are moving toward online submissions, so you don't even need to leave your living room.

Local communities, counties and other taxing bodies are cash strapped, so the taxing bodies tell their employees to deny, deny, deny appeals but in a lot of cases, they are violating the law. Don't assume that they know the law or care. Their goal is to hang onto as much money as they can, so read up on what your rights are and what the law actually says. At the higher review levels, this is where an attorney can help you since he can cite case law and the statutes to make your case.

It also helps if you know what they are charging others with similar properties (boats). If you are being assessed at a higher level than they are or with a different method of assessment, you have a valid claims. The Freedom of Information Act allows for requests of their documents.

While most of the time, you can look up other properties online, it is a slow process to do it one at a time. If you can FOIA the entire County database, you or a friend with some database skills, can easily pick out similar properties and see how each is taxed. This is easier for real estate where you can boil it down to dollars per square foot by Township but I think this gives you an idea of the process. You'd be surprised at the range of assessments for properties in the same area and with similar characteristics. They get away with what they can.

On the other hand, federal documentation and registration in another state with a mail drop may be easier. It depends on how your State enforces their property tax laws.

[Capt Jerry]

I don't know how much the tax is (and that will decide whether this is a practical solution) but form a corporation or llc to own the boat in a state that doesn't tax boats as personal property- convey the title to that entity and voila.
You should run this by your attorney first.

[Dsanduril]

Before you even go the appeals route, have you filed the required Vessel Property Statement? This should form the basis of the assessor’s valuation.

If that is not enough and you have to appeal (or have an informed discussion first with the assessor - you can sometimes avoid the formal appeal if you go in with enough ammunition) then you should become very familiar with Assessor’s Handbook Section 576 - Valuation of Vessels.

[Montanan]

Well, someone has to fund the costs of the tide changing twice a day. Your boat may be old, but it still floats and displaces water doesn't it?

Personal property taxes are generally based on assessed market value. If you perceive the BUC is not a valid assessment, e.g., you have completed a major overhaul and update and it is better than new and worth MUCH, MUCH more than what they think it is worth, by all means contact them and ask them to double or triple their value; I'm pretty sure they will be happy to accommodate such correction of their records.

[letsgetsailing3]

What we need is a way to make boat taxes based on what you think your boat is worth when you go to sell it.

[Dsanduril]

FWIW using a 1996 Contest 48 I’d throw out a quick, 5-minute valuation (sight unseen, same as an assessor) of USD275-325k based on advertised asking prices and a slight discount to those. If you can get access to soldboat data (check with a friendly broker) you might be able to refine that a bit. If the assessor’s value is somewhere near there I think you’re going to have a tough row to hoe. Significantly higher and you might have the beginnings for the basis of argument. Lower and you might want to keep your mouth shut and pay the bill.

[MJH]

Originally Posted by nhschneider

When we bought out boat in 1996, our county tax assessor immediately started sending us an annual bill for property tax at a rate of slightly over 1% of the boat's value. As a benevolent gesture, he also started depreciating the boat to the point of 15 years later, it's value was less than a third of what we had paid for it. Then, we went sailing for eight-and-a-half years and when we returned, our greedy tax assessor assigned a new value of the boat which is almost three times what it's depreciated value had been before we left. His sidekick wrote me an email when I complained that said the BUC value of the boat is what they used to determine its value.

Of course, I can appeal the valuation but I was hoping I could be 'forearmed' with some advice by a friendly Forum member. Any ideas?

Fair winds and calm seas.

I would start by talking with the Department of Revenue and getting the Page & Verse on how boat property tax is determined...the guy you are talking to doesn't make the rules, he only follows procedure.

Read/learn the procedure for the determination of property tax and see what you come up with for your boat. If there is a discrepancy go back to him with your argument and how it compares to your previous experience, there may be exceptions.

~ ~ _/) ~ ~ MJH