# Use Tax / Documented Vessels?



## mikehradecky (Jan 24, 2011)

Are documented vessels exempt from county and/or state use taxes? 

We bought our boat in 08 and have not received any bill from the county or state. We paid sales tax when we bought her.

If we don't report to the state or county can we continue to fly under the radar?

When we sell, will be be forced to pay back taxes and penalties?


----------



## labatt (Jul 31, 2006)

It's all dependent on the county or state - every one is different. It appears as if you're in CA and if that's the case then your requirements are listed here: FAQ - Use Tax on Purchases of Vehicles, Vessels, Aircraft - Board of Equalization (fairly easily found using a google search for "state boat sales and use tax california").


----------



## Minnewaska (Feb 21, 2010)

Check with your state. Being documented will have nothing to do with whether you owe them use taxes. USCG documentation is your form of title only, as opposed to a state title. Many, if not most, states require you register with them anyway if you keep the boat there. If you are documented, you don't need to display state registration numbers.

It seems like you bought the boat out of state. If so, most states also give you credit for sales taxes you paid elsewhere against the use taxes you might owe them. If there were a small balance due, it would make much more sense to pay it than run up the penalties too. Eventually, an inspector shows up at your marina and takes down names. In some states, the marinas themselves are required to list any vessel on their premises for more than a period of time.


----------



## hellosailor (Apr 11, 2006)

Mike, you really need to do some local research.
"We paid sales tax when we bought her."

In the US, "use tax" is what is levied on folks who have not paid sales tax because they bought a big ticket item out of state, or other specific situations. As documented online by your state tax authorities.

Normally if you paid sales tax you have no concern with use tax, unless you crossed state lines at some point in the process.

However, if you are in a state that did not require you to register the boat, and that normally collects sales tax only during registrations or by self-payments...If you didn't pay something that you were supposed to pay, generally the penalties, fines, and interest are levied all the way back to the date of purchase.

Check the rules for your state. Online if you can. In person or by phone if you can't find them online. And then get them documented and confirmed, don't just think some clerk on the phone really knows, because if they're wrong, you'll still owe the tax. Written confirmation is best.

If you boat the boat through a broker, usually they are required to collect and forward applicable taxes, so that all may have been done for you.


----------



## capttb (Dec 13, 2003)

They will catch up to you eventually, they check DMV records etc. I sold my boat last June and just received annual notice from assesor. They asked if I still owned on Jan. 1 and if not I had to send copies of bill of sale etc. Even after owning and paying taxes on my last boat for several years they discovered they missed the first year and added interest to the bill.


----------



## windward54 (Apr 12, 2000)

I see that you are in California..

In California, the owner of a boat on January 1st, documented or otherwise owes the personal property taxes. On a documented boat, you will get a letter from the county where you keep your boat, requesting information. The County Tax Assessor will then send you a bill, payable in full and due no later than August 31st. 

The Assessor's Office has dock walkers to check on marinas. Los Angeles County is very active, others might not be as active. Bottom line is some day they will catch up to you.


----------



## mikehradecky (Jan 24, 2011)

When they catch me, then I will pay the taxes. Until then, I'm sticking it to the man.

Hopefully, our harbor master won't let the assessors on our docks.


----------



## hellosailor (Apr 11, 2006)

Oh, mike, you may be in for a rude surprise. Harbor masters MUST allow the tax men access to the docks, and they've long learned not to obstruct government officials on official business.


----------



## Tim R. (Mar 23, 2003)

Even if you do not owe it in your state, other states may impose the tax on you. If you did not pay sales tax in your state and bring the boat to Maine and stay here more than 30 days, you will owe Maine 5% of the purchase price.

This applies to both boats and planes and they have been catching people.


----------



## travlin-easy (Dec 24, 2010)

Tim,

The same rule applies here in Maryland. Try to skip out on paying the tax and they'll levy all kinds of nasty fines and penalties on top of the tax. 

Gary


----------



## Minnewaska (Feb 21, 2010)

mikehradecky said:


> When they catch me, then I will pay the taxes. Until then, I'm sticking it to the man.
> 
> Hopefully, our harbor master won't let the assessors on our docks.


You're funny. If you don't have a better plan than that, you will owe several times the tax by the time they catch you.


----------



## Tim R. (Mar 23, 2003)

Mikehradecky, consider that you are boasting about not paying your fair share which affects the rest of us taxpayers who have complied. Also consider that your comments incriminate you and there may be some folks lurking or even members who work for "The Man". Not too smart.


----------



## dhays (Jul 9, 2010)

treilley said:


> Mikehradecky, consider that you are boasting about not paying your fair share which affects the rest of us taxpayers who have complied. Also consider that your comments incriminate you and there may be some folks lurking or even members who work for "The Man". Not too smart.


Well, to be fair.... Mike not paying his share of taxes in CA will not affect our taxes or services in either Maine or Washington State. That is unless CA goes completely under and is successful in getting bailed out by the Federal government. If I was a CA resident however, I'd be pissed.

Since sales tax was paid when the boat was purchased, I doubt you have any use tax owing in CA. I don't know if CA has a personal property tax on items such as boats though.


----------



## capttb (Dec 13, 2003)

I'm a California native but I'm not pissed because I know that the taxman cometh. And I am referring to personal property taxes which are annual and based on the value of your vessel. The "use tax" paid at time of purchase is at the same rate as "sales tax", somekind of tax semantics.
I even get to pay "possesive interest tax" which is personal property tax on the square footage of water surface I RENT from the county.


