Sales taxes & Ownership

[Mako]

I wanted to go back to some previous comments which sounded like if a foreign vessel (on a cruising permit) stays in WA or CA, that there are State cruising fees due.

Obviously the foreign vessel is exempt from sales or use tax, but this permit requirement sounds strange and I wanted to clarify.

 

[Bellakins]

We ran into tax issues when we were buying our boat in FL and moving it to our home in NC, which has a much lower sales tax. Our broker said we had to hold settlement 3-15 miles offshore in order to avoid paying FL sales tax, depending on which coast it was. However, since we were buying the boat directly from the owner, no sales tax was required! We verified by calling the FL taxation office. Anything bought directly from owner is processed as if it's bought at a garage sale, no sales tax to pay. Saved us going offshore for a complicated settlement.

 

[Larry M]

In Massachusetts you must own a vessel for 6 months in another state before you can bring it to MA with no sales tax. Maybe he did not do that? I am surprised they would just impound the boat and not give him a chance to pay the tax and/or registration? ...

Maybe they did contact the owner but I did see the placard similar to the one below. When they stickered the boat, it was on the hard for the winter down the Cape.

Maybe impounded was the wrong term?

 

[delirious duo]

any Alaskans with knowledge? buying in WA have any advice? We plan on registering the boat in Alaska but not sure where we are putting up end of next season.

 

[Larry M]

Give a call to Marine Documentation Service in Anacortes. We bought a boat in Alaska as Washington residents and sold a boat in Florida to Washington residents. Brokers were not involved in either transaction. There was good advice given on both transactions.

https://www.marinedocservice.com/

 

[delirious duo]

Maybe no prices listed though..

Nonresident sales and use | Washington Department of Revenue

I guess I have 45 days to cruise in state? From date of final sale.

Or a waiver to avoid being taxed in WA for repairs if on the hard? Are they aggressive like running down the dude with cheap beer and a jug of lauqer thinner hitting up for fuel?

 

[adornato]

the issues of sales tax, use tax registration could be a profitable business for someone. If I have a boat built in FLorida and live in California and use it in Maine, for example, what would be the best strategy..
or have a boat built in New Hampshire, use it in Maine and California alternate seasons, where should I take delivery and register it and pay tax..
taxes taxes.

 

[delirious duo]

Maybe they did contact the owner but I did see the placard similar to the one below. When they stickered the boat, it was on the hard for the winter down the Cape.

Maybe impounded was the wrong term?

Only one worse is the u.s. Marshall sticker lol.

 

[delirious duo]

I'd be interested to hear how you handle year round mooring in Point Roberts. My understanding of the WA rules is like DDW's. The WA extension permits can get you up to 180 consecutive days, but then you need to be out until 1 years from your entrance date.

As for US boat in Canada, it's done just as you described. They can stay for up to a year, but then need to leave and re-enter to restart the clock. This is exactly why so many US boats stay in BC - to avoid the WA taxes.

I’m looking for the regs on this got any Canada ���� links?

 

[bumpkin]

I used Connie Crews at All Yacht Documentation. I wanted an Llc and she worked with an excellent fast attorney. She was the best. The lawyer had definite opinions on which states were best to have our boat licensed and which states to register our boat.

I couldn't believe how inexpensive it was to hire professionals. She will be the first person I call when I have another boating transaction. Her phone, 386 462-1144 and her email is connie@allyachtdoc.com

 

[BruceK]

A famous quote on Tax Minimisation by the Late Kerry Packer.

Kerry Francis Bullmore Packer AC has famously stated.
‘I am not evading tax in any way, shape or form. Now of course I am minimising my tax and if anybody in this country doesn't minimise their tax they want their heads read because as a government I can tell you you're not spending it that well that we should be donating extra’


The late Kerry Packer was a media mogul in Australia. He sold his TV empire to Alan Bond(winner of the Americas Cup) for a huge amount and when Bond went broke bought it back for peanuts. A tough financial wizard but no match of the Nuns who ran St.Vincent's Hospital when they were seeking donations. After his life was saved by a defibrillator in the 1990s he donated a defibrillator to every ambulance, they were known as a "Packer Whacker". Generous to a fault to those he liked, but he didn`t like paying tax

 

[DDW]

I’m looking for the regs on this got any Canada ���� links?

Easily found with Google. Look here.

"Baggage and conveyances temporarily imported by non-residents of Canada may remain in Canada duty and tax-free until the expiration of the date they intend to leave Canada or 12 months after the date of importation."

This second bit seems to be rarely done:

"Boats imported strictly for repair or storage, or those remaining in Canada for storage purposes in the off-season, should only be documented on Form E29B. If used, the Form BSF375 will be endorsed "for repair only." A copy of the work order from the repair facility must be attached to the CBSA copy of the Form BSF375 or the Form E29B. Both these forms must show an expiry date and indicate the location where the unit is authorized to remain while being repaired or stored."

I never did that and nobody - not the marina office, not the customs office - seemed to have heard of it.

 

[Cold Duck]

the issues of sales tax, use tax registration could be a profitable business for someone. If I have a boat built in FLorida and live in California and use it in Maine, for example, what would be the best strategy..
or have a boat built in New Hampshire, use it in Maine and California alternate seasons, where should I take delivery and register it and pay tax..
taxes taxes.

You are correct, it could be a great business. However, when you say you have a boat built in Florida, this alone could change the tax status as the boat is sold new in Florida. Hawaii would require Sales tax on new, no tax on used sale. I really don't know what Florida's status is here. Every state has its own complicated taxing formula. Every state will be different and then throw in if you are going to permanently moor in a state vs cruising status will complicate the matters as each state treats this differently. If you are purchasing a boat somewhere just to avoid taxes, this might impact how you can use the vessel. Figure out how you want to use the vessel then look at how you might reduce your tax exposure the best you can. Back in the 70s people would document in Puerto Rico or American Virgin Islands to avoid taxes. Don't know now if that is still a valid way to avoid taxes or not but each transaction is unique and there is no way you can say a blanket way to do it will work in all states and all situations. You have to abide by the laws of the states involved and use any loopholes they provide.