# Avoiding sales tax on purchase of used boat



## prroots (Nov 13, 2010)

It looks like I may be buying a used sailboat in Florida. We will be living aboard outside the US. Where would be the best place to register boat to avoid sales tax? We recall New Hampshire being a good choice? Is this still the case? Are there other alternatives?
Pete


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## Yorksailor (Oct 11, 2009)

Document it with the Coast Guard which is very inexpensive and then move it within the Florida tax period which I think might be 90 days.

Off-shore registrations tend to be $1000+.

While a US flag allows the US Coast Guard to board you anywhere in the world this is only a problem if you are doing something illegal. The big advantage is that it is easier to get them to go out of their way to help you if you are US.

Once out of the US you only have to pay each country's entry fees which are from nothing in the Grand Caymans to $200-300 in many Caribbean and Latin American countries.

Phil


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## skipmac (Oct 31, 2007)

You have to have an out of FL address and remove the boat from the state by the deadline (I forget if it's 30 or 90 days) or Florida WILL ding you for the sales tax.

You can get an extension of the deadline if the boat is in a yard and under repair.

Problem is, most other states also have a sales tax and if FL doesn't get you then they will. Where do you actually live, register to vote and/or get your mail? Where do you plan on registering the boat?


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## Minnewaska (Feb 21, 2010)

Be very careful. Avoiding taxes by choosing the best offer is perfectly acceptable. There are states that have no sales or use tax on boats that are kept within their boundaries. I'm sure that is done to promote the money that mariners will then spend in their state on income tax generating businesses. However, be sure you don't misrepresent where the boat is being kept for purposes of avoiding sales tax. That is tax evasion, which is a crime they love to enforce because they will get way more out of you than just the tax you once owed.


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## prroots (Nov 13, 2010)

Thanks for the feedback. Just to clarify things, I do plan to obtain USCG documentation, primarily because it makes entry into foreign ports easier ie, all countries recognize it. Since we will not be spending much time in any one State, it's really a matter of finding the most tax friendly State. I do want to be registered in a State because failure to do so creates problems when transiting from State to State (even with USCG documentation). I'm hoping someone in a similar situation can provide details of what's involved. I have seen references to RI and NH as having no sales tax. Is this true and are there any boaters out there who can verify same and perhaps explain the procedure? Thanks
Pete


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## sailor50 (Aug 26, 2009)

Delaware is best for "DUMMY CORPORATIONS" - read tax evasion. Any state will follow you eventually if you stay long enough. I believe the "QUICK BOOKS FOR DUMMIES" series have a book on using your boat for business and how to's for tax elimination.

Remember who you are ultimately cheating, at the end of the day - the schools, closed libraries, the homeless and elderly, etc... not politicos.


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## Minnewaska (Feb 21, 2010)

Rhode Island does not have sales or use tax on boats. However, the state registration form requires you to identify your primary port of mooring. I doubt they allow the tax haven if you are not going to actually be there. Lie about that mooring location and you are back into tax evasion. Worse, you are going to be pursued by your state of residence, since your home address will be on the USCG reg form, unless you can demonstrate that the boat is elsewhere, such as with a slip/mooring rental, etc.


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## lobstahpotts (Jan 1, 2011)

Perhaps the best option is to find out which states are most friendly to liveaboards staying in-state, rather than the state with the lowest you'd hvae to pay. This may work to your benefit in dealing with the beaureaucracy in the long run. That being said, if you have means to declare a legitimate home port in Rhode Island, it would be an effective avoidance of those extra fees tacked on.


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## omaho5 (Jun 5, 2008)

*From NH*

We pay no sales[sails] tax here. We pay no excise or use tax on personal property as do many other states.
You may wish to look at BOAT YARDS-not marinas to call home here.
I would give you a few but not over net.


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## lobstahpotts (Jan 1, 2011)

That is an excellent idea. If you can associate with a boat yard and they are willing, one may be able to declare such a place to be the legitimate port of call while overseas.


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## prroots (Nov 13, 2010)

Minnewaska said:


> Rhode Island does not have sales or use tax on boats. However, the state registration form requires you to identify your primary port of mooring. I doubt they allow the tax haven if you are not going to actually be there. Lie about that mooring location and you are back into tax evasion. Worse, you are going to be pursued by your state of residence, since your home address will be on the USCG reg form, unless you can demonstrate that the boat is elsewhere, such as with a slip/mooring rental, etc.


Thanks for the advice. Your concerns are not an issue for me since the boat will actually be moored outside the US. I will not overstay the limit for any State. I also will have no trouble proving that the boat is never in the State listed on my USCG documentation. That's really just a contact address.

Both Rhode Island and New Hampshire look promising. I do have two questions:
1. Must you have an address in that State to register a boat there?
2. Can you apply for registration via mail or must you appear in person?
Pete


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## prroots (Nov 13, 2010)

lobstahpotts said:


> Perhaps the best option is to find out which states are most friendly to liveaboards staying in-state, rather than the state with the lowest you'd hvae to pay. This may work to your benefit in dealing with the beaureaucracy in the long run. That being said, if you have means to declare a legitimate home port in Rhode Island, it would be an effective avoidance of those extra fees tacked on.


Thanks for the feedback. I'm not sure I understand your reference to legitimate home port. It is my understanding that virtually all States welcome your registration since it adds much needed cash to their coffers. There is no need to prove that you spend any time at all in their State. Why should they care? Where the rub comes, is if you register in one State, but are actually spending too much time in another State where you have not paid taxes and registered. This would be tax evasion and is illegal. Fortunately, in my case that is not an issue since I have no plans to overstay my welcome in any one State.
Pete


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## Minnewaska (Feb 21, 2010)

prroots said:


> Thanks for the advice. Your concerns are not an issue for me since the boat will actually be moored outside the US. I will not overstay the limit for any State. I also will have no trouble proving that the boat is never in the State listed on my USCG documentation. That's really just a contact address.
> 
> Both Rhode Island and New Hampshire look promising. I do have two questions:
> 1. Must you have an address in that State to register a boat there?
> ...


