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Old 08-04-2019, 06:12 PM   #1
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Tax implications of WA resident keeping boat in OR?

My wife and I are currently shopping for a trawler or tug to keep on the Columbia. We live on the Vancouver side of the Columbia but it looks like 95% of the marinas and slips are on the OR side of the river.

I expect there are many Vancouverites who have boats in Portland marinas. I'm just wondering what the legal and practical tax implications are if we buy a boat, register it in OR and keep it in an OR marina. WA has a hefty 8.2% sales tax and OR has no sales tax so for the average yacht I expect the tax savings would reach 5 figures. My parents still live in Portland so I do have an OR address to use if necessary.

Am I missing anything here? Is this common?
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Old 08-04-2019, 06:37 PM   #2
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If necessary put the boat in your parents name. Your residency is usually determined by where you vote. Everything is on computer, so no hiding where you live.
I don't know WA laws, but some states allow you to bring in a boat or vehicle if you owned it out of state (for some period of time or mileage) without paying sales tax.



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Old 08-04-2019, 06:42 PM   #3
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I'm not really trying to cheat on taxes so not inclined to go that far. Just wondering what the actual and practical rules are. We would not actually owe WA taxes on a house that we owned in OR. I'm wondering what would happen with a boat that is registered in OR and stays in OR.

We probably do enough property tax evasion by all the shopping we do on the OR side at Ikea and Home Depot and all the other stores over there. But if it is perfectly legal to own a boat in OR and not pay WA taxes then that is something I'll consider.

EDIT: I guess regardless of the tax implications of keeping the boat in Portland, I think, as WA residents, we would for certain owe taxes the minute we brought it up to Puget Sound for cruising. So there is probably no way around it and no point in trying to game the system if we plan on using the boat in WA each summer.

I'm still figuring out the implications of this. The WA Dept. of revenue web site has a LOT of detailed exceptions for non-residents who bring their boats to WA but no information for WA residents who own boats in OR.
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Old 08-04-2019, 07:21 PM   #4
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Boaters have kept boats in Oregon as a second home, license it in Oregon.

I believe that you can cruise Washington for six months without paying the sales tax.

If the boat is registered in Oregon, Washington would not have that info.

The way boat owners got into trouble with the tax in the past is registering the boat out of state but mooring the boat in Washington. Other boaters will turn you in, there was a hotline a while back where Washington State paid for information about tax scofflaws. Additionally, municipal marinas will turn you in. And I've seen police boats cruising marinas checking for current sticker and out of state registered boats.
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Old 08-04-2019, 07:31 PM   #5
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WA state has a current enforcement emphasis on tracking down those residents that are not registering vehicles in WA. Lots of folks have cars that are registered in OR, yet they live in WA.

In your case, there is nothing wrong with owning and keeping the boat in OR. In fact, OR would require that you register the boat in OR since that is where you keep it. As was mentioned, there is a given time frame beyond which WA will want you to register in WA. I believe that is 90 days. So unless you are cruising in WA for 90 consecutive days, you donít need to worry about it. Double check with WA and find out how long anyone can bring a boat into WA without registering it here.
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Old 08-04-2019, 07:33 PM   #6
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Boaters have kept boats in Oregon as a second home, license it in Oregon.

I believe that you can cruise Washington for six months without paying the sales tax.

If the boat is registered in Oregon, Washington would not have that info.

The way boat owners got into trouble with the tax in the past is registering the boat out of state but mooring the boat in Washington. Other boaters will turn you in, there was a hotline a while back where Washington State paid for information about tax scofflaws. Additionally, municipal marinas will turn you in. And I've seen police boats cruising marinas checking for current sticker and out of state registered boats.
My reading of the WA tax exemption for out-of-state boats crusing in WA waters is that it ONLY applies to non-residents. At least the the way the law is worded is that it specifies non-residents. So if you are a WA resident and bring a boat from OR to sail in Puget Sound you will owe taxes from day 1. Maybe I am mis-reading this. Perhaps there are lots of WA residents who do it and don't get caught. I'm just trying to understand what the law actually says, not what a lot of WA residents manage to get away with without getting caught.