----------



## glassdad (Feb 21, 2009)

The personal property tax is 1% of value or purchase price. If you can afford to buy the boat, you can afford to pay the tax. No, i don't like paying taxes but that is the cost of owning the boat. If the state has no money, they can't dredge the harbor entrance or keep the channel clear.


----------



## GeorgeB (Dec 30, 2004)

Mike, As you should already know, California is a personal property tax state. The tax is collected by the county. It is calculated off of the purchased price (from the sales tax calculation) or assessment, which ever is greater. Frankly, I’m surprised they haven’t got to you yet. The counties get the registration records from the state, so I’m surprised you haven’t got a bill from Butte county. The second way they get you is the assessors DO walk the docks, and your harbormaster DOES provide them with your mailing address so they can send you the bill. In the first year of ownership, expect two bills if you reside in a different county than your boat. It is up to you to straighten out the double dipping (personal experience on two boats). It’s only a matter of time when you come down to your boat and find it chained to the dock awaiting a sherriff’s auction (a friend bought his boat that way). Good luck. Be thankful you are in Marina Bay and not a municipal marina. They have the gaul to send you a tax bill for the slip (imagine paying property tax for water!).


----------



## BELLATRIX1965 (Jan 2, 2007)

Mike - don't know about California, but here in Maine we have to pay an annual boat "excise" tax, even if the vessel is documented. It's basically the same thing as the excise tax on a car - and the tax money stays local - in the case of boat excise, it pays to operate our public docks / harbor. In the big scheme of boat ownership, it's small potatoes, and it keeps our harbor up and running (town docks don't get pulled / launched / maintained for free!). If you don't pay, you are putting the cost on your neighbors!


----------



## Dfok (Apr 11, 2010)

I believe in the "common weal" and certainly support paying for public docks, the Coast Guard placing buoys and rescuing folks, conservation efforts and a whole lot of other stuff that has to happen. 
I live in Pennsylvania, have a boat in Maryland (registered and sales tax paid to....I don't know, someone wanted tax so I paid it........) I have insurance and try within reason to follow all the rules without going far out of my way to follow rules I have no idea exist.
Please someone tell me I don't owe a "use tax" anywhere I use my boat outside of where it is registered. 
As I understand it ( and truth be told my eyes glazed over 15 seconds into the explanation) I paid MD so PA is happy - EXCEPT!! if I bring my boat to PA and stay either:
a) 30 days
b) till someone notices me
c) the new governor discovers the state has a deficit.
Paraphrasing Waylon Jennings on Willie Nelson - If I owe the gov't a hundred dollars I have a problem - if I owe the gov't ten thousand dollars they have a problem.
Obviously being on Sailnet Forum we are all intelligent,reasonable, most likely good looking and for the most part law abiding folks. It ain't fun but I guess for the most part we pay our taxes and our fair share. 
But geez it stinks to try to do right while harboring a suspicion that no matter what you do you are somehow, someway, somewhere wrong.


----------



## capttb (Dec 13, 2003)

I've only been taxed by the county where the boat is berthed.


----------



## TakeFive (Oct 22, 2009)

Dfok said:


> ...I live in Pennsylvania, have a boat in Maryland (registered and sales tax paid to....I don't know, someone wanted tax so I paid it........)...Please someone tell me I don't owe a "use tax" anywhere I use my boat outside of where it is registered.
> As I understand it ( and truth be told my eyes glazed over 15 seconds into the explanation) I paid MD so PA is happy - EXCEPT!! if I bring my boat to PA and stay either:
> a) 30 days
> b) till someone notices me
> ...


You're actually in better shape than that. I live in PA and keep my boat here, but I was considering keeping her in MD, so I spoke to both states about reciprocity. (I think the person in MD who I spoke to was the "chief" of the department for the entire state.) If you move to PA someday and you have paperwork to prove you paid sales tax to MD, you will only owe the difference in tax rates. If you paid 6% to MD and PA's rate is 6%, you will owe no sales tax. If you paid 5% to MD and PA's rate is 6%, you will owe 1%. There should be no interest or penalty so long as you pay within 30 days of moving to PA.

The people in both states told me horror stories you hear are typically people who clearly evaded/delayed/lied in order to avoid paying, and they ended up paying huge interest and penalties as a result. If the horror stories sound grossly unfair to the boat owner, chances are the boat owner is leaving out some key details to slant his story in his favor. All states are cracking down, but I still believe that they are not out to burn people who are fundamentally honest and who act in good faith. You appear to have done that so far. I am less impressed with the OP, though.


----------



## Minnewaska (Feb 21, 2010)

Dfok said:


> ....Please someone tell me I don't owe a "use tax" anywhere I use my boat outside of where it is registered......


Sorry, you technically do and it really pisses people off. As you noted, however, most states only require it after you've "used" the boat in their state for an extended period of time and typically only ask for any excess in their rate over what you already paid another state, if their is an excess. How long that time period is will vary greatly by state.

I'm told, in Massachusetts, the marinas are required to report any vessel that remains on their dock/mooring for more than two weeks. That probably gets the ball rolling to see if you trip their actual use tax period. I'm not sure what that is exactly.


----------

