Southern Ca VS North Carolina

[TacomaSailor]

Deluxe68 said:
"I already have a written letter from the California board of equalization stating that as a non resident of California I would not have to pay use tax if the boat is used outside of the state for one year."

That statement is wrong on many accounts. California residency has nothing what so ever to do with your liability for USE tax. Read the regulations, the FAQs on the BoE site answer that very question.

We are currently trying to purchase a boat outside California and are working with a California tax attorney on this very issue.

That statement is correct ONLY IF you can prove you paid a sales tax in another state. I know for a fact, 100% certain, having gone thru two episodes with the BoE on this issue. If you cannot prove you already paid the tax somewhere else you will pay it to California.

I got my first San Diego county tax bill for our Caliber 40 (property - NOT sales/use) in May 2011 just seven months after arriving in San Diego from Seattle. At that time we owned property in Washington State, my wife worked full time in Washington, our cars were registered there, and we voted in Washington. We were Washington Residents - No doubt about it.

When I paid the first 1.18% property tax bill I also had to give the San Diego assessor a copy of my Washington State sales tax receipt. I protested that I had paid Washington State in February 1995 and did not have the receipt. We had used the boat in Washington State and Mexico 1995 thru 2010.

BoE then asked for a copy of my Washington State registration which I could not provide because the boat is USCG documented. The SD assessor then said pay Califronia USE/Sales tax on the boat purchase or provide the receipt for the sales tax paid to Washington. Eventually I found the receipt and avoided the California BoE use tax on a boat I had owned for and operated outside California for 15-years.

Same thing happened to my brother - bought a boat in Washington, spent 3-months in California on the way to Mexico and was hit with a California use tax bill because he did not pay any tax in Washington. He ignored the BoE demand and three years later was unable to close on a Florida home purchase because BoE had filed a lien on his bank account, a lien that was to be enforced anywhere in the US.

California tax authorities are very aggressive and will get the money they want. California tax law works on the assumption you OWE the TAX unless you can prove you don't.

Be very, very careful when making decisions about your boat, your life, and California taxes.

[Revenue Cutter]

Originally Posted by Captain Bill

I'm not sure what you mean by tax free in NC. . . . . There is personal property tax every year on your boat which is the same rate The republicans took over the state and they never met a user fee they didn't like. They make the democrats look down right frugal. They won't call them taxes but that's what they are. . . .

While this is the season for it, I'd be mindful of using political party labels as a source of "insight" as to what politicians do or say they will do. I live in a land of absolutely no republicans and we suffer more, and more expensive, government intrusion than NC. There is a reason California has the highest rate of poverty of any state in the union. And, with our vast resources (natural and otherwise) politicians have to work really hard to attain that dubious distinction (the Sacramento Bee says Los Angeles and Napa Counties are the highest at over 25% living below the "poverty level").

Last Sunday's Marin Independent Journal newspaper reports retirement pay for that little county's special government districts for 2014 as: Southern Marin Fire Chief, $374,456; Sonoma-Marin Rail Transit Chief, $352,26 (on top of a $168,000 pension as county public works director); Novato town fire chief, $370,145; Novato deputy fire chief, $340,874; and, Central Marin Sanitary Dist. Mgr., $333,590. The surrounding districts were even more expensive (topping out at $1,068,348 for the retired administrator of a Fremont healthcare system) and these exorbitant costs all have to be paid by someone, i.e., California taxpayers. In short, unless you are super wealthy; satisfied with being at the bottom of the economic spectrum; or, a member of the ruling political class, I'd recommend staying the hell out of California. While its definitely a pretty place and great weather, otherwise, coming here to California is like moving to Detroit! Why?

The core thing to be concerned about re: taxes is that taxes on a boat are not like taxes on real estate. Back in the 1980's (when the republicans were in charge) the statewide Jarvis-Gann Initiative (Proposition 13) was passed by the voters which put permanent limits on the amount that could be charged for property taxes. As personal property, boats enjoy no such legislative protection against runaway government expense and overreach.