Trying to imagine what I would say if I happened to get boarded or pulled over in WA with a WA drivers license and a boat registered in my name with OR registration. Don't imagine they would be very sympathetic, nor would I in their shoes.
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Old 08-04-2019, 07:53 PM   #7
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As a WA resident you owe tax from the first day you bring it into WA. Anchoring on the WA side of the Columbia will do it.
If you move to WA and bring your old boat or RV the use tax is due too. Don’t forget the yearly property taxes on vehicles.
Oregon registration fees are lower, no personal property taxes but you pay 10% income tax. But Salem is working hard on a sales tax. The call it a gross revenue tax for businesses. Guess who will be paying that tax.
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Old 08-04-2019, 08:06 PM   #8
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As a WA resident you owe tax from the first day you bring it into WA. Anchoring on the WA side of the Columbia will do it.
If you move to WA and bring your old boat or RV the use tax is due too. Don’t forget the yearly property taxes on vehicles.
Oregon registration fees are lower, no personal property taxes but you pay 10% income tax. But Salem is working hard on a sales tax. The call it a gross revenue tax for businesses. Guess who will be paying that tax.
That's what I thought. Thanks.

My neighborhood in Camas is full of people driving around with OR plates who I'm pretty sure are just evading WA taxes on their cars. Sounds like the same exact thing applies to boats. Since part of the reason for buying a boat is to use it in Puget Sound and the San Juans it sounds like there are no advantages to be had by keeping the boat on the OR side of the river.
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Old 08-04-2019, 08:20 PM   #9
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About two years ago I called the state for this exact reason. Here is what the state tax agency told me. As a Washington residence if I was to even use it on the Columbia I would owe Washington taxes on it as a residence. I was moving to Oregon in just a few months so I had the boat moorage off the Willamette, never used it on the Columbia. Waited until I moved and then started using it.

If you have no intention of moving to Oregon. Moore the boat wherever and pay Washington the use tax you owe them. Use the boat a lot!
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Old 08-04-2019, 08:26 PM   #10
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There is another way to reduce your Washington State sales tax on a boat or RV

Washington considers the hull and machinery as a motor vehicle or vessel. That would be the engine and running gear, generator, wiring, plumbing etc.

Everything else on the boat or RV is considered personal property and not subject to a vehicle excise or sales tax. Bedding, curtains, kitchen accessories, books, charts, coffeemakers, anchor and chain, lines, fenders, furniture, spare parts, electronics, canvas, enclosures, window covers etc. are considered personal property.

When purchasing a boat, obtain two receipts. One for the hull and machinery. And the other for personal property. Compile a detailed itemized list of the personal property included in the sale with current value of the items. The value of the personal items need to be realistic. I try to use eBay prices as fair current value. Do not use current retail prices even for fairly new items.

Out of the dozen or so clients that consulted with me on this process, only one received an inquiry from Washington State Dept. of Revenue. And when the itemized list of personal property was presented to them, we prevailed.
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Old 08-04-2019, 08:40 PM   #11
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There is another way to reduce your Washington State sales tax on a boat or RV

Washington considers the hull and machinery as a motor vehicle or vessel. That would be the engine and running gear, generator, wiring, plumbing etc.

Everything else on the boat or RV is considered personal property and not subject to a vehicle excise or sales tax. Bedding, curtains, kitchen accessories, books, charts, coffeemakers, anchor and chain, lines, fenders, furniture, spare parts, electronics, canvas, enclosures, window covers etc. are considered personal property.

When purchasing a boat, obtain two receipts. One for the hull and machinery. And the other for personal property. Compile a detailed itemized list of the personal property included in the sale with current value of the items. The value of the personal items need to be realistic. I try to use eBay prices as fair current value. Do not use current retail prices even for fairly new items.