I think you misunderstand. The RI registration form requires you to identify the marina where you will principally keep the boat. I doubt they are going to accept a registration if that principal location isn't in RI.

Secondly, I highly suspect that your state of residence will have a computer system pursue you for sales tax. They will just screen against the address listed on the USCG doc. If you legitimately never had the boat in that state and can *prove* it, you don't typically have to pay. However, to prove it, you will likely need more than a registration from another state, they will want to see proof of where it is kept. A mooring or slip contract should do the trick. Saying you are out to sea is not likely going to satisfy your home state.

1. No, you do not require a RI address to register a boat there. They require registration of any boat that remains in the state for more than some number of days (60 or 90?) regardless of where you live.

2. Yes, they accept registration by mail, but require notorized documents either way.

My advice. RI is not in the business of just collecting registration fees, although, they are fairly high. The average size boat is roughly $250, which climbes to $600 over 50ft. They are trying to attract boaters to their state who will then spend money in their state. I think that works. However, I do not think they are looking to be a safe haven to avoid taxes in your home state if you don't come spend money in RI.


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## prroots (Nov 13, 2010)

Minnewaska said:


> I think you misunderstand. The RI registration form requires you to identify the marina where you will principally keep the boat. I doubt they are going to accept a registration if that principal location isn't in RI.


This is incorrect. The RI government website clearly states that if you are in RI more than 90 days per year you must register your boat there. This means that if your home port (where you spend most of your time) is elsewhere you must still register your boat in RI. This is clear evidence that RI does not insist that you spend most of your time in their State. I would enjoy hearing any evidence to the contrary.



Minnewaska said:


> Secondly, I highly suspect that your state of residence will have a computer system pursue you for sales tax. They will just screen against the address listed on the USCG doc. If you legitimately never had the boat in that state and can *prove* it, you don't typically have to pay. However, to prove it, you will likely need more than a registration from another state, they will want to see proof of where it is kept. A mooring or slip contract should do the trick. Saying you are out to sea is not likely going to satisfy your home state.


As stated this is a non-issue since I am really outside the US most of the time and can easily prove it.


Minnewaska said:


> 1. No, you do not require a RI address to register a boat there. They require registration of any boat that remains in the state for more than some number of days (60 or 90?) regardless of where you live.
> 
> 2. Yes, they accept registration by mail, but require notorized documents either way.


That is good news. This is the information i was looking for. Anyone have actual experience for New Hampshire?

Thanks.
Pete


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## donradclife (May 19, 2007)

My dinghy is registered in RI because they insisted on it, even when I was only in the state for a few weeks. No sales tax, and I went to their office in Providence to do the paperwork. Gave the place I was currently anchored as my RI mooring, and they accepted that. Cost was $35 for a two year sticker to avoid dinghy hassles up and down the East Coast. Was able to renew online when we returned to the US.

Bought the big boat in NY, and immediately left the state. Documented it with Calif homeport, and it took over a year for the Calif tax people to come after me. Gave them an inch worth of receipts to show that the boat was not purchased in Calif waters and had not been there since I bought it, and got a nice letter back saying it was exempt from the use tax.


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## Minnewaska (Feb 21, 2010)

prroots, I think you are still missing the point. Unless you actually plan to be in RI for the prescribed period that requires registration, it sounds simply like tax evasion. You don't need a RI registration for any other purpose. Why would RI accept a registration for a boat that isn't and perhaps never will be there? Maybe I'm wrong. Whatever you do, don't lie when identifying your port. Fill in your overseas or out of state port and see what happens. I will be interested to hear.


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## scottyt (Jul 19, 2008)

well delaware as stated, but they do ask where the primary use of the boat is. you might call them and ask if they care if the boat is going to be out of the country.

my boat is owned by an LLC in delaware, but registered and taxed in maryland. 

one thing you need to remember is when if you come back to the US to stay you will be asked to pay the sales tax. any tax you paid in another state is normally not charged in the new state, as long as it was higher.


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## prroots (Nov 13, 2010)

scottyt said:


> one thing you need to remember is when if you come back to the US to stay you will be asked to pay the sales tax. any tax you paid in another state is normally not charged in the new state, as long as it was higher.


It's been my experience that this is not quite true. My information is quite dated, but in the case of Florida you could previously register without paying any sales tax if you could prove that you had satisfied the laws of another jurisdiction (spelled State) for some minimum period of time even if that other jurisdiction imposed no sales tax. As stated, this is dated information and anyone wanting to do this should get up to date information.
Pete


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## Minnewaska (Feb 21, 2010)

prroots said:


> It's been my experience that this is not quite true. My information is quite dated, but in the case of Florida you could previously register without paying any sales tax if you could prove that you had satisfied the laws of another jurisdiction (spelled State) for some minimum period of time even if that other jurisdiction imposed no sales tax. As stated, this is dated information and anyone wanting to do this should get up to date information.
> Pete


It isn't sales tax that concerns you at this point, it's use tax. So, if you haven't figured out how to avoid use tax as well, you're still on the hook. Use and Sales Tax rates are non-coincidentally the same in most states.

I think the 6 month waiting period after purchase only applies to residents of other states that might have their boat in FL for more than the time required to be registered there. Sales tax must be paid when being registered. I believe that FL residents are required to pay use tax whenever they bring a boat to the state, and get a credit for whatever they already paid elsewhere.

I'm not really following your plan very well. You said you would be out of the country, but you also said that you wouldn't be in any state for very long in a later post.


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## SPC (Nov 26, 2009)

I'm assuming that the owner cares about being prosecuted but I don't really see why if you are leaving US waters.

I was talking with a California State Board of Equalization attorney at a party, and I asked why California hadn't gone after the sales tax for online purchases from other states -- that sales tax is asked for on the state tax form, but really?