As for sailing, while it nearly costs me a year of college, I had a job of ferrying boats up and down the ICW (the best job I've ever had). Having owned and sailed a Pearson 365 for over a quarter century on the San Francisco Bay, I can attest that once you've learned the area, there is far more to do and see on the east coast. This is especially true when you reach that age of trading the adrenalin rush from getting pounded to hell outside the Golden Gate Bridge for the comfortable sailing without having to worry about kids falling overboard or tossed from their bunks.

[Cadence]

Originally Posted by deluxe68

A I have previously posted, I contacted three different marinas in San Diego and Ventura, they all have slips.

I guess I missed that. At what price compared to NC? Your boat is not going to fit into your travel bag, the TSA will get you. As I said just food for thought. If you are hell bent for election to go to the West Coasts look a deck cargo. In my humble opinion, Unless you have very deep pockets sell her and buy on the west cost.

[Sailor Jer]

Originally Posted by TacomaSailor

We moved our boat to San Diego from Puget Sound 5-years ago and have lived aboard in San Diego for 2.5 years. Here are some realities of life in SoCal

- Income Tax
California will tax you on everything you earn (pension, investments, earned income) no matter where you earn it. My wife receives a nice pension from 32-years work for a large city in Washington. She never worked a day in California but pays tax on her Washington Pension. If you live in California less than 6-months a year the taxable base is prorated otherwise you pay for all your income. You pay approximately 2.5% on the first $58,000 and 6% on the next $22,000 and 8% on the next $21,000.

- Personal Property Tax
San Diego County is 1.18% of the boat’s value. You pay this even if you are not a resident. When we still kept a home in Washington we paid property tax to San Diego

- Sales Tax
8.75% in San Diego on everything you buy

- Use Tax
You pay about 8.25% sales tax on your boat when you bring it into San Diego unless you can prove (receipt from another tax authority) you paid sales tax (called use tax in CA) to another state

- Almost no mooring balls available for liveaboard usage

- Slip Fee
We pay $770 per month for a 40’ slip

- Liveaboard Fee
We pay an ADDITIONAL $250 per month for the privilege of living on our boat. Most marinas are limited by Coastal Commission rules that limit the number of liveaboards to 10% of the total number of slips

- Very expensive cost of living
Gasoline in San Diego is consistently $0.85 more than anywhere else in the country. Food prices are 10% - 20% more than in Washington State. Restaurants and bars are often tourist prices (unless you know the locals). Apartment rents are exorbitant.

- Expensive utilities
Our marina charges $10 per month to connect to shore power and $0.25 KwH for the electricity. Our bill runs about $85/month Dec - June when we have to run an electric heater when the outside temp drops below 55, which is about 20-nights a month.

- Very expensive boat mechanics
The average low cost mechanic rate is $60/hour and most yards charge $90/hour

- Very strict environmental rules
Almost no useful bottom paint is allowed. You can’t sand over the water. You have to do a super tarp job to work on the boat in a yard…etc

- Very limited “Cruising” and almost no anchorage are available
Almost all sailing you do, outside San Diego Bay, is in the Pacific Ocean with it's swell, wind, fog, big ships, navy ships, fishing boats. There are NO casual anchorages along the California coast from Pt Conception to the Mexican border.

San Diego bay does not allow overnight anchoring without a permit and only 3-days in a month with a permit. Some anchorages only allow anchoring on weekends.

Mission Bay anchorage is only 4-miles North from our slip on Harbor Island- but you have to go 7-miles SSW to clear Pt Loma which makes it a 14-mile trip, six of it in the ocean. There is very limited anchorage room there and a tightly enforced 3-day limit.

Oceanside is the next stopping place going north and is 36NM NW from Pt Loma. There is NO anchorage in Oceanside.

