Association Forum - Sales Tax from State to State

Assn Members Area · Join

Home.

Association Forum

Ships Store

Cruising

Racing

Technical Tips

Photo Gallery - New

Boat Search - Updated

Manuals & Brochures

Swap Meet

Links

Officer Flag Line & Staff

Bylaws & Constitution

Members Area

Join the Association

Notice:
The advice given on this site is based upon individual or quoted experience, yours may differ.
The Officers, Staff and members of this site only provide information based upon the concept that anyone utilizing this information does so at their own risk and holds harmless all contributors to this site.

Association Forum

Username:	Password:
Save Password
Forgot your Password?

All Forums

Catalina/Capri 25/250 Sailor's Forums

General Sailing Forum

Sales Tax from State to State

New Topic

Topic Locked

Printer Friendly

Author

Topic

Page: of 2

Frank Hopper
Past Commodore

Members Avatar

Pitcairn Island
6776 Posts

Response Posted - 03/31/2007 : 13:17:56

Don't kid yourself Rick, your state is getting in your pocket somewhere. Different states just structure things differently.

Edited by - on

Champipple
Master Marine Consultant

Members Avatar

USA
6855 Posts

Response Posted - 03/31/2007 : 14:12:04

As a seller is there really any reason to risk perjury on a the notarized title or bill of sale to save the prospective buyer tax dollars.

As a buyer if you are trying to play the tax avoidance game you should probably just offer a few hundred less.

I do have a question for Steve - even if you structure the sale breaking everything out, isn't the buy technically supposed to pay use tax (in states where applicable?)

dw

Edited by - on

Steve Milby
Past Commodore

Members Avatar

USA
5904 Posts

Response Posted - 03/31/2007 : 15:53:26

<blockquote id="quote">quote:<hr height="1" noshade id="quote">As a seller is there really any reason to risk perjury on a the notarized title or bill of sale to save the prospective buyer tax dollars.<hr height="1" noshade id="quote"></blockquote id="quote">No reason at all. Also, buyers who under-report the sale price think it would be difficult for the state to prove fraud. The way the state does it is they send an investigator to talk to the seller. The investigator asks, "How much did John Doe pay you for your boat, and, before you answer that question remember that, if you lie to me, you're going to jail." The seller answers truthfully, of course, and the state subpoenas the buyer's bank records to corroborate the seller's testimony. The state lets the seller off easy because he cooperated, and they nail the buyer.

<blockquote id="quote">quote:<hr height="1" noshade id="quote">I do have a question for Steve - even if you structure the sale breaking everything out, isn't the buy[er] technically supposed to pay use tax (in states where applicable?)<hr height="1" noshade id="quote"></blockquote id="quote"> One thing you should understand about the use tax is that it's purpose is to plug loopholes in the sales tax laws. Therefore, only transactions that are taxable under the sales tax laws are taxable under the use tax laws.

Not all sales of every kind of property are taxable. For example, food that is sold for consumption off the premises is not generally subject to sales tax. In Ohio, and I believe in most states, casual (occasional, irregular) sales of tangible personal property are generally exempt from sales tax, except for sales of motor vehicles, boats and outboard motors that are required to be titled, snowmobiles, documented boats, all-purpose vehicles, off-highway motorcycles and personal watercraft. Thus, a sale between private people who are not regularly engaged in the business of retail sales (i.e., a "casual sale") is exempt from sales or use taxation, unless the property is a boat or one of the other items specifically listed above. Therefore, you can break out sails and other items separately, if the seller will agree to do so, and legally reduce your tax liability on the purchase of a boat, under both the sales tax laws and the use tax laws. But you can't assign exorbitant, unrealistic values to the used equipment. Also, as a seller, I would be reluctant to agree to such a transaction, because an unscrupulous buyer could manipulate the transaction in a way the seller didn't contemplate, and could cheat the seller.

Edited by - Steve Milby on 04/01/2007 08:00:36

existentialsailor
Master Marine Consultant

Members Avatar

USA
1180 Posts

Response Posted - 03/31/2007 : 16:32:38

<blockquote id="quote">quote:<hr height="1" noshade id="quote">Originally posted by fhopper@mac.com
 Don't kid yourself Rick, your state is getting in your pocket somewhere. Different states just structure things differently.
<hr height="1" noshade id="quote"></blockquote id="quote">

Hmm, maybe....

http://money.cnn.com/pf/features/lists/taxesbystate2005/index.html

Edited by - on

Jmurfy
Navigator

Members Avatar

USA
176 Posts

Response Posted - 03/31/2007 : 16:57:48

I purchased my C25 in Michigan from a broker representing a private seller and paid the sales tax in Illinois (where I live).