Anyway, he said that they have instead focused on big ticket items like boats. I assume most other cash strapped states do likewise. I would not be surprised if states cooperated on boat sales.

Let us know how it comes out.


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## lobstahpotts (Jan 1, 2011)

prroots said:


> Thanks for the feedback. I'm not sure I understand your reference to legitimate home port. It is my understanding that virtually all States welcome your registration since it adds much needed cash to their coffers. There is no need to prove that you spend any time at all in their State. Why should they care? Where the rub comes, is if you register in one State, but are actually spending too much time in another State where you have not paid taxes and registered. This would be tax evasion and is illegal. Fortunately, in my case that is not an issue since I have no plans to overstay my welcome in any one State.
> Pete


I simply meant, if you have some kind of contact such as a relative or friend with property or a mooring in Rhode Island and they were willing, you can legitimately say you have that Rhode Island connection if you were to be questioned by either Rhode Island or another state. I would however say it is non-essential and I am quite intrigued to see how this works out. I have used my parents' Maine address for a home port and registration in the past when planning similar endeavours and it has worked quite effectively as they will say, "Yes, it is registered here and really has a connection to this place" when questioned about it.


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## prroots (Nov 13, 2010)

Minnewaska said:


> I'm not really following your plan very well. You said you would be out of the country, but you also said that you wouldn't be in any state for very long in a later post.


Thanks. Let me clarify. Our home port (where we spend the majority of time) will be outside the US, but we hope to cruise the East coast from time to time. When doing so we will not exceed the limits of any one State. The boat will be documented with the USCG. Our plan is to also register her in one of the 50 States (such as NH or RI) to avoid hassles while cruising US waters. Documentation does not serve in place of registration, but it has the advantage that it's recognized by all countries when entering foreign ports. We think this plan makes good sense. We now need to answer the following questions for any State we consider:
1. Can registration be done via mail?
2. Must one maintain an address in the State?

We intend to contact the appropriate offices in RI and NH this week and report back. 
Pete


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## sailingfool (Apr 17, 2000)

prroots said:


> Thanks. Let me clarify. Our home port (where we spend the majority of time) will be outside the US, but we hope to cruise the East coast from time to time. When doing so we will not exceed the limits of any one State. The boat will be documented with the USCG. Our plan is to also register her in one of the 50 States (such as NH or RI) to avoid hassles while cruising US waters. Documentation does not serve in place of registration, but it has the advantage that it's recognized by all countries when entering foreign ports. We think this plan makes good sense. We now need to answer the following questions for any State we consider:
> 1. Can registration be done via mail?
> 2. Must one maintain an address in the State?
> 
> ...


Documentation does largely serve in place of registration. In MA I haven't had a sailboat registered in 30 years, just documented. The state requires you to go through the registration process to where you pay the sales/use tax, and then you are done. No numbers, no form, no followup ever on anything. All you have to show about it, is a receipted form showing you paid the tax. Another state will have no interest in that paperwork unless you claiming exemption from a similar tax.


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## prroots (Nov 13, 2010)

I was able to contact the appropriate government office for both RI and NH. In the case of RI, I received the following responses to my questions:
1. You may register without having a RI address
2. You may register by mail
3. There is no minimum period you must be in State each year. In fact, they volunteered that the boat need not even be in water! They actually chuckled at this question!

In the case of NH, it's much more difficult to get an authoritative answer since their system is so decentralized. Each town clerk is responsible for registering your boat depending on where you live. Also, they've even privatized the system by allowing marinas to register your boat. I did call the main number and was told the following:
1. You may register without having a NH address
2. There is no minimum period you must be in State each year
3. They were not able to say if you could apply by mail since most everyone just walks into the office of their marina or town clerk. I was told to check with any town clerk or marina.

It seems that my plan is entirely practical and I just need to decide whether NH or RI will be more convenient and economical. I do advise that anyone wishing to follow a similar plan, verify the information.


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## prroots (Nov 13, 2010)

sailingfool said:


> Documentation does largely serve in place of registration. In MA I haven't had a sailboat registered in 30 years, just documented. The state requires you to go through the registration process to where you pay the sales/use tax, and then you are done. No numbers, no form, no followup ever on anything. All you have to show about it, is a receipted form showing you paid the tax. Another state will have no interest in that paperwork unless you claiming exemption from a similar tax.


In the case of RI, it seems that this is not true. Their online information even describes how you register a boat that is documented. No waiver is given. I suspect that one much check with each State. In my case, I am voluntarily registering my boat whether it is legally required or not. Based upon previous experience, this is well worth the trouble and expense to avoid hassles. Of course, one is not required to display the normal State registration numbers; usually you just place a sticker in the specified location. That way any State inspector can verify your registration without having to confront the owner. 
Pete


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## prroots (Nov 13, 2010)

At some point in the future, I do plan to return the boat to the US; probably Florida. It's been my experience that if one has met the requirements of another jurisdiction (spelled State) for a minimum period of time, no sales/use tax is due when registering the boat in Florida. I did a bit of googling and came up with the following:


> Use tax is not due on boats brought to Florida if all of the following conditions are met:
> 
> * The owner has owned the boat 6 months or longer.
> * The purchaser has shown no intent to use the boat in Florida at or before the time of purchase.
> * The boat has been used 6 months or longer within the taxing jurisdiction of another state, U.S. territory, or the District of Columbia. Time spent in foreign waters does not count as part of the 6-month period.


This is exactly what I recall to be the situation. Of course, when I decide to return the boat to the US the laws may have changed and I will need to update the information at that time.
Pete


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## Minnewaska (Feb 21, 2010)

Did you specifically tell RI that you were going to fill in the Bahamas as your principal place of mooring? 

I haven't really followed the logic of needing state registration for a USCG documented boat, if you're never going to be in a state long enough to trip their requirements. I've never in my 36 years on the water, ever been asked for my registration when traveling from state to state, but haven't hit all that many, I guess.