Dana Point is 22 miles up the coast from Oceanside and Newport is another 13 miles up the coast from Dana Pt. There may be some short term anchorage space in each of those harbors.

Catalina Island is 68 to 75 NM WNW across open Pacific Ocean water from Pt Loma, depending on which anchorage you pick on Catalina. There are some “free” anchorages on the island but are quite removed from anyplace to go ashore. Mooring balls are very expensive and often all reserved.

Ensenada is the first stop going south from San Diego and is about 66 NM. But, you need a lot of paperwork to go there and it will cost you $25 or more dollars. And, you and everyone on board need a US Passport. Returning to the US will cost you $27 when you check in at the Shelter Island customs dock. There are no anchorage near Ensenada.

The Coronado Islands are just 18NM south of our slip and used to be a nice day sail or even overnight destination because they have good fishing and diving. But, now you need a Visa and cruising permit to visit the island. You need the cruising permit ANYTIME you sail south of the border, even if you have no plans to touch shore. Oh, and an expensive fishing license if you have any fishing tackle on board. And, that fishing license must be held by every one of your guest. Boat Forfeiture is the penalty.

- The more isolated and exotic island destinations west of Santa Barbara can be a challenge
The anchorages are deep and exposed to many of the winds. The winds in the northern and western islands can really howl for days at a time. The islands are spectacular and very enjoyable for an experienced cruiser

- Every US cruising destination is upwind-upswell
The wind blows from the WNW to NNW about 325 days a year and the swell from the NW is almost always 3’ to 5’ at 10 to 12 seconds. So, any cruise is always into the wind and swell.

- Perfect weather in San Diego
It is never hot nor cold. The wind blows 10 – 20 knots in San Diego Bay almost every afternoon from 1 PM till sunset. You can sail 7NM from Shelter or Harbor Island (location of most of the marinas) to SD1 (the entrance buoy out in the Pacific) and then turn around and sail 12NM to the South Bay and back to your home slip and get about 30 NM of good sailing that varies from biggish ocean swells to 12’ calm water in the South Bay.

We love San Diego liveaboard life and have no plans to leave. But, we do pay a significant 'sunshine tax' for the joy of living here.

Wow, great job explaining it there...Great info!!!

im a Californian who transplanted to Atlantic to buy/learn boating.

I've lived ashore in S.D. county, Orange county, L.A. county, Ventura County, Monterey County, San Francisco County and Marin County all coastal as my attitude is 'if I'm in Cali and not on the shore Ill be back on the continental divide..."
I as well was a soldier from Ft Lewis (Tacoma) and can say living on a boat in Puget sound doesn't appeal at all.

fortunately I was lucky and local left coast/best coast friends told me to go to the Atlantic, either Hampton roads or Florida area and try boat life there initially as its more forgiving they said than the mighty pacific, plus 1000 miles of coastline Florida makes it way boater friendly, I couldn't imagine how living aboard the various trimarans I wanted to buy (morro bay/Marin county/san Pedro/SD Bay) would've turned out in California as I now know how much more expensive, less cruising destinations/sailing options as well as difficult west coast anchoring/going ashore/pacific coast boating is in comparison to east coast?

Id say to OP asking left coast/right coast is just cruise your boat south from where you are N.E. & go to NC on the way to Florida for next winter and beyond...Big nice Swan you're doing it right...

[rwidman]

Originally Posted by pwmullins

In SC the maximum sales tax is $300.00 and the property tax for out of Charleston County is 6%/yr based on current value of boat. IF boat stays in SC for over 180 days/ yr, then you get charged property tax. Charleston is an excellent harbor with no restriction on mast height if you are coming from offshore. 3 marinas in main harbor, Charleston City Marina, Charleston Harbor Marina and one other, I forgot name. Good jumping off spot for Chesapeade and New England going north and Florida and the Bahamas going south.

Maritime Center and Ashley Marina if you have less than a 55' air draft.

