Tax Avoidance

[Stu Jackson]

Take a more careful look at WA state laws. I believe they have a very short time in which even documented or state registered boats can even visit without getting dinged, something like only 60 days. It's ludicrous, almost as bad as Florida.

What you might want to look for is a state registration where the state doesn't ding the boat for yearly property taxes (which CA does to us all).

You should learn the difference between documentation and state registration - simple, Google it, it's on the govt website.

Canada will get you once you return, so pay now or pay later, but later is always better and the value of the boat may be less. 17% if I recall correctly.

Good luck. It would helpful to learn what you decided to do and why.

[boatman61]

Beneteau made the perfect boat for you... the Evasion...

[SURV69]

One would hope that sales tax is a one-time deal.

That is, you pay taxes(or not), based on if you're eligible not to pay taxes or liable to pay taxes to whomever, at the time of the transaction.

Imagine if you slowly moved the boat from carolinas to the west coast, and every time you stayed a few extra days(to view the scenery), you'd now be responsible to pay sales taxes to that state . . . wow!

[cwyckham]

Note that the HST is being eliminated in BC soon which should have a big impact on used boat sales tax. Not sure if it week go to zero or just on half

[Morrissey]

In WA if you reside somewhere else you can get cruising permits, up to 1 year. But then you cannot re-enter WA for 2 years.

One good thing - if the boat is out of the water for repairs you can lodge an affidavit to 'stop the clock' for the expiry of your permit, in effect extending the time for the duration of the repair period.

[Cheechako]

Originally Posted by S/V Illusion

From the title, you imply intent to "avoid" taxes which is both illegal and causes a greater burden on the rest of us. If your intent is to only pay that which is legally required, why take tax advice from the Internet? Can you not identify the relevant tax authorities in the states and Canada?

There is nothing illegal about "avoiding taxes". it's a way of life with businesses. It always amazed me that there are legally really two sets of "books", one regarding taxes and one for all else.... anything you can do to legally avoid taxes is... well..... legal!

[hellosailor]

"In WA if you reside somewhere else you can get cruising permits, up to 1 year. But then you cannot re-enter WA for 2 years"
the "cruising permit" for a foreign-flagged vessel is a federally issued one, no state has any authority to issue or revoke that. Perhaps you are confusing this with some WA-state registration exemption for other US state registered vessels?

Stu-
http://www.dol.wa.gov/vehicleregistr...isterboat.html
Washington state refers to 60 days in conjunction with people who are moving to WA state, which the OP doesn't say either of them is doing, or WA residents, which the OP doesn't mention, or to boats in WA state waters for 60 days. In many states, a boat that is on the hard doesn't get the clock started until it is "in the waters" physically. Same thing in NY state, where a boat has to be "in the waters" for 90 consecutive days, and crossing the line outside of state waters restarts your registration clock. (Sales and use tax for residents is another matter entirely.)

[s/v Beth]

I would document it and moor it in Oregon.

[evm1024]

I cannot speak about bringing the boat back to Canada.

Generally speaking if you buy a boat in one state ant take it out of state directly after purchase you are not liable for sales tax or registration. Many states will also allow work to be done on the boat right after the sale without a need to remove the boat from the state or incurring taxes.

Washington State will charge excise tax (more or less sales tax) on boats purchased out of state and brought into Washington waters by owners who live in Washington. I assume that you and your wife are not Washington state residents.

Boats that stay in Washington for more than 60 (or 90 don't remember) days become subject to excise tax. TIme on the hard working on the boat is not counted.

In addition Washington is not looking too hard to find people who overstay so you may find that you will not be asked to pay tax.

If you decide to document your boat is the US you might want to consider Florida or Oregon as a home port. Brenden Ilse comes to mond and who knows who would do that in Oregon. Just remember that the USCG documentation database is made available to state agencies who do look through it to find those that are evading taxes. If you were to document it and use Seattle for the home port you would be liable for Washington taxes the moment the boat set foot in washington waters.

As a boat in transit I expect that your tax liability is at a minimum. Don't stay too long in one place, be careful to remove it from the place you purchased it from before the tax clock runs out, keep a low profile and read up on the tax codes.

Regards!

[SURV69]

almost sounds like a tariff . . .

[Kettlewell]

If you were to document it and use Seattle for the home port you would be liable for Washington taxes the moment the boat set foot in washington waters.

That isn't true in every case. Documentation is a funny thing in that you can choose any place you want to in the entire USA for the homeport, irregardless of where you live, the address you use for the documentation paperwork, or where you actually keep the boat. For example, I could buy a boat in RI with no sales tax, put Seattle down as my hailing port, and use my New York address for the paperwork. Perfectly legal and done all the time.

Another oddity is that states treat sales and use tax very differently, and I am not familiar with how Washington State does it. But, I do know there are quite a few states here in the East that exempt you from either sales or use tax if you purchase the boat out of state while a resident of some other state. For example, if you are a resident outside of Florida, buy a boat somewhere outside of the Florida, and then don't bring it into Florida for six months the sales or use tax would not be due if a few years down the road you decided to keep it in Florida. On the other hand, Maryland wants either the sales or use tax when you move there, with an allowance made for taxes paid elsewhere, no matter how long you owned the boat. You really have to check into the specific laws in the specific states you wish to go to, and don't trust any of us here on the Internet to get it right.

[evm1024]

Originally Posted by Kettlewell

That isn't true in every case. Documentation is a funny thing in that you can choose any place you want to in the entire USA for the homeport, irregardless of where you live, the address you use for the documentation paperwork, or where you actually keep the boat. For example, I could buy a boat in RI with no sales tax, put Seattle down as my hailing port, and use my New York address for the paperwork. Perfectly legal and done all the time.

Another oddity is that states treat sales and use tax very differently, and I am not familiar with how Washington State does it. But, I do know there are quite a few states here in the East that exempt you from either sales or use tax if you purchase the boat out of state while a resident of some other state. For example, if you are a resident outside of Florida, buy a boat somewhere outside of the Florida, and then don't bring it into Florida for six months the sales or use tax would not be due if a few years down the road you decided to keep it in Florida. On the other hand, Maryland wants either the sales or use tax when you move there, with an allowance made for taxes paid elsewhere, no matter how long you owned the boat. You really have to check into the specific laws in the specific states you wish to go to, and don't trust any of us here on the Internet to get it right.

Very true. I am speaking specifically about Washington State. Having Seattle as the hailing port and having the boat in Washington waters causes the Washington tax collector to pay you a visit. Washington does allow for a reduction of taxes based on other taxes paid and has no time limit that I know of.

Washington does not have an income tax and pays for everything with sales/excise/use taxes and thus does want their (your!) money.

Best to consult a tax lawyer of course so that you can avoid paying any tax you can (legally).

[Kettlewell]

What I've found happens is that the state you use as an address eventually contacts you about the boat, irregardless of what hailing port you use.

[evm1024]

Originally Posted by Kettlewell

What I've found happens is that the state you use as an address eventually contacts you about the boat, irregardless of what hailing port you use.

The Coast Guard's Port State Information eXchange (PSIX) system and Marine Information Safety and Law Enforcement System (MISLE). are made available to State law enforcement and tax enforcement officers.

The database is searched for boats with addresses (home port, owner, agent, etc) in the respective state that are not on the states tax roles. Soon you receive a letter....

[gts1544]

Anybody ask John Kerry?