It's occurred to me, however, that your dinghy can't be USCG documented and without any reg numbers on it, you could draw attention while in the US. When you document, you must identify your US hailport and you must put it on your transom, identifying it as a US vessel. Therefore, the dinghy needs to be registered somewhere. Is that the problem?

Good luck. It seems you are keeping the boat out of the country until the time passes that you no longer owe use taxes, even though the boat will be in the US temporarily, and are registering in a state you've never been to. You haven't made it clear, but its seems the address on your USCG documentation is going to be US (possibly the state you bought the boat in?). How about your insurance.

I think you're playing with fire, my friend, but you seem convinced of your plan.


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## catamount (Sep 8, 2002)

It might not matter, but just to be sure, you may want to make sure that the hailing port you paint on the stern and declare on your USCG documentation is someplace in the state (NH or RI) where you register the boat.

Some states have been known to search through the USCG documentation database and go after boats that have declared hailing ports in their state but that have not registered in their state.

It probably doesn't matter where the mailing address is, as long as it is in the US -- for example, maybe you will use the St. Brendan's Isle mail forwarding service, which is in Florida.


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## prroots (Nov 13, 2010)

catamount said:


> It might not matter, but just to be sure, you may want to make sure that the hailing port you paint on the stern and declare on your USCG documentation is someplace in the state (NH or RI) where you register the boat.
> 
> Some states have been known to search through the USCG documentation database and go after boats that have declared hailing ports in their state but that have not registered in their state.
> 
> It probably doesn't matter where the mailing address is, as long as it is in the US -- for example, maybe you will use the St. Brendan's Isle mail forwarding service, which is in Florida.


Thanks and good points. We will match up the hailing port of documentation with State we register in just to be consistent.

We just confirmed with someone very knowledgeable at the NH boat desk that:
1. can apply by mail
2. must register if in waters of NH >30 days
3. can use out of state address
4. the fee for a (hypothetical) 1990 40 ft sailboat is $155.06

Just fill out their form and mail it in with copy of license, bill of sale, and check for the fee; couldn't be simpler!
Pete


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## labatt (Jul 31, 2006)

If there is no "use tax" on boats in RI, why do you have to fill out a "use tax" return to register the boat? Rhode Island DEM - Boat Licensing FAQs


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## catamount (Sep 8, 2002)

Yeah, NH is pretty good (born and raised).

Just so you know, your hailing port for documentation purposes doesn't have to be an actual port, it just has to be a recognized physical place name. Some people wonder how I get my boat to Keene, NH (my hailing port) -- but that just happens to be where I live, not where the boat lives....

In your case, prroots, what about something like "Mount Washington, NH" (home of the previous world record wind)?


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## hellosailor (Apr 11, 2006)

labatt-
The URL you provided says "IF USE TAX IS APPLICABLE" and explains that "There is no sales tax on boats unless the boat was purchased prior to July 29, 1993. If sales tax is due, ".
Apparently RI _used to_ charge sales and use tax, but hasn't since 1993 and subsequent purchases are simply documenting the fact that they have been made after that date, that no tax is due.


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## omaho5 (Jun 5, 2008)

*Sales/use taxes*

Last summer, a chap by the name of Kerry [John, senator] tried these shennanigans with the boyz from Ma. 
He got bagged and created a little uproar in MA and RI.
If he cannot cheat, with all his pull, you think that you can ?
WE were out in N'tucket last summer... You should see his boat.


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## Minnewaska (Feb 21, 2010)

omaho5 said:


> Last summer, a chap by the name of Kerry [John, senator] tried these shennanigans with the boyz from Ma.
> He got bagged and created a little uproar in MA and RI.
> If he cannot cheat, with all his pull, you think that you can ?
> WE were out in N'tucket last summer... You should see his boat.


Exactly ! Why did this happen? Because he registered the boat in a state that he didn't actually keep it in and got caught.


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## ottos (Aug 12, 2008)

Minnewaska said:


> Exactly ! Why did this happen? Because he registered the boat in a state that he didn't actually keep it in and got caught.


I'm no fan of Mr. Kerry, but I remember it differently.

The way I remember, he bought and kept in RI, and as such was subject to RI taxes. Just like any of us have to pay taxes where we keep our boat.

YMMV


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## Minnewaska (Feb 21, 2010)

ottos said:


> I'm no fan of Mr. Kerry, but I remember it differently.
> 
> The way I remember, he bought and kept in RI, and as such was subject to RI taxes. Just like any of us have to pay taxes where we keep our boat.
> 
> YMMV


I believe he bought it in RI and had a slip in RI, but very often used it out in Nantucket (Massachusetts), where his wife's family has a home and he is a resident of Boston, Mass.

The snag he got into was that he called RI home for his boat, but Massachusetts was his primary cruising grounds. In other words, form does not trump substance, which I think will be the OPs problem.


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## lobstahpotts (Jan 1, 2011)

But the OP's primary cruising ground will not be in another state, it will be abroad. There's a key difference there that I think the state will recognize. They still have to register boats that will be traveling outside the US, one would assume there is procedure in place for such an occurrence.


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## hellosailor (Apr 11, 2006)

"one would assume there is procedure in place for such an occurrence."

You mean, like the federal policy for income tax?

"You live here, you pay here." Although folks keep saying there are ways to make your residency one of the insular possessions (i.e. Guam) so you retain US residency but can shop for more venues than the states.

Then there's probably a way to dodge things with a "contract for deed" or "contract for sale" where you don't actually buy the boat, you hold back the last dollar and the sale isn't made until some future date. Or, may not be made at all, in which case there's no tax due. Of course the seller may look askance at that, might need some incentive and protections, there's a wealth of opportunity to explore.

Hey, where'd those nifty gray coveralls come from?! 

