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Old 09-22-2017, 06:02 AM   #21
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Some great advice from all. I would also point out, if you buy a vessel in another state from where you live, that state will also get a % of the sales tax. So have a chat with an tax attorney.


Cheers and good luck.


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Old 09-22-2017, 06:24 AM   #22
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In Mass we don't pay sales tax on a home. We have an annual tax bill we pay the city but not on the sale or purchase of the home.
It's not called "sales tax", but real estate transfers are definitely taxed in Mass. They call them transfer stamps or deed stamps or something like that. But a tax is a tax by any other name.
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Old 09-22-2017, 06:27 AM   #23
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Some great advice from all. I would also point out, if you buy a vessel in another state from where you live, that state will also get a % of the sales tax. So have a chat with an tax attorney.


Cheers and good luck.


H.
In my experience the most a second state tags you for is the difference in the 2 amounts of sales tax.

If the statevyou bought in charges 5% , but your home state where you register the boat charges 7%, you cough up the difference.

I think some states forgive the difference if the boat has been kept out for a certain length of time.

Is this what you were refering to? I havent heard of a state looking for tax beyond what they would charge just in that state.
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Old 09-22-2017, 06:32 AM   #24
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If you own a boat and move to Fl, there isn't any additional tax. Don't remember how long you had to own the boat before you became a FL resident, maybe one year.

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Old 09-22-2017, 07:52 AM   #25
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Hi all
New to forum and have a sales tax question I live in NY state and
Have an 8 percent sales tax, when purchasing a used
Trawler will I have to pay the tax
I will be selling my house and living on board traveling
Knacc,

Yes, you can avoid sales tax but do your own studying prior to buying the boat. Then call a tax person that knows boats... a marine expert, not just your local guy.....if you need.

There's a few folks that are constantly moving and never spend enough time in one state to be taxed. And the situs of the boat is in a non taxed state. There's a strong argument to NOT own a boat in your personal name, or any toy for that matter. If you move out of your dirt house and sell it, you can probably live anywhere and set up a mail box there. Perhaps the folks that do it will comment.

And the boat does not have to be registered where you live... but preferably the boat would be not be in your name. If you register it in a state that has tax, you'll most likely pay it.

There's a bit of research, and certainly a reason to download the tax code from each state you plan on spending a lot of time in.

A quick search comes up with this:
How to avoid paying taxes on your boat...legally! - Answers in Boat Tax Law

A start for now.

(disclaimer: not a tax expert by any means and this info is mostly info I'd heard from others. Most of us just pay the piper and go.)
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Old 09-22-2017, 08:16 AM   #26
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With some good non-tax state alternatives near you like Rhode Island and Delaware, no need to establish NY as your home port and throw away 8%.
Also if you're going to be moving it to different states, you might look into USCG documentation rather than just a state registration.
"The Man" likely already collected a big chunk of money from the guy that bought the boat brand new....
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Old 09-22-2017, 08:25 AM   #27
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With some good non-tax state alternatives near you like Rhode Island and Delaware, no need to establish NY as your home port and throw away 8%.
Also if you're going to be moving it to different states, you might look into USCG documentation rather than just a state registration.
"The Man" likely already collected a big chunk of money from the guy that bought the boat brand new....
In addition to looking at non-sales tax states, look for states that do not apply the tax to used boats bought from individuals.
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Old 09-22-2017, 08:50 AM   #28
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Think about it in order.

If your intention is to sell your home, use the proceeds from that sale to buy a boat, then travel...

*** Sell your house
Now you are homeless, and have no physical ties to any state. Yes you still have a drivers license from your old state but you don't live there anymore.
*** Establish residency in a state with no sales tax. That is not illegal or immoral. You gotta call somewhere "home". Get a drivers license, register to vote, etc...Rent an apartment to stay in while you search for and close on a boat.
*** buy a boat and travel

It is world class stupid to pay sales tax in a state you no longer live in, and have no intention of living in.
We are thinking about doing something like this, but it's because of state income tax, not sales tax.

We plan to sell our house in the next 6 months and move into a rental. When I retire in 4 years, we will be cashing out one of our retirement accounts to buy our retirement home. Prior to this, we may set up residency in Florida. This way, the withdrawl from the retirement account is not subject to state income tax in our current state.

We plan on living on the boat we buy (hopefully in the next 2 years, yes we will pay sales tax on the boat) and living in Europe for about 2 years. We then will set up residency somewhere in the U.S. and likely buy our retirement home.

For the OP, I would ask have you considered state income tax as well as sales tax?

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Old 09-22-2017, 11:16 AM   #29
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Sales tax laws are more complicated than you think. If an Oregon resident buys a California registered boat they must pay California sales tax, even if they take possession of the boat in Oregon and register it in Oregon. Talk to an expert first.

