US State taxes


Paul Cooper <paul.cooper74@...>
 

Hello Amelians,

We have been planning on sailing our boat-- purchased from a French owner-- to the US.  I am concerned about being hit for a large state sales tax if we leave the boat in one place (Maryland) for 2-3 months.  

Anyone know the lowdown on this and how to avoid paying a huge tax?

thanks in advance,

Paul
SM238 Maracuya
Caribbean


Thomas Peacock
 

As the lawyers say, it depends. Where is the boat officially registered? US, or still France? Are you planning on getting US registration? Are you a US citizen? If so, in which state do you officially reside? 
As you have probably heard, Maryland can try to enforce collection of state taxes (I believe 6%). The state actually has unofficial “spies” who report vessels registered in other states but which are kept in Maryland. The main reason for this is that Delaware, which abuts Maryland, has no state tax. A lot of people would register the boat in Delaware, but keep it in Maryland. In fairness, Maryland spends a lot of money on upkeep of the Chesapeake, and pays a lot of wages to drawbridge operators. 
That said, 2 to 3 months should be ok. If the boat is not registered in the US, you should be ok. Anything else gets a little gray, or maybe even black. 
Either way, enjoy the Chesapeake, it is a unique wonder. 

Tom Peacock
Aletes SM 240
St Augustine, Florida (but registered in Maryland)


On Mar 3, 2019, at 6:28 AM, Paul Cooper via Groups.Io <paul.cooper74@...> wrote:

Hello Amelians,

We have been planning on sailing our boat-- purchased from a French owner-- to the US.  I am concerned about being hit for a large state sales tax if we leave the boat in one place (Maryland) for 2-3 months.  

Anyone know the lowdown on this and how to avoid paying a huge tax?

thanks in advance,

Paul
SM238 Maracuya
Caribbean


Mark Erdos
 

Paul,

 

Impossible to answer this without details of where the boat is registered. Is it USA or foreign flagged? Are you a resident of the USA?

 

 

 

With best regards,

 

Mark

 

Skipper

Sailing Vessel - Cream Puff - SM2K - #275

Currently cruising - Santa Marta, Colombia

www.creampuff.us

 

From: main@AmelYachtOwners.groups.io [mailto:main@AmelYachtOwners.groups.io] On Behalf Of Paul Cooper via Groups.Io
Sent: Sunday, March 3, 2019 7:29 AM
To: main@AmelYachtOwners.groups.io
Subject: [AmelYachtOwners] US State taxes

 

Hello Amelians,

We have been planning on sailing our boat-- purchased from a French owner-- to the US.  I am concerned about being hit for a large state sales tax if we leave the boat in one place (Maryland) for 2-3 months.  

Anyone know the lowdown on this and how to avoid paying a huge tax?

thanks in advance,

Paul
SM238 Maracuya
Caribbean


Mark McGovern
 

Paul,

In Maryland you pay the sales tax when you register the boat with the Department of Natural Resources (DNR).  The following is copied directly off the Maryland DNR website:

Your vessel, whether commercial or recreational, must be registered in Maryland if it is:

  • Equipped with any kind of primary or auxiliary mechanical propulsion; and
  • Used in Maryland most in a calendar year.

So as long as you can prove you use the boat somewhere else more than Maryland during the calendar year you do not have to register the boat in Maryland and thus, you won't have to pay the tax in Maryland.

Link here for more information:  https://dnr.maryland.gov/boating/Pages/registration.aspx

-
Mark McGovern
SM #440 Cara
Deale, MD USA


Paul Cooper <paul.cooper74@...>
 

The boat is registered US.  But after further consideration we have decided not to bring the boat up to the US this year.  Thanks for your replies and interest.

Paul


Eric Freedman
 

Paul,

In what state is your boat registered?

Or is it just documented in the USA without a state registration?

Fair Winds

Eric

Kimberlite Amel Super Maramu #376

 

From: main@AmelYachtOwners.groups.io [mailto:main@AmelYachtOwners.groups.io] On Behalf Of Paul Cooper via Groups.Io
Sent: Sunday, March 03, 2019 9:41 PM
To: main@AmelYachtOwners.groups.io
Subject: Re: [AmelYachtOwners] US State taxes

 

The boat is registered US.  But after further consideration we have decided not to bring the boat up to the US this year.  Thanks for your replies and interest.

