Best state to register a new-to-us boat

[CarlF]

A lot of these posts conflate the different types of taxes. There are 3 things to consider:

1) Sales tax. You'd think this would be easy. But it often matters which state and also if it is the state where you are a resident (e.g. pay state income tax). I live in Massachusetts. There, a resident owes a sales tax if you "intended" to use the boat in Massachusetts when you bought it. (If you pay sales tax in another state that is a credit against any Mass sales tax). Of course, it's hard to measure intent so the interpretation is if you bring a boat into Massachusetts for even one day during the first six months of ownership, then owner has the burden to prove that they didn't plan to use the boat in Massachusetts when they bought it. If the boat first enters the state after six months then the state has the burden to prove the owner planned to use the boat in Massachusetts when he bought it - which is very hard to do unless the owner does something stupid like purchase a mooring for the boat before bringing the boat in (it's happened and the court said the owner had to pay sales tax). Some other states - even Florida - also don't charge sales tax if the boat doesn't enter the state for some period (usually six or 12 months). Again, states are much more likely to go after you if you are a resident of the state.

2) Use Tax - Some states treat the use tax the same as the sales tax (e.g. only applies for 6-12 months after purchase). But others don't have a time limit.

3) Property or Excise tax - many states have an annual property tax. This depends on where the boat is located. In Massachusetts it depends where the boat is on July 1. But in Massachusetts this tax is rarely more than a few hundred dollars. It's really not worth getting excited about. Many marinas are required to report to the state the boats that rent seasonal slips or moorings. This is the tax that John Kerry got in trouble for - not sales tax. Many states are very lax about enforcing this tax unless you are a resident of the state. It's often best to stay quiet until they figure out how to send you a bill and then pay it.

[Ike]

My sister lives in a motor home. I think she is a resident of SD (picked for tax purposes). We aren't close, so I can't tell you on any month where she is. Same issue. Sure, she almost never goes to SD -- but she almost never goes to ANY state, so where SHOULD she be a resident? Her last house was in TN -- but she hasn't been there in years.

We did that. Bought our motorhome in Colorado. Paid no sales tax. Took it immediately to Montana. Registered it. Paid no sales tax. traveled around for a while and used our daughters address in MT. Daughter moved to Washington. So we got a home address in SD through a mail forwarding service called of all things MY HOME ADDRESS. Registered the MH in SD. got a SD Drivers license. They do have a sales tax but it was minimal (A few hundred bucks if I remember correctly) Traveled for 3 or four years around the country as a SD resident, voted in SD. MY HOME ADDRESS is located in a little town called Emery near Mitchell (home of the Corn Palace). Many of the residents of Emery work at MY HOME ADDRESS, and the vast majority of residents are people living full time in their MH and traveling around the country. You only have to visit the state every two years IIRC which we did twice. Eventually we settled in Washington, and they collected sales tax. No big deal.

Any way, The question the OP asked is one I used to get frequently when I worked in the USCG Office of Boating Safety in Wash DC. There is some good advice given here. USCG Documentation does not relieve you of paying sales tax. Many states will require boat owners with CG Documentation, to register their boat to collect the tax, but hey only require you to display the annual sticker. They do not require you to display registration numbers. I will not get into the musical chairs issue of where to register and pay sales tax. That's up to you. But I have always advised people to check with the state. Every state has a Boating Law Administrator. You can find yours at https://www.nasbla.org/about-nasbla/boating-contacts They can tell you what the law is in their state as far as how long the boat can stay without being taxed, how much the tax is, is there a use tax, and so on. Do your research first so you don't get any nasty surprises.

PS: you can put any homeport you want on your boat that is CG Documented. There is a boat that has been in Port Townsend WA for over 20 years. The Home Port is Helena MT. It's never been there. Probably where the owner lives.

[Kettlewell]

3) Property or Excise tax - many states have an annual property tax. This depends on where the boat is located. In Massachusetts it depends where the boat is on July 1. But in Massachusetts this tax is rarely more than a few hundred dollars. It's really not worth getting excited about.

True, but watch out for some hefty property tax rates in other places that look like they might be low cost at first glance. Like North Carolina with its inexpensive marinas, but a pretty hefty annual property tax.