I'm told that in any state, you can legally strip everything from the boat in order to buy "the bare hull" at a minimum value, while the sails, cushions, radio, etc. are sold as personal possessions with no value and exempt from sales and use taxes. The tax man may ask for a picture of the bare hull as proof, so someone's got to do some labor to do it that way.

And of course if the engine was non-functional and the bill of sale stated that, one would expect the taxable value of the boat to be substantially less, since all the "book" values accomodate that.


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## sailingfool (Apr 17, 2000)

prroots said:


> Thanks and good points. We will match up the hailing port of documentation with State we register in just to be consistent.
> 
> We just confirmed with someone very knowledgeable at the NH boat desk that:
> 1. can apply by mail
> ...


Pete,

I think you have the Florida tax consideration all wrong. You are proposing to throw $155 out the window on a pointless paper transaction that is not going to allow you to subsequently avoid paying your use tax in Florida.

If it were so simple, don't you think everyone would be doing it?

You might read the following:
http://dor.myflorida.com/dor/forms/2010/gt800005.pdf,
especially note:
"Use tax and surtax apply to taxable goods and services that you bring into Florida untaxed or taxed at a rate less than Florida's 6 percent rate. We allow a credit for lawfully imposed taxes paid to another state, a U.S. territory, or the District of Columbia." 
and 
"A boat that remains in Florida for more than 90 consecutive days or more than 183 days in a one-year period is taxable, unless it qualifies for another exemption."

The earlier reference you read offering an exemption meant if the other state TAXED you, there is an exemption equal to the TAXED amount, not a blanket exemption from Florida tax.

If you carry through this plan, other than wasting the NH fee, you will face Florida interest and penalties, in addition to the full tax, when you stand before some County tax agent laughing at your NH registration.

At the very least you should read the text of applicable Florida laws referenced at the bottom of the above article, or better yet, have a Florida attorney read them for you.


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## hellosailor (Apr 11, 2006)

"you will face Florida interest and penalties"
Ah, if he's planning to TAKE IT OUT OF THE US right after he buys it, or at least, within Florida's 90-day allowance, how will he face any Florida penalties? They only apply if he comes back to Florida, with Florida residency or something else to toll their taxes.
As long as he's planning to stay out of the US, buying in FL, registering in NH, and promptly scooting out of Florida's waters should keep him legally outside the reach of the Florida taxmen.
Unless I missed it, he _hasn't _said he's a Florida resident, which could change everything.


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## Minnewaska (Feb 21, 2010)

There is no problem to claim an exemption from FL sales taxes if the boat leaves Florida, to go anywhere for that matter. If he goes to another state, you pay their use taxes. If you leave the country, you pay whatever they want for a foreign boat to be in their territory for the long term.

The problem is this as I see it. The OP wants to return to the US and claim that the RI/NH registration shows that he owes no taxes because he already complied with their requirements. However, he was never there. Sending in paperwork and claiming this advantage is tax evasion. He also suggests that once he returns to FL after some period of time, he will no longer owe use taxes. That does not appear to be the case for FL residents, but a professional in FL would have to opine. 

In the end, I've not heard a credible reason for why the OP needs a state registration, which is why I'm concerned this is simply an elaborate scheme to try to avoid sales tax and get the boat back to FL after some statue of limitation passes. If that is the case, I do not think this will work. If he is buying and leaving the country and not coming back, its fine, but you also don't need a state registration for that.


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## sailingfool (Apr 17, 2000)

hellosailor said:


> "you will face Florida interest and penalties"
> Ah, if he's planning to TAKE IT OUT OF THE US right after he buys it, or at least, within Florida's 90-day allowance,
> As long as he's planning to stay out of the US, buying in FL, registering in NH, and promptly scooting out of Florida's waters should keep him legally outside the reach of the Florida taxmen.
> Unless I missed it, he _hasn't _said he's a Florida resident, which could change everything.


"how will he face any Florida penalties? They only apply if he comes back to Florida, with Florida residency or something else to toll their taxes." 
Precisely. When he brings the boat to Florida, and he expects to, after the waiting period, if he does not walk in and volunteer the use tax, when the County tax man does find him, he will owe the interest and penalties from the day he should have paid the use tax. The only difference for a Florida resident, is that there is no waiting period.
"As long as he's planning to stay out of the US, buying in FL, registering in NH, and promptly scooting out of Florida's waters should keep him legally outside the reach of the Florida taxmen."
I agree, but point out that registering in NH makes no difference, when he is out of Florida, or when he returns. It is an irrelevant sham, that alters the subsequent Florida use tax obligation not a whit.


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## Argyle38 (Oct 28, 2010)

prroots said:


> Quote:
> Use tax is not due on boats brought to Florida if all of the following conditions are met:
> 
> * The owner has owned the boat 6 months or longer.
> ...


If the above quote from the OP is true, then he would simply have to spend 6 months or so up in NH before heading back down in Florida. If he does that, say, six years from now there will be no question from Florida.

Look at it like this; if he simply lived in NH and they don't have sales or use tax, and kept his boat up there for 10 years, then retired down in Florida, would he then owe sales tax on something he has owned for 10 years? If so, this would make Florida more or less off limits to NH snowbirds!


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## GeorgeDog (Mar 11, 2010)

Argyle38 said:


> Look at it like this; if he simply lived in NH and they don't have sales or use tax, and kept his boat up there for 10 years, then retired down in Florida, *would he then owe sales tax on something he has owned for 10 years*? If so, this would make Florida more or less off limits to NH snowbirds!


If you move to Maryland then, yes, you would still have to pay Maryland tax even though you'd legally owned it for many years somewhere else. Many other states have the same law.


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## prroots (Nov 13, 2010)

sailingfool said:


> The earlier reference you read offering an exemption meant if the other state TAXED you, there is an exemption equal to the TAXED amount, not a blanket exemption from Florida tax.


