Best state to register a new-to-us boat

[SJAxtell]

Hello! We have just purchased a 53 foot Navigator that is located in Florida. We paid for the sales tax exemption sticker so that we could avoid paying sales tax in Florida. Since we will be living aboard, and selling our dirt home, we would like to register our new boat in the place that is the most cost-effective for us. We know that some states have low or no sales tax, and others don't have personal property taxes. The boat is currently registered with the Coast Guard. Any advice is appreciated! Thank you.

Steven and Janeen Axtell
Toes in the Water

[S/V Illusion]

Originally Posted by SJAxtell

Hello! We have just purchased a 53 foot Navigator that is located in Florida. We paid for the sales tax exemption sticker so that we could avoid paying sales tax in Florida. Since we will be living aboard, and selling our dirt home, we would like to register our new boat in the place that is the most cost-effective for us. We know that some states have low or no sales tax, and others don't have personal property taxes. The boat is currently registered with the Coast Guard. Any advice is appreciated! Thank you.

Steven and Janeen Axtell
Toes in the Water

Those of us who pay taxes would appreciate others carry their share of the load. Tax minimization is a good thing; tax avoidance isn’t….l

Pay tax where you live aboard.

[SJAxtell]

We won't be living in any ONE place, but will be cruising the Great Loop and the Bahamas. We must choose someplace to register the boat, so we are trying to decide what is best.

[slipaway]

Originally Posted by SJAxtell

Hello! We have just purchased a 53 foot Navigator that is located in Florida. We paid for the sales tax exemption sticker so that we could avoid paying sales tax in Florida. Since we will be living aboard, and selling our dirt home, we would like to register our new boat in the place that is the most cost-effective for us. We know that some states have low or no sales tax, and others don't have personal property taxes. The boat is currently registered with the Coast Guard. Any advice is appreciated! Thank you.

Steven and Janeen Axtell
Toes in the Water

More complicated than just picking a state bases on taxes. You need to determine where the vessel will spend most of its time- where its principal use will be. Since it is a documented vessel (not registered) you would then have to comply with any registration & taxation requirements for that state. For example, VA does not require documented vessels to be registered with the state but MD does. Some states have personal property taxes that would apply to any vessel principally used or homeported in that state regardless of documentation.

Most states have "reciprocity" laws that allow visitation without having to pay a new registration fee for a few weeks or even a few months, but if your boat essentially resides in another state, you should expect to have to register it in that state (if required for CG documented vessels). For instance, if you live in Pennsylvania, but keep your boat in Maryland and boat on the Chesapeake Bay, you can expect to pay a Maryland registration fee.

Keep in mind that "registration" and "documentation" are two different concepts. Documentation is a form of federal acknowledgement that the vessel is a US vessel and serves as proof of ownership- i.e. title. Registration is a state-by-state requirement and it generally linked to state taxation. Undocumented vessels generally have to be registered somewhere, documented vessels it depends on the state.

Of course, if you intend to cruise long term outside any state the analyses may be different.

[Jimbo2010]

One has little to do with the other.

Boat can be documented in RI a good idea, no tax

you can be domiciled in any other state.

Done all the time, not that I agree with it

[mvweebles]

Might help to look at the total tax liability issue, not just sales tax. For example, while Florida has a sales tax, there is no state income tax so even retirement income is non-taxed. Also a consideration is that many states require a boat to be registered in their state if you are there for more than 60-days (varies). So there are logistics considerations too. Given it's December, maybe spending the winter in/out of Florida makes sense to you.

Delaware and Rhode Island have no sales tax. Since Mass. Senator John Kerry was discovered to have his yacht register in Rhode Island, presumably to avoid taxes, RI registration has become a bit of a lightning rod when a RI boat visit another state which triggers the 60-day re-registration limit.

I'm not keen on paying taxes either, but I am practical. Could certainly expend a lot of time, money, effort, and brain cells trying to beat the system. Hopefully, you budgeted for sales tax and other ownership costs.

[MicHughV]

Both State registration and Documentation need to be renewed each year, which may cause you problems. I've always had an "agent" do mine, so might be good place to check.