The 6% is multiplied by the county "millage rate" which is a fraction so the actual tax is less than 6% of the boat's value. And the value goes down each year.

[rwidman]

Both Annapolis, MD and Oriental, NC are full of sailboats so the sailing can't be that bad.

MD is not a good place if taxes bother you. Someone has to pay for all those welfare checks and government mismanagement.

[TacomaSailor]

Kia Ora said:
"That's a lot of cruising options"
Yes - San Diego is a great spot for sailing and the islands are nice but it is very limited cruising compared to what I consider two of the premier cruising grounds in the world.

It seems very limited after spending 10-years in the Pacific NW where there are hundreds of islands, dozens of small towns, and thousands of anchorages. It is never more than 5 NM from one spot to the next and 175 miles from the south end of Puget Sound to the north end of Nanaimo.

Or - cruising in the Sea of Cortez where there are hundreds of islands and an anchorage every 10-miles or so.

[Revenue Cutter]

Originally Posted by TacomaSailor; said: [I

". . . California tax authorities are very aggressive and will get the money they want. California tax law works on the assumption you OWE the TAX unless you can prove you don't.

Be very, very careful when making decisions about your boat, your life, and California taxes."[/I]

TacomaSailor: I could not agree with you more - CA tax authorities are very aggressive and they get what they want!

Having weathered several years of simultaneous audits by the IRS and the California Franchise Tax Board, the state audits were far more aggressive and less in tune with the realities of the concerns of a successful business operation than were the Feds.

Viewed from another perspective, as a corporate trial lawyer, I routinely handled extraordinarily high value cases, i.e., cases I could never have afforded to pay off if I screwed them up. For the protection of my clients and family, I also maintained correspondingly high malpractice insurance limits. This mandated drastically high malpractice insurance premiums. Eventually, I had to meet with my malpractice insurers to see what could be done to obtain lower premiums.

By staying clear of two areas of law, I was able to negotiate a significantly lower premium. Those two areas of law were: "Divorces" and "Tax Planning".

Based on their actuarial track record, it was clear the legal malpractice insurance industry wanted nothing to do with someone in the business of predicting what the taxing entities (particularly the California Franchise Tax Board) was going to do or not do.

If you look at the numbers (not the "Obama numbers" but the real numbers) California clearly has no alternative but to impose even greater taxation on its citizens. Combining this factor with the out-of-control deficit spending at the federal level (by both political parties), and I'd be reluctant to premise my economic future on the fiscal responsibility of these governments. We all know that desperate people (and governments) do desperate things!

[deluxe68]

Wow. This thread really went off the rails. Now we are examining tax codes, retirement pays, and bashing Obama.

[markpierce]

Originally Posted by Revenue Cutter

...

The core thing to be concerned about re: taxes is that taxes on a boat are not like taxes on real estate. Back in the 1980's (when the republicans were in charge) the statewide Jarvis-Gann Initiative (Proposition 13) was passed by the voters which put permanent limits on the amount that could be charged for property taxes. As personal property, boats enjoy no such legislative protection against runaway government expense and overreach. ...

The annual personal property tax rates for boats are the same as for real estate: between 1 and 1.5 or so percent depending on the county and special districts for specific location. (If I moved my boat to my county of residence, the property tax would increase 40 percent.) The assessed taxes increase 1% a year for real estate (assuming no deflation to a value below assessed value) but are reduced on boats where the value depreciates.

[JPA Cate]

Originally Posted by deluxe68

Wow. This thread really went off the rails. Now we are examining tax codes, retirement pays, and bashing Obama.

Should you choose So. Cal., for its light airs and easy climate, you will also be paying a lot of "sun tax". It is part of the package, and why people have made you think they're not answering the original question.

