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Old 01-06-2020, 07:15 AM   #1
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Another Sales Tax and State Registration Scenario

I know this issue has been discussed adnauseam, but Iíll throw out a scenario I am considering and see what the more clever minds on this forum think. For context, we are looking at a potential purchase of a trawler currently located in Florida around the $400K price point. Our short term plan (the next 18 months) is to bring the boat back to Texas (where we currently live) and get the boat ready for our long term plans. Long term plans start in early 2022 when we will commence with our great loop adventure (1 year) followed by either extended Bahamas cruising and/or another turn around the loop in a more relaxed manner.

What I am thinking is to register the boat in Florida upon purchase, as this is where the boat will eventually spend most of its time once we are finished in Texas. In addition, Florida has a sales tax cap of $16,000 whereas Texas is uncapped and at a slightly higher rate (6.25% vs. 6.00%). I donít envision a scenario where the boat would ever return to Texas under our ownership. In addition, the boat will be documented. Does this plan sound reasonable or am I missing something? Thanks!
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Old 01-06-2020, 07:31 AM   #2
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Ask Texas about potential tax liability after purchasing elsewhere and bringing into the state for a couple years.

Some states recognize sales tax previously paid to other states... and some states don't charge sales tax on incoming boats that have been owned for X time period. Just ask.

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Old 01-06-2020, 07:31 AM   #3
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Yes, I think it sounds viable if the boat won't return to Texas. I would contact your lawyer and make certain you aren't violating a Texas law as you are a resident of that state.

The other considerations is the cost of going back and forth between Texas and Florida before leaving on your trip. If you plan to spend a bunch of time (trips to Florida) on the boat, traveling costs start to add up as opposed to keeping it local to your home.

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Old 01-06-2020, 07:31 AM   #4
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You’ll save on the sales tax, but your insurance rates will be significantly higher and n Florida - you may want to consider keeping her in the northeast or central Atlantic seaboard.
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Old 01-06-2020, 08:07 AM   #5
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No sales tax at all if you buy in Florida and move to Rhode Island within (2??) months.
Keep it in RI until ready to go cruising - still no sales tax in Fl if just cruising through, vs keeping it there. Our friends keep their boats in GA during the hurricane season for lower insurance, better protection.
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Old 01-06-2020, 08:14 AM   #6
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Are you sure that sales taxes are uncapped in Texas?

This link seems to suggest there is now a cap. It notes, "*Sales tax for vessels and outboard motors purchased in Texas on or after September 1, 2019 is capped at $18,750.00."

One more thing to add. If it was me, I would gladly pay a little bit more money to have my boat so close to me. I can't image living only an hour from Galveston Bay and not enjoying the boat!

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Old 01-06-2020, 09:09 AM   #7
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Once we get the boat back to Texas, we are planning on living aboard, so taking it to RI (or any other jurisdiction) is a no go. I checked this link comptroller.texas.gov/taxes/boat and the cap of $18,750 was introduced effective Sept 1, 2019. Nice catch!

The issue remains of keeping the boat in Florida (long term plans) for extended periods of time without running afoul of Floridaís regulation on extended stays.

Originally, I was all for trying to find ways of not paying any tax, but wiser heads advised that eventually you will run afoul of some jurisdiction.
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Old 01-06-2020, 09:20 AM   #8
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Once registered in Texas you only pay for annual registration. Many people move the boat out of state every six months and don't even pay that. Kind of a gray area. We only do that on the dinghy.
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Old 01-06-2020, 09:36 AM   #9
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Another twist I was thinking about was paying the sales tax for the boat in Florida, but registering the dinghy in Texas so at least I would have a Texas registration decal.
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Old 01-06-2020, 10:26 AM   #10
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How old is your potential purchase? In Florida any boat 30 years or older is only $40 a year to register. Our 14’ tender costs more to register than our 63’ motor yacht!
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Old 01-06-2020, 10:26 AM   #11
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Another twist I was thinking about was paying the sales tax for the boat in Florida, but registering the dinghy in Texas so at least I would have a Texas registration decal.
The registration decal would be for the Dinghy. You can't register Boat A, then affix Boat A's sticker on Boat B. That applies to all of the states. In some states a tender (dinghy) can operate under the 'motherships' registration, but typically with some limitations.

Taxes for a vessel are paid in the state where the vessel resides. You're residency has no bearing on this. CG Documentation has no direct bearing on State Registration. That has to do with Titling and paperwork to travel internationally. It is not uncommon to have to register in multiple states if the vessel is operated in that state for greater time period than that state allows.

Typically, Sales Taxes are paid to only one state. However some states impose a Use Tax.
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Old 01-06-2020, 11:32 AM   #12
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The boat is 12 years old, so no-go on that sweet deal in Florida.
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Old 01-06-2020, 11:49 AM   #13
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I think you’re overthinking this a bit. Pay the sales tax in Texas and enjoy. I will say Florida does have laws that you have to vacate the state within 90 days or you get hit with an amount equal to their sales tax.
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Old 01-06-2020, 12:23 PM   #14
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You can stay in Florida up to 6 months with an extension.
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Old 01-06-2020, 12:48 PM   #15
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I think youíre overthinking this a bit. Pay the sales tax in Texas and enjoy. I will say Florida does have laws that you have to vacate the state within 90 days or you get hit with an amount equal to their sales tax.
If you pay sales tax in another state and later bring it to FL for over 90 days, you don't have to pay sales tax there, just have to register it there.
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Old 04-08-2020, 07:40 PM   #16
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Would that still be the situation if I registered the boat in a non-sales state like Delaware?
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Old 04-08-2020, 09:05 PM   #17
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That extra 90 day extension in Florida costs $420. Don't ask me how I know.
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Old 04-08-2020, 09:15 PM   #18
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In California the FTB can come after you for up to 8-years in arrears, even if you do not own the boat any longer. In my case, having purchased and used a boat outside of the state for about a year (when the exclusion was 90-days) I felt pretty safe. But nonetheless, I did file an FTB use tax return to document my out of state use justifications. Event so, I was aware that up to that 8-year date, I could have been assessed 25K+ in tax with little or no recourse.

So your results WILL vary by state, jurisdiction, etc. I have found that hiring a use-tax agency is helpful for vessels/aircraft if you are trying to preserve out-of-venue status, but give the high-demand for more revenue by the state/counties you should not count on playing gamesmanship with the tax authorities as being to your advantage...
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Old 04-09-2020, 01:36 AM   #19
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I home port in Oregon, a no sales tax state.
Usually you have to show residence in the no sales tax state, otherwise when you move it or re-register it in a sales tax state, they come after the tax.
Sometimes there's a ownership time requirement to negate the tax.


In the good old days, a documented vessel didn't have any state taxes to pay. That was one of the big reasons to document.
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Old 04-09-2020, 11:04 AM   #20
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Oregon is a no sales tax state. However, if an Oregonian buys a California registered boat he/she is liable for the sales tax to California. Even if the sale is completed and registered in Oregon. I do not know if any other state is this extreme but it’s best to consult a professional.
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