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Buying a used boat outside of California and tax

Marine Insurance/Health Insurance/Banking/Bill Paying/Taxes

Buying a used boat outside of California and tax

by Cabezonbd » Mon Nov 03, 2014 11:54 pm


Hello, we are buying our retirement boat on the east coast. We live in Santa Cruz. We close in about 10 days. Is there a way to avoid taxes on the boat. We will sell our house probably next year and move on the boat. We can not retire until April 2015. The boat will never be in California, it's just not in the plans. We will boat on the east coast for 6+ months then off to the Bahamas and further south from there, eventually to the South Pacific. Any ideas of not having to pay tax on the boat?

Pat
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Re: Buying a used boat outside of California and tax

by Robert » Sat Nov 08, 2014 12:07 pm

Buy the boat ,register it in Rhode Island and keep the boat in RI until you retire. Make sure you document the boat in US thru the US Coast Guard.

If your current broker (or whoever is transferring ownership papers) does not know how to do it legally, talk to a broker in Rhode Island. You do not need to have a residence in RI, you can keep your residence in CA.

If you keep the boat in just about any other state on either coasts, you most likely will be required to pay a sales tax and / or personal property tax.

There may be a couple of western states such as NV or WY which might not require sales tax.........I'm not sure.
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Re: Buying a used boat outside of California and tax

by jacaldwell1 » Sun Nov 09, 2014 7:29 am

No sales tax or boat excise tax in NH either.
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Re: Buying a used boat outside of California and tax

by jacaldwell1 » Sun Nov 09, 2014 7:41 am

Plus you will be right next door to some of the finest cruising grounds in the world in Maine. An excellent place to shake down your new boat and get ready for extended cruising. Lots of high quality craftsmen and boat services in Maine.
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Re: Buying a used boat outside of California and tax

by SV THIRD DAY » Wed Nov 12, 2014 1:59 pm

Yep....as California residents if your boat never enters the State (or doesn't during the first 365 days after purchase) then you will owe no sales Tax. The State may ask you to PROVE that the boat is out of State, but that's relatively easy...but if CA does get wind of it...they WILL try and get the money from you if your US Doc address is in CA...they will try to get money no matter where the boat is documented at...they will go by the mailing address on the US Doc...that is what they do! It will then be up to YOU to prove to them that you don't owe the money...or they will simply put a lien on the boat....seen it happen. So the best way to do this is talk to someone (broker/tax accountant/Maritime tax expert) to make sure you do it RIGHT. If you don't CA will win and get their blood money from you...seen that happen all to often.

Now here's the Catch.
CA says that you are not allowed to buy a boat/Car/RV as a California resident and just store it out of State of Country to avoid the taxes. So they will make you show use of the boat. I know it's crazy....but that's what happens when a State goes bankrupt...they start looking for money where ever they can find it!
Rich Boren
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