Wow. When I practiced law in this area California was aggressive, but this would take the cake. Do you have any reference for that comment?
Ask any California yacht broker about sales tax. Call the California board of equalization for a ruling or just google California boat sales tax to find a copy of the code.

California will give you credit for sales tax you pay to your home state.
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Old 09-22-2017, 11:47 AM   #30
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Ask any California yacht broker about sales tax. Call the California board of equalization for a ruling or just google California boat sales tax to find a copy of the code.

California will give you credit for sales tax you pay to your home state.
I question this. Here is a quote from the California Sales Tax booklet:

The law allows several exemptions. For example, tax
may not apply to your purchase if the vessel:
Was purchased for use outside California

Also if I am in Oregon, receive the boat in Oregon and the use the bill of sale to document the boat in Oregon how is the state of California going to interfere.

Sales tax (misnomer it is actually a retail occupation tax) is closely limited by Supreme Court decisions requiring situs in the state attempting to impose the tax. Thus the exception for interstate sales.
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Old 09-22-2017, 01:06 PM   #31
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If you are a California resident and you take possession of the boat out of state and you register it out of state you get the exemption. If you are an out of state resident and you buy a California registered vessel you will pay use tax to the state of California, they will credit you for any sales tax you pay to your own state. Since Oregon has no sales tax you will pay the full amount to California. If you don't believe this just call a California Yacht broker and ask them.
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Old 09-22-2017, 01:11 PM   #32
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How does California inforce this? First when you submit the title to Oregon they won't issue a new title until California signs off. Second, California will send a bill in the mail. Don't pay the bill. They then turn it over to collections. Don't care about your credit and don't plan to get a speeding ticket in California and don't plan to sell the boat. You win! Other wise you loose.
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Old 09-22-2017, 01:26 PM   #33
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We are thinking about doing something like this, but it's because of state income tax, not sales tax.

We plan to sell our house in the next 6 months and move into a rental. When I retire in 4 years, we will be cashing out one of our retirement accounts to buy our retirement home. Prior to this, we may set up residency in Florida. This way, the withdrawl from the retirement account is not subject to state income tax in our current state.

We plan on living on the boat we buy (hopefully in the next 2 years, yes we will pay sales tax on the boat) and living in Europe for about 2 years. We then will set up residency somewhere in the U.S. and likely buy our retirement home.

For the OP, I would ask have you considered state income tax as well as sales tax?

Jim
Jim,

Sales tax for a boat and income tax have nothing to do with each other. One is a tax for making money and the other is a tax for spending money.

As for residency, I could argue to make your move now and establish FL residency. Buy, rent or get something down there. Rent a room from a friend, get your license, bank accounts, etc. there. Or perhaps find another state that's user friendly for retirees, but waiting to the last minute could have some issues.

Search out residency requirements and plan accordingly, especially if your goal is to move out and be a boat nomad.

Also, just moving into a rental may not help much, but it's a step.
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Old 09-22-2017, 01:31 PM   #34
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How does California inforce this? First when you submit the title to Oregon they won't issue a new title until California signs off. Second, California will send a bill in the mail. Don't pay the bill. They then turn it over to collections. Don't care about your credit and don't plan to get a speeding ticket in California and don't plan to sell the boat. You win! Other wise you loose.
My limited experience and from what I've heard, Kalifornia is brutal. I sold an airplane once, and delivered it to the buyer in Kalifornia, and they sent ME a tax bill. (actually sent the owner, I don't own anything in my own name). Personally I had no liability so I sent them a very nasty letter and enjoyed sending it.

It's too bad, it's such a nice state with so many problems and issues.
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Old 09-22-2017, 01:47 PM   #35
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Jim,

Sales tax for a boat and income tax have nothing to do with each other. One is a tax for making money and the other is a tax for spending money.

As for residency, I could argue to make your move now and establish FL residency. Buy, rent or get something down there. Rent a room from a friend, get your license, bank accounts, etc. there. Or perhaps find another state that's user friendly for retirees, but waiting to the last minute could have some issues.

Search out residency requirements and plan accordingly, especially if your goal is to move out and be a boat nomad.

Also, just moving into a rental may not help much, but it's a step.
You don't need a room to establish Florida residency. Just an address and many do it through St. Brendan's Isle. Now, that comes with one caveat. Establishing residency in one state does not mean another state will recognize you as no longer being a resident. You must also clearly take steps of leaving it. We went through that in moving from NC to FL and we did have our NC tax return audited for that year since we lived in both NC and FL but had far more income in FL.
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Old 09-22-2017, 02:11 PM   #36
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In my experience the most a second state tags you for is the difference in the 2 amounts of sales tax.