We did that. Bought our motorhome in Colorado. Paid no sales tax. Took it immediately to Montana. Registered it. Paid no sales tax. traveled around for a while and used our daughters address in MT. Daughter moved to Washington. So we got a home address in SD through a mail forwarding service called of all things MY HOME ADDRESS. Registered the MH in SD. got a SD Drivers license. They do have a sales tax but it was minimal (A few hundred bucks if I remember correctly) Traveled for 3 or four years around the country as a SD resident, voted in SD. MY HOME ADDRESS is located in a little town called Emery near Mitchell (home of the Corn Palace). Many of the residents of Emery work at MY HOME ADDRESS, and the vast majority of residents are people living full time in their MH and traveling around the country. You only have to visit the state every two years IIRC which we did twice. Eventually we settled in Washington, and they collected sales tax. No big deal.

I know a lot of RVers and boaters do this, but watch out for a couple of problems. #1 might be where you purchase health insurance, and how that works with a network of doctors. Even if you are on Medicare, many people choose advantage plans that often require you to use doctors in network. #2 can be the hassle of having to take care of certain things in person and the planning required if it is a place you don't normally go to. For example, I recently had to renew my driver's license, requiring a visit to the DMV. In many states you lose your right to vote if they send a card to your address and it gets returned. Stuff like that.

[sailingharry]

Originally Posted by Kettlewell

In many states you lose your right to vote if they send a card to your address and it gets returned. Stuff like that.

Many many years ago, in my misspent youth as a Naval Officer, I arranged to make FL my home state. Great for taxes. Then, I had, and, umm..., uh, "ignored" a traffic violation. NY sent the ticket to FL, FL sent it to what they thought was my address (the renewal form was weird, had a "mailing address" and an "address" and I think I filled it in wrong), it bounced, and they suspended my license. 3 years later (including two warning stops and a speeding ticket in a national park -- this was way pre-internet) I somehow found out. You could say I drove CAREFULLY while getting that sorted out!

So, yeah, there are problems with being a resident of a state you aren't living in! And for world cruisers, that problem exists no matter WHAT state you claim.


And related. I had a friend who sold his house and moved aboard his boat, "preparing" for distance cruising. Still went to work in the same building, so no real move involved, no state changes. He had some real challenges getting his car registration renewed, as MD required a physical address (and a boat at a long term lease in a marina apparently didn't qualify). This is sketchy second hand info, but I know that there was some sort of problem.

[Ike]

Most of these issues can be avoided by using a Mail forwarding service. They provide you with a physical address. Even the Federal Govt accepts these as an address, unlike a PO Box address. You have to keep them aware of where you are so they can forward your mail. Even a forwarding address to Postmaster at (insert city name) We did that in Key West. All our mail was sent to us Care of Postmaster, Key West, Fl. It's better and more convenient if the marina will accept mail for you, as do many RV parks. But you need to give the mail forwarding service advanced notice of your movements so they don't send mail to where you were. You simply tell them to hold your mail after a certain date, and then tell them when and where to restart sending it. The address you use does not contain the name of the forwarding service. it's addressed to you at their address. They sort it out, and at a time specified by you, forward it. Sounds more difficult than it is. Especially now with the internet.

[outbound 123]

No state sales tax in nc on used boat, annual or 3 yr registration about 140 dollars for 3 years ,but there is a personal property tax that varies by county, not much however, and only if you are in the slip in january ,then marina reports it.

[Kettlewell]

Most of these issues can be avoided by using a Mail forwarding service. They provide you with a physical address. Even the Federal Govt accepts these as an address, unlike a PO Box address.

Make sure that your mail forwarding service does have a street address that is acceptable to both state and federal authorities. Every address is searcheable in a database and mail forwarding services will come up as CMRAs (commercial mail receiving agency), and in my experience some of these are not accepted by things like drivers license authorities. Plus, make sure that the street address can also accept mail and deliveries. Some things, like voter registration checkups, are only sent to the street address on file--not to the mailing address. I lived in a place for years with a legal street address that the Postal Service would not deliver to and it was a nightmare. For example, my credit card company would only mail new cards to the street address.

[smj]

Originally Posted by outbound 123

No state sales tax in nc on used boat, annual or 3 yr registration about 140 dollars for 3 years ,but there is a personal property tax that varies by county, not much however, and only if you are in the slip in january ,then marina reports it.

