# Boat Ownership and Taxes



## midwesterner (Dec 14, 2015)

I hope to be in a position to purchase a boat soon. I will be semi-retired and will be able to live aboard and sail for part of the year.
I live in the Midwest and whatever boat I buy, wherever I buy it, will never set foot (or hull) in my home state. 

I've scoped out marinas where I might make a home for my boat. I'm sort of favoring the central east coast (Georgia or the Carolinas, possibly Virginia, Maryland or Delaware for second choices) because it would give me the option to easily sail north to New England or south to the Keys or Bahamas and follow the most favorable weather. I've also looked at some boats on the Gulf Coast and scoped out marinas in Texas, Louisiana, and on the Florida panhandle as home port options for a while. 

I'm wondering what the personal property tax situation for boats is in each of these states. If I had a boat licensed in my home state, I would pay $300 to $500 annually in taxes.


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## kd3pc (Oct 19, 2006)

while not a true "personal property tax", MD taxes (yearly use) can be quite high on something big enough to live on, and their laws on what constitutes "their" taxable property is pretty rotten. X number of days boat is in MD, gives them the power to harrass you, the boat owner, to pony up the difference between your home port (where ever that may be) and what they dictate. They have the same mentality on sales tax...check closely before you commit to living there. Then there are the license fees, separate from the above.

Some counties in VA, since it is a personal property tax state, assess no tax on boats, while others are quite high. Sales tax used to be capped, circa 2008, not sure about the details on that in current years. On my Passage 42, slipped in Northumberland County personal property tax ran a bit over $1K yearly. And they do hire people to walk marinas and identify to the county, boats from out of county and out of state. If your boat is documented, in many counties you do not need to pay for state registration/license.


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## travlin-easy (Dec 24, 2010)

Maryland doesn't really have a personal property tax on anything, though we do have a real estate tax on homes, which has absolutely nothing to do with boats. Now, when you bring a boat to Maryland and register it, there is a tax, that is pretty much a sales tax. However, Maryland has a reciprocity agreement with many states when it comes to this. In some situations, if you have already paid the tax in your state of purchase or residence on the boat, and it is equal or greater than the Maryland tax, then you don't have to pay it again.

There is an annual registration fee of $12 for all boats other than canoes and rowboats, that is paid semi-annually. The most difficult part about your task if finding a live aboard marina at a reasonable price.

Good luck,

Gary


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## sweepint (Jan 10, 2014)

Not to high jack the thread but if the boat was USCG Documented would there still be a tax other than maybe a one time sales tax if purchased in a state that it is staying in?


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## Minnewaska (Feb 21, 2010)

To assess this situation, one needs to fully understand these separate taxes:

Sales tax
Use tax
Property tax
Registration fees

They are assessed differently for each State, with some granting an offset, if you've already paid another. The one common denominator is they are only due in the State where the boat is actually present. Each state defines how long the boat needs to be present, before these are due. Whether you title the boat with USCG documentation or a State Title, makes no difference. Taxes are due where the boat resides. Of course, there are states that don't have some of these taxes/fees at all. However, to take advantage of that, you have to actually keep your boat there, which is the reason they are being competitive in the first place. RI, for example, has no sales/use tax on boats. They do have bi-annual registration fees and RI property taxes only apply to individuals who are residents.


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## denverd0n (Jun 20, 2008)

Florida... No annual property taxes. Registration required after 90 days, with a very reasonable annual fee (less than $200 per year unless you own a mega-yacht, about $30 per year if your boat is an "antique"). Sales tax is 7%, with a cap of $18k.

And, no, Coast Guard documentation generally has no bearing on the four different kinds of taxes that Minnewaska mentioned.


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## Ulladh (Jul 12, 2007)

Delaware has no sales tax on boats and annual registration is between $10 and $60 depending on length of boat.

But if the boat is in another state for more than 60 or 90 days depending on the state, sales tax, registration fee and possibly other taxes and fees will be due.

I would suggest select the area you desire to cruise, then investigate the costs both for taxes, fees and living expenses. The cost of taxes may not be as critical as other living expenses.


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## basssears (Nov 8, 2010)

This is probably a state by state thing, but in my experience in Washington State documentation makes no difference in taxation. If my boat is going to "reside" in Washington State (even though I'm an Idaho resident) for most of the year (can't remember exact number of days), it needs to be registered in Washington, I paid sales tax on it in Washington, and I pay my annual Washington excise tax on it too.

Only difference (again, states surely vary) w/documentation as far as state of Washington is concerned is I am not required to post state registration numbers and stickers on the boat, just follow the USCG documentation regs.



sweepint said:


> Not to high jack the thread but if the boat was USCG Documented would there still be a tax other than maybe a one time sales tax if purchased in a state that it is staying in?


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## midwesterner (Dec 14, 2015)

Ulladh said:


> I would suggest select the area you desire to cruise, then investigate the costs both for taxes, fees and living expenses.


I've already done that. I've identified suitable marinas in Georgia, North and South Carolina, Virginia, Maryland and Delaware. I would prefer to not be farther north than Dover Delaware due to cold winters and not farther south than Savannah Georgia due hot summers. And from any of those locations, I can cruise most any place I want.