IMO, I think the benignity of the So Cal climate south of LA is against your becoming comfortable in the ocean. What you'll do is learn to be comfy in so little air that you will feel frightened at 25 knots, and that will not stand you in good stead if you want to cruise the whole world. Imho, if you get to where you are not frightened at 45, you'll by then have the confidence to handle most of what an in season circumnavigation would hand you, maybe griping at the fatiguing nature of it, but without fear for your well being.

If your situation is that you want to liveaboard, no reason to not give the east coast a go. Lotsa sailors there. Way more sailing destinations. Trust me, you really do learn as you go, as long as you keep your mind open to it.

If you're going to live in AZ, and only visit the boat from time to time, and you can contentedly work out the logistics for moving it to So Cal, of course that is more convenient flights wise. To me, the 20,000k or so to have it delivered by truck, well it would pay for a nicer grade of champagne on the east coast. But if you have to live in AZ for a while, then it's a different deal. Your choice. You can learn competency in So Cal, but you'll have to push the local's envelope to do so.

Finally, be aware, you will be required to re-register the boat in another State, and show them that registration before they will take your cash cow for them off their tax rolls. And they will put a lien against you if you don't.
PLEASE HEED THIS WARNING!

[Comix Bay]

Originally Posted by rockDAWG

I prefer East coast sailing. You can sail up and down east coast without problems; you don't need to sail to UK to get to NYC.

In West coast you can only sail south and no ICW to duck in. In east coast we have the whole Caribbean island chain just a short hop from Florida. From SD, French Polynesia is 3000 nm away......

Whoa now, they could sail NORTH also, what's it called up there ALASKA. And then there is all of the BC coast to sail also....................

Ted
Comox, BC

[Cadence]

Originally Posted by Comix Bay

Whoa now, they could sail NORTH also, what's it called up there ALASKA. And then there is all of the BC coast to sail also....................

Ted
Comox, BC

Ted, that was not worth a response. It was,

[TacomaSailor]

Originally Posted by deluxe68

Wow. This thread really went off the rails. Now we are examining tax codes, retirement pays, and bashing Obama.

Your original post made the somewhat hard to understand statment:
"We have still not decided east coast vs west coast. We bought the boat at its current home (Rhode Island) and after a year the only two tax free (warm) options seem to be North Carolina or Southern California. We have very little blue water experience so we want to do shorter cruising at first. The marina prices in NC are half of what they would be in San Diego "

Then you said: "I already have a written letter from the California board of equalization stating that as a non resident of California I would not have to pay use tax if the boat is used outside of the state for one year."

Those of us experienced with boats/taxes/California just wanted to warn you that you were probably quite misinformed about California taxes and you could be in for a terrible shock after moving the boat here.

And, you seemed unaware of California's unitary tax idea. If you live in California, even as a non-resident, you owe income tax on any income earned anywhere. Your "tax free" statement made it seem you did not understand the issue.

Would it be better to let a CF member blunder into the great tax state of California without warning?

You also mentioned "shorter cruising" and a lack of "blue water experience" so some of us felt you should understand there is little "short cruising" in SoCal and it almost always includes a trip into the Pacific Ocean.

Did you not want clarification about SoCal cruising?

[thomm225]

Originally Posted by Stu Jackson

He simply disagreed with your claims in that other post. This was really unnecessary. Besides, Jim has sailed a LOT more than you have, and maybe ever will. Credibility has its virtues.

The reason you are posting this is the same reason Jim has been feuding with me for years.

You were both incorrect on a technical aspect of sailing that I pointed out and neither of you could deal with it.

I'm a sailboat racer. I know how to make a sailboat do things with sails alone even without water flow of the rudder or an engine (or in a no rudder scenario) that many cruisers don't because they don't need to.

I give cruisers credit for teaching me tons of stuff about all the very different aspects of cruising compared to racing, but some that have sailed 10's of thousands of miles don't seem to be able to handle being wrong on sailing skills.

As an analogy, long distance truck drivers and race car drivers have different skill sets. Think about it.

Tom