Thanks for the feedback. It's my understanding that the quote and the exemption are independent of whether the other jurisdiction charges sales/use tax. I am not an authority on Florida taxes and in my case it does not apply since we have no near term plans to change our home port where we spend most of our time. I suggest that anyone wishing to change their registration to Florida simply call the appropriate government office. As previously stated, we do plan to cruise the East coast on occasion (without exceeding any State limitations) and we know from (actual) experience that there is less hassle if your boat is registered in a State regardless of whether you are USCG documented or not. The point of this thread was to determine the best State to accomplish same. We have determined that either RI or NH would work well. The registration fee in NH for a 40 foot boat is about 1/2 of RI so guess, all things being equal, that would be our choice. Thanks to all those who have made positive contributions. 
Pete


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## Minnewaska (Feb 21, 2010)

Argyle38 said:


> If the above quote from the OP is true


I think it is true. However, it applies to residents of other states, not Florida. In other words, if you live elsewhere, bought your boat more than 6 months ago and then come vacation or summer home in FL for longer than their registration period, that doesn't require you to pay their use tax. I thought I read that FL residents have to pay the difference between tax paid elsewhere (in the OP's case that is zero) and the FL rate.



> then he would simply have to spend 6 months or so up in NH before heading back down in Florida.


Not really, based upon the above, but this is the real evasion part. He's not going to ever be in NH.



> Look at it like this; if he simply lived in NH and they don't have sales or use tax, and kept his boat up there for 10 years, then retired down in Florida, would he then owe sales tax on something he has owned for 10 years? If so, this would make Florida more or less off limits to NH snowbirds!


Snowbirds, as I understand go back and forth for winter/summer, may still be NH residents. If you become a resident of FL and keep the boat there long enough to require FL registration, then I'm afraid the answer seems to be yes. When you register, which is directly with the tax authority in FL, they want documentation of the sales tax issue. I don't think this is as much of a problem for most, because you get a credit for what you paid another state already and you would pay on the current value of the 'use' asset, not the value of the asset you purchased 10 years ago. That's how I read what I've looked up anyway.

This has my attention, because I hope to do some long term stays in FL on the boat down the road. I did not pay sales tax in RI, but I'm actually in RI, my boat is kept at a slip in RI and on the hard in RI right now. Therefore, she registered there. I think I can spend 6 months in FL, which may require it be registered in FL as well, but would not owe use tax, under the section the OP describes. This is what the OP wants it to appear he is doing.


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## sailingfool (Apr 17, 2000)

Minnewaska said:


> ....
> This has my attention, because I hope to do some long term stays in FL on the boat down the road. I did not pay sales tax in RI, but I'm actually in RI, my boat is kept at a slip in RI and on the hard in RI right now. Therefore, she registered there. I think I can spend 6 months in FL, which may require it be registered in FL as well, but would not owe use tax, under the section the OP describes. ...


The OP really hasn't described anything other than "he thinks..." so I would not put too much weight on his musings.


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## Insails (Sep 6, 2006)

If you are worried about paying the sales tax ,how will you ever pay the yearly maintenance ?? Up keep cost a heck of alot more....This is one of those threads with no right answer)


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## lobstahpotts (Jan 1, 2011)

Insails said:


> If you are worried about paying the sales tax ,how will you ever pay the yearly maintenance ?? Up keep cost a heck of alot more....This is one of those threads with no right answer)


I think the issue is not the paying of the fee, the issue is when out cruising and not making income, every little bit counts so any amount one can save now will pay off and hopefully over time add up to an extended cruise.

If the tax was $200 and one managed to avoid it for 5 years while cruising, that's an extra $1000 for other costs such as upkeep, mooring and other fees, new equipment, etc etc or potentially an extension of the cruise for a while longer. Staying out sailing longer is one heck of a benefit, IMHO.


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## prroots (Nov 13, 2010)

lobstahpotts said:


> I think the issue is not the paying of the fee, the issue is when out cruising and not making income, every little bit counts so any amount one can save now will pay off and hopefully over time add up to an extended cruise.
> 
> If the tax was $200 and one managed to avoid it for 5 years while cruising, that's an extra $1000 for other costs such as upkeep, mooring and other fees, new equipment, etc etc or potentially an extension of the cruise for a while longer. Staying out sailing longer is one heck of a benefit, IMHO.


Well said. I like your attitude!
Pete


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## Minnewaska (Feb 21, 2010)

lobstahpotts said:


> ...If the tax was $200 and one managed to avoid it for 5 years while cruising, that's an extra $1000 for other costs.......


I get your point, but this math doesn't work. The sales/use tax is only due once and will be due upon return. Worst case, it is due with interest and penalties that will prevent the next cruise.

I'm sure the OP does not like my attitude. No offense intended. It just doesn't sound like it will actually work for you.


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## Insails (Sep 6, 2006)

Minnewaska said:


> I get your point, but this math doesn't work. The sales/use tax is only due once and will be due upon return. Worst case, it is due with interest and penalties that will prevent the next cruise.
> 
> I'm sure the OP does not like my attitude. No offense intended. It just doesn't sound like it will actually work for you.


agree..Sales Tax is a one time thing you would spend more time than the money is worth trying to avoid it....
property tax is a different story ..


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## lobstahpotts (Jan 1, 2011)

What comes to mind here in Maine is excise tax, which is actually fairly substantial. I do not know if this is an issue that would be encountered in NH, even though it is the next state over, but if it is anything like us then that will be a relatively large bit of cash annually. NH prides itself on having few taxes such as sales tax, but they make up for this by slamming you with the ones they have, like property taxes. A quick search of the NH site does not reveal any excise taxes, although by the definition on their site it would seem a boat technically falls under the property tax which is collected by the municipality. I would not imagine this is the case in practice, but something to check in more detail.