[Jimbo2010]

I think USCG IS 5 YEARS

[Tsuru]

We live on the boarder of Washington and Oregons states. We register the boat in Oregon (a state without sales tax) because that is where the boat resides. We paid * “Use Tax” to the State of Washington. For those unfamiliar Use Tax is equal to sales tax to ensure the state gets its share.
Because of where we live I know several owners who attempted to avoid paying Washington State sales or use tax by completing the transaction in Oregon. In every case the Washington Tax Accessor caught up and collected the state tax.
I’d recommend registering the boat in your state of residence.

[slipaway]

Originally Posted by MicHughV

Both State registration and Documentation need to be renewed each year, which may cause you problems. I've always had an "agent" do mine, so might be good place to check.

Federal CG documentation can now be renewed for 5 years. But even with one year it can be done online in about 5 minutes through the USCG National Vessel Documentation Center website.

[slipaway]

Originally Posted by Tsuru

I’d recommend registering the boat in your state of residence.

Be cautious with this approach. If your state residence (domicile) is say Idaho but you principally use the vessel in another state that state may be looking for registration (even if CG documented). Principal use/presence for a period of time is usually the determining factor.

[Stu Jackson]

Originally Posted by SJAxtell

>>>>>>>>>>


The boat is currently registered with the Coast Guard. Any advice is appreciated!

Steven,


Congratulations on your new boat.


What address did you use for this ^^^^?


Reason I ask is years ago a fellow posted here wondering about a state's tax; he had his boat sailing worldwide and got a bill from a state because he used that in his documentation address even though he'd never been to that state but liked the sound of name of the harbor and the state on his transom! True story. Anyway, took him a long time to convince the state that his documented boat wasn't subject to their tax and had never been there.


It pays to be careful with this carp. I've been reading these tax stories for as long as I've been on this and other boating forums. The questions are repetitious and the answers are invariably helpful and consistent. You might want to read some more of these threads about this subject.


Good luck & safe journeys.

[Kettlewell]

FYI I have found that the RV forums have some of the best discussions of these issues, though of course marine documentation/registration adds its own wrinkles. https://www.rvnetwork.com/

IMHO it's best and easiest in the long run to choose one address for all of your major life needs: home address, phone, life insurance, health insurance, income taxes, boat registration (if required), etc. But, if you begin to keep your boat longer than 90 days (in many states, but it varies) in one state there is a strong likelihood that state will require the payment of some taxes and possibly a registration fee. OTOH, if you are on the move and rarely stay anywhere longer than 30 days, especially if you don't rent a dock space in a marina, it is unlikely any official will take notice of your boat. Some states do say something like you must register and pay taxes if you spend the majority of your boating year there, others say you owe taxes instantly if you are a resident of the state, still others give you 90 days, and then in some states things like property or excise taxes kick in if you are there on a certain date each year. It's complicated!

[S/V Illusion]

Originally Posted by SJAxtell

We won't be living in any ONE place, but will be cruising the Great Loop and the Bahamas. We must choose someplace to register the boat, so we are trying to decide what is best.

What does your driver’s license say? The address on your tax returns?

[SailingHarmonie]

Originally Posted by S/V Illusion

What does your driver’s license say? The address on your tax returns?

None of that matters in the least. So much misinformation, and this is a good example.

First, you do not have to register a boat in any state, unless you meet the requirements. Some states do not register boats that are USCG documented ever (like California).

No state really cares where YOU live, it is where the boat stays that matters. Many states have a 60 or 90 day requirement, If the BOAT statys in the state more than that length of time you need to register it THERE. It matter not where YOU live.

You need to check the rules of the state where the boat is, and follow them.

Having a state registration for you USCG documented vessel is NOT universally required, If the state where the boat is requires it, and each state has their own rules, then you have to register it there and pay the taxes due THERE. You generally do not get to choose which state you register your boat in.

Conceivably, you might have to register a boat two, three, or four times in different states in a year. Sorry if that is complicated, but that's the way it is.