Out of the dozen or so clients that consulted with me on this process, only one received an inquiry from Washington State Dept. of Revenue. And when the itemized list of personal property was presented to them, we prevailed.
Great advice, thanks! I assume this is only a technique you can use on used boats bought from a private seller? Because no way is WA going to exempt things like new electronics from sales tax just because you bought them attached to a boat instead of in a box from West Marine.
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Old 08-04-2019, 09:51 PM   #12
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My understanding as well was if you are a WA resident, you owe tax the day your boat enters the waters of the state.

I wonder what the consequences of placing the boat ownership in a corp or LLC based in another state are. I'd assume they cover that somehow "exclusively for your use" or some such, but ask the question. Even as an alien, you have to pay the tax after 60 days.
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Old 08-04-2019, 09:55 PM   #13
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Great advice, thanks! I assume this is only a technique you can use on used boats bought from a private seller? Because no way is WA going to exempt things like new electronics from sales tax just because you bought them attached to a boat instead of in a box from West Marine.
Yes, used boats and RV's. If the used boat is less than 5 to 10 years old, a little more involved.

A lot of brokers will tell you this is not doable. They get protective of their commission so you have to let them know that they will earn commission on the boat and personal property.

Sellers become concerned that they will get in trouble. You have to reassure them that all they are doing is providing a separate receipt for boat and personal property. What the buyer does with the recipts should not haunt the seller at a later time.
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Old 08-04-2019, 10:04 PM   #14
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My understanding as well was if you are a WA resident, you owe tax the day your boat enters the waters of the state.

I wonder what the consequences of placing the boat ownership in a corp or LLC based in another state are. I'd assume they cover that somehow "exclusively for your use" or some such, but ask the question. Even as an alien, you have to pay the tax after 60 days.
So is it 60, 90 days or 6 months in the state before tax is due.

I have friends that store vintage and collector cars in Oregon in order to avoid Washington State sales tax. They will occasionally bring one to Washington and keep it here for a while. They use the storage facility address for any correspondence regarding the cars.
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Old 08-04-2019, 10:19 PM   #15
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It is 60 days. That can be extended by 60 days with a cruising permit (must be applied for in person before the first 60 is up). That can be extended another 60 days (again in person before the second 60 is up). Then you must leave the state for 180 days or be taxed.

Some of the finer points are ambiguous, and as two agencies are involved (and apparently don't agree on interpretation), you roll the dice a bit after 60 days. There is also a holiday when the boat is being worked on by a Washington business. This is talked up by brokers a lot. "Just tell 'em it's being worked on for a year, and replace a windshield wiper...". But the law says you must apply for the holiday on a form signed by the biz owner and notarized, describing the work done, every 60 days. This an application for exemption, which may be denied, and now you owe the tax for sure. If it leaves the dock an employee of the company must be on board.

There is a reason why a lot of non-residents keep their boats in Canada rather than Washington. Not clear Washington is better off on balance, but I've not seen the numbers.
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Old 08-04-2019, 10:20 PM   #16
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Oh, also, if you buy the boat from a broker there is a one time, one year permit available for $500. Then you must leave the state.
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Old 08-04-2019, 11:27 PM   #17
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Just a recommendation, you should probably seek legal advise if you are considering mooring the boat on the Oregon side, especially Washington residents.
Oregon doesn’t care where your a resident of. They only require you to register the boat and dink if applicable, even CC documented boats.
We are residents of Nevada and are happy to pay the Oregon registration as no way to register the boat out of our home state of Nevada.
As a general rule, we dont leave or cruise the boat in Washington or California for more than 90 days a year. They are both very diligent in tracking Non-Resident property being in there waters for more than 90 days. They can and will try to collect sales tax and property tax on personal property if that personnel property is within the guidelines of the tax code. Several friends have had to fight the system and most times they have lost. A few of them were turned in by friends or concerned residents.
Now that we are cruising down the West Coast we pay close attention to time in state waters and once we get to the East Coast we will have to pay attention to the state guidelines there, just like we have here on the West Coast.
It’s a shame that states want to go after cruisers so hard, especially since we tend to support local business so much while cruising.
Best of luck on the boat search.
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Old 08-05-2019, 05:12 AM   #18
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My understanding as well was if you are a WA resident, you owe tax the day your boat enters the waters of the state.