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## lobstahpotts (Jan 1, 2011)

And if the concern mainly is that the OP will never be in NH, may I suggest that on their cruise they plan to spend an amount of time in NH and keep records of that time such as receipts from marina, etc. Then he is no different than any other boat from NH that sails abroad for extended periods of time, as persons cruising don't tend to have much in the way of property to begin with. Even if one keeps a house and rents it out, one is not technically the occupant and is thus not resident there, so every other NH cruiser theoretically has this issue...


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## prroots (Nov 13, 2010)

lobstahpotts said:


> What comes to mind here in Maine is excise tax, which is actually fairly substantial. I do not know if this is an issue that would be encountered in NH, even though it is the next state over, but if it is anything like us then that will be a relatively large bit of cash annually. NH prides itself on having few taxes such as sales tax, but they make up for this by slamming you with the ones they have, like property taxes. A quick search of the NH site does not reveal any excise taxes, although by the definition on their site it would seem a boat technically falls under the property tax which is collected by the municipality. I would not imagine this is the case in practice, but something to check in more detail.


Good point and thanks. I better check into that. It could influence my choice of NH vs RI. I'll call one or more town clerks today and report back.
Pete


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## prroots (Nov 13, 2010)

lobstahpotts said:


> What comes to mind here in Maine is excise tax, which is actually fairly substantial. I do not know if this is an issue that would be encountered in NH, even though it is the next state over, but if it is anything like us then that will be a relatively large bit of cash annually. NH prides itself on having few taxes such as sales tax, but they make up for this by slamming you with the ones they have, like property taxes. A quick search of the NH site does not reveal any excise taxes, although by the definition on their site it would seem a boat technically falls under the property tax which is collected by the municipality. I would not imagine this is the case in practice, but something to check in more detail.


Good news! I just called the main government office in Concord, NH. They told me that the registration fee is all inclusive ie, there are not other taxes due. Thanks again
Pete


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## prroots (Nov 13, 2010)

lobstahpotts said:


> And if the concern mainly is that the OP will never be in NH, may I suggest that on their cruise they plan to spend an amount of time in NH and keep records of that time such as receipts from marina, etc. Then he is no different than any other boat from NH that sails abroad for extended periods of time, as persons cruising don't tend to have much in the way of property to begin with. Even if one keeps a house and rents it out, one is not technically the occupant and is thus not resident there, so every other NH cruiser theoretically has this issue...


Thanks. We have no definite plans to cruise any specific State, but would like to have that option. Both the NH and RI government offices have clearly stated that there are no requirements to spend any minimum amount of time in their State. Other contributors to this thread have not understood this and if they are still under this mistaken belief they should contact the appropriate government office rather than relying on my research. Summary: this is a non-issue!
Pete


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## Bene505 (Jul 31, 2008)

Follow the laws in each place you are. You don't have to pay any extra tax no matter how much you get cajoled on an internet forum. Just follow the laws. They are written very specifically (often to create loopholes for influential voting blocks and influential people). Follow what the laws say. 

From the above quote on FL law, you can always go to the Bahamas every 90 days or have your boat hauled to get you out of FL waters. Save your Bahamanian fuel receipts and haulout receipts because a dutiful officer will check out a boat that's been in the harbor for a couple of years without a FL registration sticker. You may find that it's a pain in the butt to do this and want to pay the sales tax anyway.

Some places require state registration even if you are documented. (I think they can do that because they were chartered before the US was established. Not sure.)

If you come from being overseas (or another state) and can prove it, I'd guess that you wouldn't get any penalties for not registering in FL when you had no intention of being there.

.

We are pretty well and thoroughly taxed. Chance are you aren't in a lot of influential voting blocks to get your own custom loopholes. And if you are asking these questions you aren't wealthy enough to hire your own lobbyist either. What I'm trying to say is that asking these questions and acting acordingly is moral, ethical and legal. Good job. Follow what the law says

Regards,
Brad
Not a lawyer or tax accountant. Don't know all the laws, there may be others that negate what I just typed. Never boated in Florida... yet.


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## sailingfool (Apr 17, 2000)

prroots said:


> ...Other contributors to this thread have not understood this and if they are still under this mistaken belief they should contact the appropriate government office rather than relying on my research. Summary: this is a non-issue!
> Pete


Pete,

The non-issue in the thread is the whole idea of registering a boat in NH or RI or any state or not, relative to the obligation to pay a use tax when you subsequently keep the boat in Florida.

Yes, the state registration is a non-issue... relative to that obligation. That tax obligation $$$...well now, that is an issue!


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## prroots (Nov 13, 2010)

Bene505 said:


> Follow the laws in each place you are. You don't have to pay any extra tax no matter how much you get cajoled on an internet forum. Just follow the laws..


Well said, I agree. Take the wild, unsupported speculation you find on this thread with a grain of salt and verify everything.


Bene505 said:


> Some places require state registration even if you are documented. .


Very true. In the few States I'm familiar with the State could care less whether you are documented or not except to waive the placement of State registration numbers.


Bene505 said:


> If you come from being overseas (or another state) and can prove it, I'd guess that you wouldn't get any penalties for not registering in FL when you had no intention of being there..


Absolutely, provided you don't overstay their 90 day limit. 


Bene505 said:


> What I'm trying to say is that asking these questions and acting accordingly is moral, ethical and legal. Good job. Follow what the law says


Absolutely; excellent advice. Thanks for your post.
Pete


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## prroots (Nov 13, 2010)

sailingfool said:


> Pete,
> 
> The non-issue in the thread is the whole idea of registering a boat in NH or RI or any state or not, relative to the obligation to pay a use tax when you subsequently keep the boat in Florida.
> 
> Yes, the state registration is a non-issue... relative to that obligation. That tax obligation $$$...well now, that is an issue!


