Various Boat Taxes

[In Training]

I have read several threads on boat taxes and searched various states but still find this confusing.

Sales tax -- fairly straight forward.
personal property and/or license bureau tax - this is where I have trouble. How can you find out how each state taxes your boat for annual taxes?

We do not plan on living in the states for a number of years, but of course, will have to file tax returns and thus have citizenship and a legal residence in some state I guess. Have a list of states that do not tax social security income and sales tax by each state, but do not know how to find annual taxes.

And don't say you should not decide where to have legal residence based on taxes. If you are not going to be in the U.S. for many years, it would just not be sensible not to take this into consideration.

I know there are ins and outs to this and I do not expect to avoid all taxes, but no point in paying more than I have to (no political discussions please - that is personal preference).

Is there any web site or place that is of service to boaters that has this kind of information on how states annually tax liveaboard boats or anyone who can jump in and say what they do? Bahamas and caribbean included?

[zeehag]

property tax is not state but local municipality. good luck. where you place boat will have a municipality attached to it be it CITY OR A TOWN. you coul d sazil into country not within usa waters and take yur chances there--most cities in usa seem to have some kind of property tax assessed to pay for muni needs--police, fire, schools, etc. san diego calls it unsecured property tax. they assess your boat annd charge for the block of concrete on which your mooring lines are attached or to the dock to which you are attached. ventura also has property taxation. not sure whethr is secured or unsecured.

[S/V Illusion]

Originally Posted by zeehag

property tax is not state but local municipality. good luck. where you place boat will have a municipality attached to it be it CITY OR A TOWN. you coul d sazil into country not within usa waters and take yur chances there--most cities in usa seem to have some kind of property tax assessed to pay for muni needs--police, fire, schools, etc. san diego calls it unsecured property tax. they assess your boat annd charge for the block of concrete on which your mooring lines are attached or to the dock to which you are attached. ventura also has property taxation. not sure whethr is secured or unsecured.

Not necessarily. Every state is different and making generalities about sales tax, use tax, license fees, etc. is always a bad idea. So too is making assumptions regarding how citizenship or place of residence affects taxation as in many cases, it doesn't.

Unless you check with each taxing authority having jurisdiction in the location of purchase, use and dockage, you can't be certain of anything.

[zeehag]

i believe i specified kalifornikatia, in secific, san diego--you are the one generalizing and not reading my words. before ye slam me, you might want to READ what i said.

[Hudson Force]

Zeehag's advise above relates to California, but it's not characteristic of all states. Florida will levy a sales tax at purchase that will be 7%+/- 1% by county and followed by a yearly registration fee for vessels less than thirty years old. The registration fee for our 41' boat is about $185/year with no other taxes. I may be mistaken, but I believe that South Carolina is the only state in the southeast US that collects a yearly property tax on vessels.

[Cheechako]

When cruising I didnt register at all. Mailing address in WA state which is no income tax. Boat not in the state, so not taxed by the state. In WA anyway, even if your boat was in the state, but you dont put your boat in the water, there was no need to pay yearly registration. also, WA state will not let you title/register in the state unless it is in the state! Tried that....

[In Training]

thank you Cheechako.

Indiana requires us to register and pay annual tax if we own a boat, the statute doesn't say anything about not registering if it is not kept here. Non residents pay only if they keep or use the boat in Indiana. Each state is different I guess. Everything is such a pain to research.

[DotDun]

Originally Posted by In Training

thank you Cheechako.

Indiana requires us to register and pay annual tax if we own a boat, the statute doesn't say anything about not registering if it is not kept here. Non residents pay only if they keep or use the boat in Indiana. Each state is different I guess. Everything is such a pain to research.

If you reside in Indiana and keep your boat in Florida (for example), Indiana can't touch it. This is assuming the vessel is either USCG documented or titled/registered in Florida. Of course Florida will want their annual fee.

If you purchase a boat and title/register it in Florida within 6 months of purchase, Florida will collect sales tax, or the difference between whatever sales tax you paid where/when you bought and the local going rate. As mentioned above, Florida sales tax is 6% and counties can tack on up to another 1%. There is a cap on sales tax on boats of $18k ($300k vessel purchase price). The Florida annual registration fee scales from $12.25 to $196.50 depending on the length of the vessel. Again, counties can tack on a fee over and above the state's fee. One trick is to purchase the annual registration in a county that doesn't tack any fee on. I did that this year and saved $80 and cost me a postage stamp.

[skipmac]

So far I think all the answers are right on. Potential taxes will depend on:

1. State where you declare your official residence

2. State where you purchase the boat.

3. State where the boat is docked.

These three may or may not apply depending on how long you keep the boat in the various places.

For example, your state of residence may have a tangible personal property tax which may apply on any taxable item you own no matter where it is kept or stored. Other states will only apply this tax if the tangible property is physically in that state.

Many states will charge sales tax on a boat purchased in that state no matter where you live unless you remove the boat from that state within a certain time limit. Many states will charge you sales tax on a boat no matter where it is located if you are a resident of that state.

Many states will charge you sales tax and/or require local registration if you keep your boat in that state more than a certain number of days.

Obviously very baffling and there is no central repository of information. You will have to research the tax laws of all states involved: state of residence, purchase, registration and docking to find out.

[hellosailor]

Venue shopping can be dangerous.

The OP missed use tax. And in some states, residency will also require jury duty service. Florida excuses absentees abroad, some states will tell you tfb, come home or pay the summons.

There are web sites dedicated to comparing the tax burdens of different states, no guarantee that any one of them hits all the points. Search for "compare state taxes" to see them. If you think you've found a winner, correspond with that state directly to confirm the information.

[zeehag]

kali dropped USE tax many years ago -- now is only a sales tax then various municipalities have a property tax.

[skipmac]

Originally Posted by hellosailor

Venue shopping can be dangerous.

Very true. One misstep or if the one of the taxing agencies even thinks you are playing games to avoid their tax and you will get hammered. At the least you will have to pay all the taxes, possibly interests and penalties. Worst case you could face legal ramifications.

[hellosailor]

Zeehag, Cali says otherwise.

California Use Tax Information - Board of Equalization

And describes when and how it is applied.

AFAIK every state that has sales tax, also has use tax to ensure folks don't hop across the border for all their major purchases. Hell, NY made the news some years ago because tax enforcement agents were going to the NJ malls and checking cars with NY license plates that loaded major appliances. Domestic terrorism, to be sure, but it got them in news and that's what they wanted.

[In Training]

Thank you, I totally understand the risk and your point.

I just have no intention of retiring to a cold environment (as Indiana is during the winter) and expect to be out of the country for 3-10 years. Thus once I retire, I will be choosing a different state to be my residence and I might as well choose one that is the least tax expensive since I won't be here anyway.

[hellosailor]

Florida can be a great state to live in, especially if you aren't living there.<G> Of course if you never actually live there and have no intention of returning there...The states are eventually going to get wise to that loophole and figure out a way to get nasty about it. With any luck, not until after you have retired.