I wonder what the consequences of placing the boat ownership in a corp or LLC based in another state are. I'd assume they cover that somehow "exclusively for your use" or some such, but ask the question. Even as an alien, you have to pay the tax after 60 days.

WA has plugged this loop hole, and I think rightfully so. The rules that allow visitors are different for LLC-owned boat, and include a specific test to see if the LLC owner(s) are WA residents. So if a WA resident owns the LLC, it's the same as the WA resident owning the boat, and tax is due immediately when the boat enters the state.
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Old 08-05-2019, 05:31 AM   #19
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It is 60 days. That can be extended by 60 days with a cruising permit (must be applied for in person before the first 60 is up). That can be extended another 60 days (again in person before the second 60 is up). Then you must leave the state for 180 days or be taxed.

Some of the finer points are ambiguous, and as two agencies are involved (and apparently don't agree on interpretation), you roll the dice a bit after 60 days. There is also a holiday when the boat is being worked on by a Washington business. This is talked up by brokers a lot. "Just tell 'em it's being worked on for a year, and replace a windshield wiper...". But the law says you must apply for the holiday on a form signed by the biz owner and notarized, describing the work done, every 60 days. This an application for exemption, which may be denied, and now you owe the tax for sure. If it leaves the dock an employee of the company must be on board.

There is a reason why a lot of non-residents keep their boats in Canada rather than Washington. Not clear Washington is better off on balance, but I've not seen the numbers.

All excellent points, and I discovered a few other ambiguities and differences of interpretation even within the same agency. For example:


- Most seem to agree that the first 60 days are days in WA waters, not calendar days running from first entry. In other words, if you are in WA for 3 days, then are in Canada for 4 days, you have use 3 of you 60 days, not 7. So the 60 day clock stops when you are not in WA waters.


- But the 60 day add-on time is interpreted differently, even within the same agency. The registration people who administer it (issue the license/permit) have paperwork and applications that all assume the extension is 60 consecutive calendar days. This directly contradicts the wording in the actual law which is identical to the wording for the first 60 days, and clearly states days of "use in WA waters". A state DOW person who was hounding me interpreted it the same way as the registration people, but a friend got a binding determination from DOR saying the opposite, i.e. it's treated like the first 60 days.


- I also got into a debate with the DOR about whether your 60 visitor days stop accumulating when you file a repair affidavit, or if they keep running. And the same question applies to the add-on 60 day permits. Does that clock stop when you file a repair affidavit, or not? It's unclear.


I finally left WA, even though I was spending good money (and sales tax) in the state. Being a visitor in a state with a nearly 10% boat tax went from a high-stakes, low-risk endeavor because the rules seemed clear, to a high-stakes, high-risk endeavor when I realized I could get snagged by any one of these different interpretations. So like many, many WA boaters, off I went to Canada where the rules are clear and they welcome visitors. The net for WA was 1) they lost the business revenue and the associated sales tax revenue that I was providing, and 2) they didn't get the use tax either. And I didn't get to spend more time in WA, which I wanted to do. It was a loose, loose, loose. Simply brilliant.
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Old 08-05-2019, 11:03 AM   #20
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Another grey area is what is "use in WA state waters"? Is the clock running on a dry stored boat, while it is dry stored? Nobody seems to know. Actually the statue says something like "60 days after entering the waters of the state of WA" which is unclearer still. Suppose you keep a boat on a trailer. You bring it into Washington and put it in the water one day a year. Do you get 60 years? or owe tax 60 days after the first splash? The documentation company in Anacortes told me the latter. Suppose I bring a boat in on a trailer and store it for a year before it gets wet. Do I owe taxes within 60 days? or not until 60 days after it gets wet? Does rain count as the "waters of WA state"?
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