Edited by - on

Bill Sloane
1st Mate

Members Avatar

USA
91 Posts

Response Posted - 04/02/2007 : 14:14:30

Holy smokes. Such a lot of advice. Thank you, thank you, thank you.

It looks like that if I buy a boat in another state, which most likely will be California where boats appear to be a little cheaper than in Washington, I don't pay sales tax in California, but I do pay a 'use tax' in Washington when I register the boat. This is fine. I have been paying sales tax on so much so so long that I have been reduced into a Pavlovian tax paying stupor when ever I buy anything.

Thank you.

Bill Sloane
Suede Shoes
Olympia WA

Edited by - on

johnsonp
Admiral

Members Avatar

USA
606 Posts

Response Posted - 04/02/2007 : 19:09:47

Let's see.....next month I have to register my boat in Washington....
what shall I do?

Let's vote!

A $95,000 (fair market price) X .08 =
B $77,770 (what I paid) X .08 =
C $50,000 (senior discount due) X .08 =

paulj C250wk #719

Edited by - on

Champipple
Master Marine Consultant

Members Avatar

USA
6855 Posts

Response Posted - 04/02/2007 : 20:12:48

You might not have the option - If the title or bill of sale says 77770 it should be written on the transer docs.

Edited by - on

smythyll
Deckhand

Members Avatar

USA
21 Posts

Response Posted - 04/03/2007 : 23:17:05

Perhaps one should consider registering the vessel with the Coast Guard, thus eliminating the requirement for state/local registration? Of course, by doing this, one should naturally offer to pay the use tax to the state -- which I'm certain everyone does.

Edited by - on

Steve Milby
Past Commodore

Members Avatar

USA
5904 Posts

Response Posted - 04/04/2007 : 09:16:50

According to the Coast Guard Auxiliary, most states require that documented boats also be registered under state law.

Edited by - on

Dave Bristle
Master Marine Consultant

Members Avatar

Djibouti
10005 Posts

Response Posted - 04/04/2007 : 13:43:52

<blockquote id="quote">quote:<hr height="1" noshade id="quote">Originally posted by Steve Milby
 According to the Coast Guard Auxiliary, most states require that documented boats also be registered under state law.
<hr height="1" noshade id="quote"></blockquote id="quote">
Connecticut does, and any uncollected sales tax is due. But a boat must be net five tons, so our little Catalinas aren't candidates for documentation anyway.

Edited by - Dave Bristle on 04/04/2007 13:44:48

Champipple
Master Marine Consultant

Members Avatar

USA
6855 Posts

Response Posted - 04/04/2007 : 16:26:01

Actually Dave there are a few documented C-25's. Net tonnage has some whacked out formula. We are right on the borderline.

Documented boats require registration, but putting registration numbers on the bow is not a requirement

Edited by - on

HeelinPatrick
Navigator

Members Avatar

USA
102 Posts

Response Posted - 04/17/2009 : 07:12:01

Ok, so I'm digging up an old thread. After paying some serious sales tax here (7%), and my friends buying a Harmony 22 that is registered with the coast guard (and not having to pay sales tax in Nebraska), I'm thinking the CG is the way to go.

I looked it up, and the application fee was ~$150, and there is the 5 ton limit, but from previous posts, C25's can be registered with the CG. What I was hoping to learn, was what is entailed with the registration. Is it difficult to get it in the first place, or is there much hoop jumping for annual renewal? It's too late for me, but the tax benefits are too much to pass up again it looks, it's like the Roth IRA for boats!

Edited by - on

dlucier
Master Marine Consultant

Members Avatar

Virgin Islands (United Kingdom)
7583 Posts

Response Posted - 04/17/2009 : 09:10:17

It is my understanding that documenting a vessel only gets you out of having to apply for a state title, and that you'd still be required to comply with your particular state's requirements for registration, taxes, and other associated fees.

Edited by - on

HeelinPatrick
Navigator

Members Avatar

USA
102 Posts

Response Posted - 04/17/2009 : 11:30:50

In Nebraska, you don't have to register, if registered with CG, and therefore could avoid sales tax by not having a title. But if regstered with CG, then one would have probably had a title, and would need a title if sold. Hmmm, oh well. Thanks!

Edited by - on

Page: of 2

Topic

New Topic

Topic Locked

Printer Friendly

Jump To:

Association Forum

Notice: The advice given on this site is based upon individual or quoted experience, yours may differ.
The Officers, Staff and members of this site only provide information based upon the concept that anyone utilizing this information does so at their own risk and holds harmless all contributors to this site.