Do NOT keep your boat in North Carolina

[Gadagirl]

Are you sure it is a "state" tax and not a county or a city/municipal tax? I only ask because here in Virginia we have yearly personal property taxes on cars, boats, RV, campers, planes etc. Some counties don't tax boats, others do, and the percentage that is charged also varies county to county. Maybe start your research at the local level for better answers.

Sorry to hear about your truobles. Any chance you have an initial suvey, or recent survey that you could use as a rebuttal to the assesment?

Also thanks for reminding us to research tax obligations when planning future home ports. It does get confusing. Please keep us informed of the outcome.

[sailorchic34]

Don't forget to file a homestead exemption if it's your only home. That will knock down the tax a bit.

[missourisailor]

Originally Posted by jcb47769

We just had an unpleasant surprise. I work abroad on boats for a living, and when I'm away working I keep my boat in New Bern, NC. Cheap marinas and fairly protected. Just got a notice from the State of NC, they decided my boat is worth 100k (laughable, it's a beat up cruiser we bought for a quarter of that), and i need to pay 5% property tax on that value immediately plus late fees, and the same amount every year. Burden of proof is on me to show the boat is worth less than they arbitrarily decided, and the tax adds up to more than our slip fee by a good margin. Apparently the marinas here send the tax office everyone's information? So now I pay 5k/year on a boat worth maybe 25k? Anyone else have experience with this?

Golly gee williker's Wally..... You need to move your boat to Oriental NC.
Only 45 min from New Bern and an IP-35 is only $250 in taxes!

[jcb47769]

Originally Posted by missourisailor

Golly gee williker's Wally..... You need to move your boat to Oriental NC.
Only 45 min from New Bern and an IP-35 is only $250 in taxes!

-Is that for liveaboard though? We paid a similar amount in CA, but since I've been living and working on boats away for a year I can't argue that the boat is our home even though we literally don't own anything else.

Thanks for all the tips folks - I don't know that it's going to help us but maybe it will help the next guy. We bought the boat 10 years ago for $26k, but I don't have copies of the bill of sale (it was a long rough passage through the Canal from CA, lost some things). I suppose I could pay for a survey (around $500) to say it's worth less money. Also we've chatted to the tax assessor's office. Some snippets from the conversation:

"Well honey if we had put $20k on the bill instead of $100k, you wouldn't have called us"
-Yes we would because we don't want a tax lien on the boat

"We'll just ask the marina office what they think the boat is worth"
-The marina office said they won't do that of course

"I'm surprised the marina people didn't tell you about this"
-Are you kidding me? NOBODY WOULD EVER STORE A BOAT HERE.

Marina office said "Oh sure, people call us all the time in an uproar when they get these tax bills" not particularly interested. Not his job, I understand, but since it's more than the slip fee it's a shame there's no information readily available.

I understand the need to pay taxes, but 5% of the value every year is really a lot of money for us, especially since the value has been arbitrarily set at 400% of the actual worth of the boat and doesn't appear to be negotiable.

[FlyingScot]

This topic interests me as I have considered New Bern as a home to my future boat until I can transition onboard full time. I have rental property in NC so I pay NC state inccome tax already and have a reason to visit the state.

The retail sale of a boat is subject to the 3.00% State rate of sales and use tax with a maximum tax of $1,500 per article. Boats are not subject to the local and transit rates of sales and use tax. In the instance where sales tax has not been paid on the purchase of a boat, a use tax at the 3.00% State rate with a maximum tax of $1,500 per article applies to a boat purchased or received from within or without this State for storage, use, or consumption in this State.

For a business or person who is not registered with the Department and is required to collect and remit sales and use tax on retail sales of boats, register online using the online business registration portal. Gross receipts derived from the retail sale of a boat and the sales and use tax thereon are to be reported to the Department on Form E-500, Sales and Use Tax Return, or through the Department’s online filing and payment system.

For a business or person who is not registered with the Department and is required to remit use tax on a boat purchased or received from within or without this State for storage, use, or consumption in this State on which sales tax has not been paid, the business or person must file Form E-555, Boat and Aircraft Use Tax Return.

Boats

Also looks like they have a 25k exemption for upgrades to avoid sales tax on the work/parts. http://www.dor.state.nc.us/taxes/sal...ndaircraft.pdf

I'm not a tax attorney, so don't trust my interpretation.

[rwidman]

Since you are in a marina, it would seem pretty simple to talk with some of your slip neighbors and see what taxes they are paying.

[SecondBase]

Originally Posted by rwidman

It's not really a "profit". Tax proceeds go to pay for things like fire and police protection, roads, etc.

+1

You and your crew are using their roads.

If there's a fire a few slips down on your dock you'll be real glad the New Bern FD has gas in their truck. If there's not a fire on your dock you'll want to thank the fire inspector who pointed out A B and C to the marina last year preventing the fire. Normal for Cruisers to be unaware of that background work. I hope you go to their FD pancake breakfast or whatever as well.