Paul


Mark Erdos
 

Paul,

 

Since the boat is USA flagged and should you decide to take it to the USA, you will be required to pay Use tax (sales and use) in the state where the boat is located after a specific period of time unless you can prove an equal amount of sales and use tax was paid to another state. The state tax is independent of the US registration and homeport. The tax and state registration is normally due after a stay between 60 or 90 days and varies by state. There are two exceptions on the east coast: Delaware and Rhode Island are both tax free for boats. Florida has a limit on the amount of taxes charged of $18,000. North Carolina ($1500) and South Carolina ($300) have limits in the tax. However NC and SC charge property taxes on vessels located in the state but still these taxes can be significantly less than other east coast states.

 

Several cruisers we met in the Chesapeake Bay had vessel registrations in the tax friendly states. To avoid being snagged by MD or VA tax collectors, they moved their boats within the allotted timeframes. Basically they shuttled between MD and VA being sure to collect a receipt for a marina or boat fuel as proof of being there.

 

VA is the more friendly tax state in the Chesapeake verses Maryland with a 2% tax. However, this is only the state part. Some VA counties charge personal property tax on boats. I forget which counties but I recall some boaters moving their boats out of a county on a specific day/month to avoid the property assessment. A quick conversation with another boater in a VA marina will help.

 

A real pet peeve of mine: A boat pays sales and use tax in state, let’s say 5%. Then the owner of the boat moves to vessel to another state a few years later, registers the boat and the tax is 7%. The new state can require the difference of tax to be paid. If the vessel moves from a state where it paid personal property taxes, these taxes do not count as a credit toward the new states sales and use tax. The additional 2% is now due to the new state even though the vessel never changed ownership. Boats are subject to limits on how long they can stay in states without local registration. However, an RV can stay in the all states permanently so long as it is registered in one of the 50 US states.  RVers register their RV in tax friendly state where renewals can be done by mail and avoid the mess we have to deal with. Rant over.

 

 

 

 

 

With best regards,

 

Mark

 

Skipper

Sailing Vessel - Cream Puff - SM2K - #275

Currently cruising - Santa Marta, Colombia

www.creampuff.us

 

From: main@AmelYachtOwners.groups.io [mailto:main@AmelYachtOwners.groups.io] On Behalf Of Paul Cooper via Groups.Io
Sent: Sunday, March 3, 2019 10:41 PM
To: main@AmelYachtOwners.groups.io
Subject: Re: [AmelYachtOwners] US State taxes

 

The boat is registered US.  But after further consideration we have decided not to bring the boat up to the US this year.  Thanks for your replies and interest.

Paul


Craig Briggs
 

Mark,
We brought our US flagged boat back to the US, registered it in Florida and paid no sales/use tax, even though it had been registered in NH, which has 0% tax.

When we bought it in FL in 2000 I spoke several times with the director of the Florida sales tax division that handles boats so as to "get it right". He informed me that if we left Florida in 10 days, (or checked into a state registered repair facility and left FL afterwards) and registered it in another state and sent him (the tax department) proof of the boat being out of Florida and of the other state's registration there would be no tax due.

He further explained that if we subsequently brought the boat back into FL after, if I recall correctly, 6 months, we could (should) register it in FL but the fact of having "met the sales tax requirement of another state" (even thought that was 0%) would mean no FL sales tax would be due.

So after 15 years we came back to FL and were not required to pay sales tax, just the normal annual registration fee ($200 or so).
The sales tax director said it was just like the thousands of people who move to Florida and bring their cars - if they come from a no- or low-tax state they do not have to pay the difference in the sales/use tax rate.

Craig Briggs SN68


Mark Erdos
 

Craig,

 

We too found Florida to be different from most other states. The boating industry is so important to the economy there, the state is protecting that business.

 

We purchased Cream Puff in Ft. Lauderdale and considered moving the vessel north for the 180 days and bouncing from state to state and returning to FL with a RI or DE registration. The plan was to then register in FL and avoid the tax. However, this is a very very very grey area. And,  once again when we started to be on the boat full time, if we were caught in MD after 90 days with the FL registration, we would then get stung with MD tax because we couldn’t prove sales tax was paid.

 

We decided to flag the vessel BVI (I have a USA and British passport) and avoided any USA sales tax requirements (USA cruising permits). This has also paid off dividends with boat insurance.

 

 

 

With best regards,

 

Mark

 

Skipper

Sailing Vessel - Cream Puff - SM2K - #275

Currently cruising - Santa Marta, Colombia

www.creampuff.us

 

From: main@AmelYachtOwners.groups.io [mailto:main@AmelYachtOwners.groups.io] On Behalf Of Craig Briggs via Groups.Io
Sent: Monday, March 4, 2019 10:24 AM
To: main@AmelYachtOwners.groups.io
Subject: Re: [AmelYachtOwners] US State taxes

 

Mark,
We brought our US flagged boat back to the US, registered it in Florida and paid no sales/use tax, even though it had been registered in NH, which has 0% tax.