If the statevyou bought in charges 5% , but your home state where you register the boat charges 7%, you cough up the difference.

I think some states forgive the difference if the boat has been kept out for a certain length of time.

Is this what you were refering to? I havent heard of a state looking for tax beyond what they would charge just in that state.
From what my tax attorney tells me if you buy a vessel in one state that has sales tax and if your state has a sales tax, then you pay the sales tax to your state. Then your state forwards a % of what you paid in sales tax to the state you bought the vessel in.

Both states cannot charge their full sales tax on the same item that you bought. It would be double taxations. Thus the state you live charges the sale tax (If your state has sale tax.)


Where I live the sales tax is 6.5 % on a new vessel and 5.75% 0n a used vessel. If I buy a vessel in a state that has a 7% sale tax, Ohio will send the other state a % of sale tax you paid. That is the way it work in Ohio.

As far as the other state coming after you for the difference? I guess the could. However I believe it would fall under double tax taxation due to the fact that you pay the full sales tax in your state. With that said, it is always a good idea to chat with a tax attorney when buy a vessel out of your state.

Cheers.

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Old 09-22-2017, 02:29 PM   #37
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You don't need a room to establish Florida residency. Just an address and many do it through St. Brendan's Isle. Now, that comes with one caveat. Establishing residency in one state does not mean another state will recognize you as no longer being a resident. You must also clearly take steps of leaving it. We went through that in moving from NC to FL and we did have our NC tax return audited for that year since we lived in both NC and FL but had far more income in FL.
BandB,

Good point, but the post office box address doesn't quite give the credibility of a concrete home. But, one could make a strong argument with St. Brendan's that they reside there in a boat.

Another really tough area, is if you collect W2 income in that state.
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Old 09-22-2017, 03:12 PM   #38
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BandB,

Good point, but the post office box address doesn't quite give the credibility of a concrete home. But, one could make a strong argument with St. Brendan's that they reside there in a boat.

Another really tough area, is if you collect W2 income in that state.
PO Address won't do it. St. Brendan's will in FL. In some states, mailbox services will and in others they will not. FL is glad to have as many residents as want to be. St. Brendan's doesn't need an argument. It has long been accepted in FL.

If you collect W-2 income in the old state you'll have to go to great lengths not to be considered a resident. I quit my employment in NC immediately, as did my wife. I had an office address in FL and provided consulting services including to my former employer for a couple of months. I still consult about one day a month with the parent company.

Here were our steps.

For FL Residency
-Physical address, we bought a condo
-Driver's license
-Homeowners and Auto Insurance
-Transfer title of car
-FL Bank accounts
-FL PO Box for mail

To relieve ourselves of NC Residency
-Sold one car, moved the other to FL
-Moved all personal belongings and furniture
-House on market, sold one week later
-Sold boat in NC.
-Resigned jobs

We also got advised by a FL attorney and accountants in both states.

All of part one, establish FL residency, can be done at St. Brendan's. However, Part two, removing signs of Previous State Residency can be more difficult.
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Old 09-22-2017, 03:17 PM   #39
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PO Address won't do it. St. Brendan's will in FL. In some states, mailbox services will and in others they will not. FL is glad to have as many residents as want to be. St. Brendan's doesn't need an argument. It has long been accepted in FL.

If you collect W-2 income in the old state you'll have to go to great lengths not to be considered a resident. I quit my employment in NC immediately, as did my wife. I had an office address in FL and provided consulting services including to my former employer for a couple of months. I still consult about one day a month with the parent company.

Here were our steps.

For FL Residency
-Physical address, we bought a condo
-Driver's license
-Homeowners and Auto Insurance
-Transfer title of car
-FL Bank accounts
-FL PO Box for mail

To relieve ourselves of NC Residency
-Sold one car, moved the other to FL
-Moved all personal belongings and furniture
-House on market, sold one week later
-Sold boat in NC.
-Resigned jobs

We also got advised by a FL attorney and accountants in both states.

All of part one, establish FL residency, can be done at St. Brendan's. However, Part two, removing signs of Previous State Residency can be more difficult.
Good post.
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Old 09-22-2017, 04:13 PM   #40
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OK, another related question....

We purchased our (documented) boat in Texas many years ago and moved it to Wisconsin where we paid the tax and have it registered. We still live in Texas. The boat spends the winter months sitting in a storage building in Wisconsin. For the three summer months it is typically in a slip in Michigan. We're thinking about moving it to Michigan for winter storage as well. Any tax issues? Wisconsin doesn't have clue where the boat resides at any given time...they just like the bi-annual registration fee. What about Michigan? How would they even know...or care?
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