So, my question is: Which state among Georgia, North and South Carolina, and Virginia, have the most favorable tax situation for 30 to 33 foot sailboats?

However, If I found the boat of my dreams somewhere along the Gulf Coast, I would probably keep it in the Gulf for the first year or two as I gain more sailing experience and get accustomed to the boat. Then I might sail it out of the Gulf and up the east coast. 
I have found suitable marinas in Texas, Louisiana and Mississippi and would like to know the comparative tax costs of those states.

Thanks,


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## Minnewaska (Feb 21, 2010)

Don't be confused by this. Interstate commerce laws prevent States from assessing taxes, unless they can establish the transaction or usage within their boarders. In fact, if you simply trailer your boat through your home state, to get to it's permanent marina, it is specifically exempt from the State having any right to tax. Otherwise, all road and rail transportation would be taxable in every state they crossed. 

That said, most States are looking for the cheaters vigorously. They will check every single USCG documentation mailing address and, if they find an address in their state, they will send you a letter asking for their taxes. Assuming the boat was never there, you just have to prove it, with your bill of sale, marina rentals, etc. Be sure to keep them all. BTDT.

Further, the waiting periods, as mentioned, in the various State's, are often immediate, if you do in fact use or buy your boat in your home state. The waiting periods, which are most typically around 90 days, only apply to residents of other states to accommodate transients.


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## caberg (Jul 26, 2012)

midwesterner said:


> So, my question is: Which state among Georgia, North and South Carolina, and Virginia, have the most favorable tax situation for 30 to 33 foot sailboats?


Relative to your annual total budget for cruising, eating, boat repairs, marina costs, etc., I can't imagine the annual state taxes/fees could make enough difference to pick one state over another.


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## Ulladh (Jul 12, 2007)

If you are going to keep the boat in the state of purchase or an adjacent state, then that state gets sales tax and registration fees.

Move to another state for more than the minimum transient time 60 or 90 days, that state gets registration fees and difference between the original sales tax and their sales tax if greater.

So other costs of living become more important; slip or mooring fee, food, entertainment, repair costs, land and air travel....


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## Minnewaska (Feb 21, 2010)

caberg said:


> Relative to your annual total budget for cruising, eating, boat repairs, marina costs, etc., I can't imagine the annual state taxes/fees could make enough difference to pick one state over another.


Well, that depends entirely on what you paid for the boat.


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## travlin-easy (Dec 24, 2010)

If you do not have a bill of sale, Maryland assesses your tax on the blue book value of the boat.

Gary


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## fallard (Nov 30, 2009)

travlineasy said:


> If you do not have a bill of sale, Maryland assesses your tax on the blue book value of the boat.
> 
> Gary


Here in CT, I was required to provide a copy of the check provided to the seller because the bureaucrats didn't believe the price on the bill of sale.

I bought the boat on the west coast of FL and did some commissioning work there before bringing sailing her 1700 miles home to Mystic. I bought fuel in Beaufort, NC, and mailed the receipt and a cover letter to FL to provide evidence that it had been removed from FL in a timely fashion, but--2 weeks later--when I arrive in CT, I had a dunning letter from FL that had crossed in the mail. So, be aware that some states can be very diligent in their enforcement of fees.


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## sailpower (Jun 28, 2008)

denverd0n said:


> Florida Sales tax is 7%, with a cap of $18k.


FL sales/use tax is 6% capped at 18k.

Some counties have a tiny tax on the first 5k of value. Broward County does not.


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## scratchee (Mar 2, 2012)

I may be missing something, but I live in Maryland and have not felt the need to gripe about any taxes or fees related to my 27-foot sailboat. The only tax I have paid is the sales tax when I purchased it in Maryland, and a pretty reasonable annual registration. If you purchase out of state and bring the boat into Maryland, excise tax (sort of like retro-sales tax) is due, but in some situations you can get credit for taxes paid elsewhere. I'm not sure what they do if you bring the boat into the state multiple times over the course of several years.

If you choose Maryland as a home port, I don't think the taxes would be an issue as long as you plan the purchase so as not to pay taxes twice (easiest way being to buy it in Maryland).


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## denverd0n (Jun 20, 2008)

sailpower said:


> FL sales/use tax is 6% capped at 18k.
> Some counties have a tiny tax on the first 5k of value. Broward County does not.


Most counties that I'm aware of add 1% to the state's 6%, which is why I said 7%. Of course, you are right and I was over-simplifying. The state tax rate is 6%, and counties can add up to 1% additional, though not all do. I'm actually quite surprised that Broward County does not--I always got the impression that they never missed a chance to tax or regulate anything they could.


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## sailpower (Jun 28, 2008)

denverd0n said:


> Most counties that I'm aware of add 1% to the state's 6%, which is why I said 7%. Of course, you are right and I was over-simplifying. The state tax rate is 6%, and counties can add up to 1% additional, though not all do. I'm actually quite surprised that Broward County does not--I always got the impression that they never missed a chance to tax or regulate anything they could.


The link below shows you the discretionary surtax rates by county.

As you can see at the bottom of the form these rates only apply to the first $5,000 of the sale amount so the total final % is determined by how much the boat costs.
http://dor.myflorida.com/Forms_library/current/dr15dss.pdf


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