When we bought it in FL in 2000 I spoke several times with the director of the Florida sales tax division that handles boats so as to "get it right". He informed me that if we left Florida in 10 days, (or checked into a state registered repair facility and left FL afterwards) and registered it in another state and sent him (the tax department) proof of the boat being out of Florida and of the other state's registration there would be no tax due.

He further explained that if we subsequently brought the boat back into FL after, if I recall correctly, 6 months, we could (should) register it in FL but the fact of having "met the sales tax requirement of another state" (even thought that was 0%) would mean no FL sales tax would be due.

So after 15 years we came back to FL and were not required to pay sales tax, just the normal annual registration fee ($200 or so).
The sales tax director said it was just like the thousands of people who move to Florida and bring their cars - if they come from a no- or low-tax state they do not have to pay the difference in the sales/use tax rate.

Craig Briggs SN68


John Clark
 

Craig,
   I wonder how that would work for a vessel purchased overseas, USCG documented but never registered in a State.  South Carolina does not register USCG documented vessels.  Annie SM 37 is documented with Charleston SC as home port, my home and state of residence.  She has however only passed thru SC during my ownership.  At this writing she is berthed in Georgia where I am working but does not have to stay. 

I would be curious how FL would treat her for sales tax. 



On Mon, Mar 4, 2019, 9:23 AM Craig Briggs via Groups.Io <sangaris=aol.com@groups.io> wrote:
Mark,
We brought our US flagged boat back to the US, registered it in Florida and paid no sales/use tax, even though it had been registered in NH, which has 0% tax.

When we bought it in FL in 2000 I spoke several times with the director of the Florida sales tax division that handles boats so as to "get it right". He informed me that if we left Florida in 10 days, (or checked into a state registered repair facility and left FL afterwards) and registered it in another state and sent him (the tax department) proof of the boat being out of Florida and of the other state's registration there would be no tax due.

He further explained that if we subsequently brought the boat back into FL after, if I recall correctly, 6 months, we could (should) register it in FL but the fact of having "met the sales tax requirement of another state" (even thought that was 0%) would mean no FL sales tax would be due.

So after 15 years we came back to FL and were not required to pay sales tax, just the normal annual registration fee ($200 or so).
The sales tax director said it was just like the thousands of people who move to Florida and bring their cars - if they come from a no- or low-tax state they do not have to pay the difference in the sales/use tax rate.

Craig Briggs SN68


Craig Briggs
 

Hi Mark,
The Fl tax department did not consider it a grey area and actually gave us a letter confirming we had no liability for Fl sales tax. And when we returned to the US (in Fl), again, there was no question that we had any sales tax liability whatsoever. They do not consider this "avoiding tax", which carries a, shall-we-say, shady connotation. In fact, it's just the opposite; they consider it being in full compliance with the FL tax laws. The end result was that we paid 0% sales tax on our Amel AND were in 100% compliance with all state tax laws - nothin' shady or grey or risky or dodgy or whatever.
Craig


Craig Briggs
 

Hi John,
I just did a quick scan on SC's boat tax website and see what you point out, that they don't title/register USCG documented boa. I then looked at FL and it seems they may have changed their tax laws about 2011 and would, indeed, collect tax on your boat. So our situation of no sales tax, having bought the boat in FL in 1999, may no longer be the case, as Mark suggested.

My suggestion would be to call the FL Sales Tax department in Tallahassee, try to get to the manager of the boat/yacht division and discuss it with him, which is what I did.

Craig, SN68 


Gregory Shea
 

John, 
Just to add to Craig's comments, the Florida sales tax people are amazingly approachable and helpful. When I had businesses in Florida, I dealt with them many times, both on the phone and in person. I could not believe that a government bureaucracy were so keen to help resolve your Sales Tax issues. But that wa a few years ago ....? I suggest you take Craig's advice.

Greg Shea
Sharki 133


From: main@AmelYachtOwners.groups.io <main@AmelYachtOwners.groups.io> on behalf of Craig Briggs via Groups.Io <sangaris@...>
Sent: Tuesday, March 5, 2019 8:28 AM
To: main@AmelYachtOwners.groups.io
Subject: Re: [AmelYachtOwners] US State taxes
 
Hi John,
I just did a quick scan on SC's boat tax website and see what you point out, that they don't title/register USCG documented boa. I then looked at FL and it seems they may have changed their tax laws about 2011 and would, indeed, collect tax on your boat. So our situation of no sales tax, having bought the boat in FL in 1999, may no longer be the case, as Mark suggested.

My suggestion would be to call the FL Sales Tax department in Tallahassee, try to get to the manager of the boat/yacht division and discuss it with him, which is what I did.

Craig, SN68