I guess I don't understand your post. My original post had to do with trying to find the best State to register the boat so as to avoid sales tax in the case where ones home port will be outside the USA. In the post you quoted, we merely wanted to indicate, contrary to what others have posted, that in NH and RI there is no minimum time you must be in their State in order to legally register there. This is the non-issue I referred to. I have no interest in how one would relocate to Florida at this time and, therefore, have not researched that issue. We do hope to cruise the East coast, but will be careful not to exceed the time limits of any State. If others have an interest in relocating to Florida, I suggest they contact the applicable Florida tax people (and perhaps start a new thread on that issue).
Pete


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## Bene505 (Jul 31, 2008)

SailingFool,

Can you say more about the use taxes? I'm considering keeping our boat in FL either next winter or the winter after that. We'll take a couple weeks of vacation in the Bahamas. We won't hit the "90 consecutive days" registration requirement. Is there another duty or fee or something that we will have to pay? Who do we pay it to?

Regards,
Brad


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## Minnewaska (Feb 21, 2010)

Oh boy. pproots, you are hearing what you want to hear. I don't think anyone has said you have to stay in a given state for any period of time to voluntarily register there. The problem is that you have indicated you will use that registration as proof that you've already complied with that state's sales tax laws, therefore, will not be required to pay FL use tax upon your ultimate return.

That's the fraud. You were never actually in your registered state, you just mailed in a registration fee. It isn't whether that state will accept the registration. You may be confused, because some of us are surprised they will accept it, if you fill in a primary port outside of their state. Nevertheless, that isn't the tax point.

Go find a professional tax accountant in FL. The rest of us have no actual skin in this game, whether you like what some tell you or not. You're playing with fire.


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## Bene505 (Jul 31, 2008)

prroots said:


> Well said, I agree. Take the wild, unsupported speculation you find on this thread with a grain of salt and verify everything...


Yes. As I'm sure you realize, you only get really good answers when you listen to people that disagree with you and when you consider what they are saying. All the respondants here are volunteers, giving of their time to tell you what they think. There are some things written here that lead me to wonder if there's more to it. It's actually priceless and amazing, and I'm glad I got to see this thread and many others like it in action.

Oh, and I could be completely wrong too. It's not what I do for a living. And if I got this one right, I may very well get the next one wrong. But as a community we seem to muddle through fairly well.

Regards,
Brad


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## sailingfool (Apr 17, 2000)

Bene505 said:


> SailingFool,
> 
> Can you say more about the use taxes? ..


Brad,

The subject of use taxes has been well covered over the years. If you want, start with these threads:

http://www.sailnet.com/forums/boat-review-purchase-forum/12413-tax-boats-brought-florida.html

http://www.sailnet.com/forums/boat-...about-nj-registration-uscg-documentation.html


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## sailingfool (Apr 17, 2000)

prroots said:


> I guess I don't understand your post. My original post had to do with trying to find the best State to register the boat so as to avoid sales tax '...
> Pete


Gee Pete, 
I thought YOU gave this thread the title "*Avoiding sales tax on purchase of used boat" *and opened with the question: "It looks like I may be buying a used sailboat in Florida. We will be living aboard outside the US. Where would be the best place to register boat to avoid sales tax?". I guess I thought the subject was avoiding taxes not state registration. wihile you may have a found a state (NH) you can register your boat in, it'll do nothing for avoiding the sales tax...so who cares?


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## Minnewaska (Feb 21, 2010)

sailingfool said:


> .....wihile you may have a found a state (NH) you can register your boat in, it'll do nothing for avoiding the sales tax...so who cares?


Exactly the point. If he was just moving out of the country, this would be a non-issue. When he returns to FL, he's trying to make it appear like he is from RI/NH.


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## prroots (Nov 13, 2010)

sailingfool said:


> Gee Pete,
> I thought YOU gave this thread the title "*Avoiding sales tax on purchase of used boat" *and opened with the question: "It looks like I may be buying a used sailboat in Florida. We will be living aboard outside the US. Where would be the best place to register boat to avoid sales tax?". I guess I thought the subject was avoiding taxes not state registration. while you may have a found a state (NH) you can register your boat in, it'll do nothing for avoiding the sales tax...so who cares?


It took me a few minutes to understand the point of your post; I'm still not sure I do! It is true that we could simply export our boat from wherever purchased and never return. In that case, there would be no need to pay sales/use tax nor register in any State. However, that is not our plan. Our plan is to spend the majority of our time at our home port outside of the US and also cruise the East coast (without overstaying our welcome in any one State) and we have found, as previously mentioned, it is best to have your boat registered in some State while doing so. We believe that in this circumstance we are free to choose the State that offers the best tax advantage to us in terms of both sales/use tax and annual registration fees. Based upon our research, both RI and NH require you to register there if you exceed a time limit, but neither requires a minimum period. Would you believe the maximum time limit in NH is only 30 days? This fits exactly with our plan. Rest assured that we will research our every move to be sure we operate well within the law. Tax avoidance is legal and plain smart; tax evasion is illegal and plain dumb. We feel that we now have a good plan and will close with this post. Thanks again to all those who have made a positive contribution.
Pete


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## hellosailor (Apr 11, 2006)

A lot of folks keep assuming prroots is a Florida resident. He's never said that.
If he's not resident or domiciled in Florida, he is NOT LIABLE for Florida sales tax as long as the boat gets out of Florida and is registered elsewhere in a timely manner.

Yes, it can be that simple and legal to AVOID the tax.

On the other hand, he could be a Martian talking his boat back to Mars, and if he buys it in Florida and stays there 91 days, he'll still owe Florida sales tax.

"From the above quote on FL law, you can always go to the Bahamas every 90 days or " Uh-uh, gotta read the rules. In some states, you trigger registration laws by keeping a motor vehicle in the state for 90 days in a row. In Florida, if you keep it there for 183 days in any calendar year--it doesn't matter how many wre in a row. Many states use criteria like "183 days in any year" to trigger taxes and other jurisdictions.

Others, like NY, do not require boat registration unless the boat is actually "in the navigable waters" for 90 days in a row. Haul it overnight every 89 days to scrub the bottom, and you can _register _it wherever you please. Taxes? That's something else again. Depends on who owns you.


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