CA Sales Tax on Vessels Question

F

Flutterby

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From dmv.ca.gov website:

"What vessels must be registered?

Sail-powered vessels over eight feet long and motor driven vessels not documented by the U.S. Coast Guard used on California waters are subject to registration by the Department of Motor Vehicles (DMV). The vessel must be located in California."

If one has a documented vessel, does CA still collect sales tax? How is this done if the boat is not registered with DMV? My question does not involve property tax; just sales tax.

TIA!
 
I purchased a documented boat 2 years ago and had to pay sales tax to the state.
 
When I lived in CA, I documented my boat. The broker from whom I bought it said nothing about sales tax. About a year later I got a letter from the state about my overdue sales tax on the boat! Ouch.
 
Whenever we register our boats with DMV we would always pay the sails tax there. I would assume if you bought a boat from a broker (new or used) they would be the collecting agency for sales tax just like a car lot.
 
The USCG will eventually contact the CA BOE, so better to pay up front.

The amount of sales tax you pay is determined by the Documented Vessel's "Home Port" county as reported to the CG when you transfer the documents, even if the seller is in a different county.

Here's the scoop:
http://www.boe.ca.gov/sutax/faqtrans.htm
 
FB, they always catch up with you, trust me. Best to be prepared to pay the sales tax. The counties check with the marinas amongst some of their methods of trying to locate unregistered vessels. Believe me, in this day of tight budgets, the counties look very hard to find who owes them money. It also pays to decide which county you are going to have the boat located in, as they tax rates vary a wee bit. So if you have a trailerable documented vessel it might be cheaper to say you have it at your home versus the water. Man, I have fought this battle. In florida they do not have a personal property tax and that is fantastic along with no state income tax. Just hurricanes, humidity and high insurance rates.
 
Thanks for the info guys! I guess BOE isn't dependent on DMV records to keep tabs on the purchase of boats........
 
Flutterby,
If you buy a documented boat thru a broker,you'll pay sales tax at time of purchase.

If bought private, then prepare to get the bill from the franchise board within a year.

Mike
 
Hello stranger! I don't see many postings from you any more. Have you gotten too busy for us or out of boating? Thanks for the feedback!
 
Sort of related to this topic is property tax. I traded up to a new boat last year, and I sent in the property tax info as requested to CC County. They ended up assessing my boat $20k higher than I paid for it. Can this be appealed?
 
I had the same issue in LA County. I finally found someone who would look at my sales agreement and fix the over assessment. The catch? I had to send it in three times before they finally acknowledged receipt and changed my assessment. Good luck.
 
Liz,
We're not out of boating, we just sold the big boat and moved back to "dirt". Still have a small runabout.
For the time being that's the way it'll be.
Since we're not planning to liveaboard again,
We'll probably look for a 28' to 30'small cruiser sometime in the future.

Thanks for asking...
Mike
 
Sales Tax on larger vessels can be avoided. It used to be that as long as you bought the vessel out of state, and actively used it out of state for three months (read receipts for dockage, repairs, etc), you could return later and not pay sales or use tax. It now requires 1 year to be eligible for the same exemption.

-Gene
 
Gene, but if you purchase in CA, there is no way out of it, right? Have you gotten a new boat yet?

Mike, thanks for the update! Good luck finding your new boat. There are lots out there to choose from. Have you considered a Rinker? They have nice boats in that size. There is a dealer near the Bethel Island Bridge which has an inventory of used boats.
 
Flutterby,

Depending on the size of the boat it may very well be worth having the owner move the boat to Oregon or Mexico before completing the purchase and thus purchasing out of state.

The new boat is not yet bought. I'm sure I'll post brag pics here when I have an offer accepted.

-Gene
 
There are also ways to do the transfer "offshore", i.e., outside the 3 mile limit. I recommend trying them only with expert assistance in rules compliance.

BTG
 
I recently did the offshore delivery and the process of doing so is straightforward itself, although there are some special conditions to be aware of (for example, don't be the skipper nor have a delegate of yours move the boat to the offshore limit). The real question of the effort will come in a year's time when exemption is applied for and what the state will ask for. Given today's tax environment, the government is diligent in reviewing the exemptions. It is critical to have significant documentation (mainly receipts) to show that the vessel was used actively for at least a year, out of state. It cannot be just stored.

An additional benefit is you get to avoid the use tax for the time it is out of state as well.

Unless you were planning on generally using the boat out of state, you should consider whether the tax savings is worth the additional expenses such as travel, outsourced maintenance and the time required. When it was just a 3 month requirement, it was a no-brainer, especially if you lived near a border.

One soft benefit is that it does force you to cruise in areas you might not normally get to... and effectively have it funded by the tax savings!
 
goplay, you've got all the angles figured, don't you? You're one smart boat owner! How are things up north going for you? I've been catching some of your posts on the "Inside Passage" forum. It sounds really nice! I've been to the San Juans out of Antecortes, but never up into the passage. Maybe someday......
 
Flutterby, so far I've limited myself mainly to the southern Gulf Islands (basically the Canadian San Juans). The boating here is really quite amazing. Certainly the best in North America and in many ways better than the Caribbean. Lots of places to go, lots of anchorages, lots of boats of all sizes and makes, lots of great people. In August I will start moving north since I will have a couple weeks in a row available. From what I hear, it only gets better as you move north with more spectacular scenary. One area was described to me as boating in Yosemite.

The richness of the boating experience makes you really wonder why we keep boats in CA at all! Obsession aside.
 
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