If there's a hurricane, and your sig other takes medication, you're going to want an effort like the response we've seen to Harvey which means paying people at 911 even when you aren't using it regularly.

[lancelot9898]

Originally Posted by sailorchic34

Don't forget to file a homestead exemption if it's your only home. That will knock down the tax a bit.

Can you tell me more detail about this homestead exemption? I know that CA will have different requirements than other locations, but knowing how others are doing this might be informative. That is exactly the question I proposed on another thread about relief from personal property taxes if your boat is your home. Thanks for any detail.

[SecondBase]

Originally Posted by rwidman

Since you are in a marina, it would seem pretty simple to talk with some of your slip neighbors and see what taxes they are paying.

And head over to the coffee shop atop Oriental harbor. No better place on the ICW to ask a cruising question in person.

[puffcard]

Get a copy of a BUC book, like the NADA for boats use that as a starting point for the value of your boat. Something is not adding up, personel property taxes in rural NC are some of the cheapest. Also its not a state tax.

[Captain Bill]

5% seems awfully high. I had my boat in New Bern 11 years ago and I paid about $2000 a year on a boat valued at $200,000. The millage rate was applied directly t the appraised value of the boat, not to a percentage of the appraised value. I was at the Bridge Point Marina, which I had specifically chosen because it was outside the city limits. During the year the city managed to annex the marina without telling any of the boat owners and surprised us with a city tax bill as well as the county tax bill I was expecting. The county tax was $960 and the city tax was $1040. When I called the city to question the tax bill since I still didn't know about the annexation I asked the tax collector why we had not been notified about the annexation. She said we were not property owners! I said if we are not property owners, why are we paying property taxes? She did not see the point.
I immediately moved my boat out of both the city and county to a rural marina with much lower taxes and slip fees. Laws in NC probably have changed a lot in 10 years, but 5% does not seem reasonable.

[GoingWalkabout]

Originally Posted by rwidman

It's not really a "profit". Tax proceeds go to pay for things like fire and police protection, roads, etc.

I don't mean to be rude but have you seen the unfunded pension liabilities in most States and Counties? These money hungry bodies have been spending like there is no tomorrow while paying the State and local union employees outrageous money and pensions. I say outrageous since they are far and above on a whole to what is paid in the private sector.

So what now have is the beast (State and Local Governments) who unsound financially going after everything moves or doesn't move to tax it. Last thing I heard is California is looking into having a new tax on drinking water. Better watch out. They may then turnaround and put a huge sales tax on water makers since those little gizmos are taking away from the State tax revenue on drinking water.

Be afraid. Be very afraid. The greed and following theft by the State is all pervasive.

Now on a lighter note. It is another good reason to have a boat. Portable asset that you can pick up and move wherever you want. Just be careful of the rules these greedy monsters make to take your money from you.

[jcb47769]

Originally Posted by lancelot9898

Can you tell me more detail about this homestead exemption? I know that CA will have different requirements than other locations, but knowing how others are doing this might be informative. That is exactly the question I proposed on another thread about relief from personal property taxes if your boat is your home. Thanks for any detail.

In San Diego we had to prove we lived aboard by showing we paid "liveaboard" fee to the marina and the tax was $260/year. For NC I'm unclear if this is a state tax or local, i just have a letter from Craven County Tax assessor with the insanely high boat value and instructions to pay 5% annually as a property tax. Maybe a County tax? I wonder if we also have to pay another 3% use tax as well if that's a state law. So 8k a year now? I guess we will worry about that after we figure this out. I stand by my original post that this is a terrible place to store a boat.

Nobody we spoke to in the marina had gotten a similar bill, lucky us. We aren't living aboard though so our social circle is small. I think they don't leave their boats here year around, at least the people I've talked to.

[missourisailor]

Originally Posted by jcb47769

-Is that for liveaboard though?

No liveaboard's allowed at marine. But boat is there year round.
A conversation with the dock master revealed that $250 is in line with what others have reported.

FWIW, Oriental is in Pamlico country, which I've been told is one of the poorest counties in NC..

[Dockhead]

Originally Posted by jcb47769

I appreciate that we should have "done our homework", although even now I'm having trouble finding this law spelled out clearly. We paid our taxes in .CA on the same boat, and it was around $200/year in San Diego. If someone else is out there doing homework, here's what happened to us. Hope others can learn from our mistakes.

I, for one, do not blame you, either for not figuring it out earlier, or for objecting to such a tax.

Now you'll want to shop for a more reasonable jurisdiction.

I can recommend the UK - zero, zilch, nada tax on boats (other than VAT on the initial purpose by the first buyer), not even any requirement to register the boat. Practically no restrictions on liveaboards. Year round sailing.