Sadly the regulations have changed In NC and there’s a 3% sales tax with a cap of $1,500 on boats bought through dealers or I believe brought in from another state. If purchased through an owner then no sales or use tax?
https://www.ncwildlife.org/portals/0...blication1.pdf

[letsgetsailing3]

Originally Posted by sailingharry

Go back and re-read the thread. He will NOT be "actually going to keep the boat somewhere." Unless, by "somewhere" you mean "in the water."

YOU go back and read it. They bought the boat in Florida. Tax is due there. But, Florida has an exception if you're keeping the boat somewhere else. Fair enough. But they're shopping for a mythical place to register the boat. If they're honest, they're actually keeping the boat somewhere. If not, the tax is due in Florida.

Yes, that's gaming the system. And that's not the only place they're gaming the system, as they're planning to register their driver's licenses in, well, Florida. Maybe a hurricane eventually destroys the boat in Florida. But their boat is registered somewhere else, and that's the location they gave their insurance company. Odds are that the reason they want their official residences in Florida is because there's no state income tax.

So now they have to be very careful which stories they're telling which people. And one day, if things go south, they may suffer a little pain from this when their stories get crossed. Florida is a big state, and most folks bopping around to the Bahamas will end up spending a lot of time there. Makes sense to pay the taxes due.

So, back to my original comment. I maintain that honesty is the best policy.
If they pay the taxes due, they'll sleep just a little better.

[Fishigan]

I am reading this thread and taking a lot of notes. If I can get out of paying the taxes, then I will sleep with a smile on my face for doing so. It is just like when buying a motorhome, if I live in Alabama I pay ZERO tax on that $225,000 motorhome, but if I live in Michigan I get hit for 6% ($13,500) PLUS I get to pay $750 every year for the plate renewal.
If you are able to get around the taxes for the boat send me a PM. I will be needing the info in a couple of months.

[dmtparkerLcsk53]

What is the situation in Florida? Say I have a USCG documented boat with hailing port (and documentation) in NH which is my legal residence. Now I plan to leave that boat on the hard in Florida for hurricane season. Do I need to register it in Florida? Pay taxes in Florida?
Thanks

[SJAxtell]

As I understand it, if you leave a boat in Florida for more than 90 days, you must get a temporary permit. You do not need to change your hailing port or pay taxes in Florida. As far as it being "on the hard" for hurricane season, I'm not sure if the permit is required.

Good luck!

[Kettlewell]

What is the situation in Florida? Say I have a USCG documented boat with hailing port (and documentation) in NH which is my legal residence. Now I plan to leave that boat on the hard in Florida for hurricane season. Do I need to register it in Florida? Pay taxes in Florida?

Technically, Florida requires every boat to be state registered, even if it is USCG documented. This is what Florida says about who needs to re-register in Florida:

I will be vacationing in Florida this summer. Do I need to register my vessel there?
Florida recognizes valid registration certificates and numbers issued to visiting boaters for a period of 90 days. An owner who intends to use their vessel in Florida longer than 90 days must register it with a county tax collector or license plate agent. However, the owner may retain the out-of-state registration number if they plan to return to their home state within a reasonable period of time.

https://www.flhsmv.gov/motor-vehicle...ked-questions/

Practically, I don't know how strict they are about out-of-state boats being stored.

Here's what a private documentation company says about it:

FAQ: DOES A DOCUMENTED BOAT NEED TO BE REGISTERED IN FLORIDA?
Yes. A Documented vessel must be registered in Florida, if used on Florida waters for longer than 90 days. The registration number will be the official federal documentation number and a decal will also be issued. The decal must be affixed to a window or the windshield on the port side of the vessel. The registration will be issued in the name shown on the federal documentation papers. NOTE: Documented vessels do not display the FL registration number.

https://unitedstatesvessel.us/faq/do...ed-in-florida/

[dohenyboy]

If it is documented and you won't be settling in one place there is no need to register the vessel in any state.
The important issue is rather, where are you a resident? That state may require (but I doubt it) that you pay sales tax or make some filing.
I have never heard of a state requiring you to register a vessel just because your travel through the state took too much time.

[smj]

If in Florida for over 90 days I believe you are required to state register it in Fl.
If your not a resident of the state of Fl., didn’t buy the boat there and have owned your boat in a different state for over 6 months, then I don’t believe you will owe Fl use or sales tax. https://floridarevenue.com/forms_lib...t/gt800005.pdf