We’re thinking about purchasing a used boat that’s presently in another state. The boat’s documented. Our sailing would be solely on an inland lake in New York State; we are residents of New York. We’ve searched this forum and read the Coast Guard site on the subject. It appears the only reason for keeping the documented status (vs. state registration) would be to avoid paying the Sales & Use tax, which would be considerable. Our question for those with documented boats in New York State: Do you really avoid the Sales & Use Tax or does the man catch up with you eventually? Please, no lectures about our civic duty to pay for the benefits of living in such a wonderful state! For obvious reasons, we’ll sign off only as New York Sailors
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Documentation
You do not have to keep the documentation, unless your bank is going to require it. But you will have to register the boat with NY DMV, regardless of whether or not you keep the document. And DMV is going to hit you for sales tax no matter what when you go to register it. If you keep the document, you will not have to put the state registration numbers on the boat, but you will have to put the NY DMV registration sticker on it.
You do not have to keep the documentation, unless your bank is going to require it. But you will have to register the boat with NY DMV, regardless of whether or not you keep the document. And DMV is going to hit you for sales tax no matter what when you go to register it. If you keep the document, you will not have to put the state registration numbers on the boat, but you will have to put the NY DMV registration sticker on it.
documentation for a mortgage
if you are getting a loan "ship's mortgage"to purchase the boat, you will need to document the boat with the USCG. This is not a USCG rule but a bank rule. They want to reasonably make sure that there 1. there is no unpaid lein on the boat currently, and that they have a lein holder if you intend to skip town.....as for sales tax...NYS WILL get their money. If you can get the boat through other means (cash or credit card) you will not have to go through this
if you are getting a loan "ship's mortgage"to purchase the boat, you will need to document the boat with the USCG. This is not a USCG rule but a bank rule. They want to reasonably make sure that there 1. there is no unpaid lein on the boat currently, and that they have a lein holder if you intend to skip town.....as for sales tax...NYS WILL get their money. If you can get the boat through other means (cash or credit card) you will not have to go through this
Title and Tax are separate issues
Documentation is a nation-wide database for the ownership or title of the boat. Sales tax is a state-by-state issue and may be considered a seperate issue. About two years ago, the State of Texas realized that without state registration, they could not be certain if sales tax was paid on Documented boats. Now all of our Documented boats must be registered with the State Parks & Wildlife and certication or collection of sales tax seems to be the motivation. Some of our buddies are upset at having a colored sticker on the hull of nice boats.
Documentation is a nation-wide database for the ownership or title of the boat. Sales tax is a state-by-state issue and may be considered a seperate issue. About two years ago, the State of Texas realized that without state registration, they could not be certain if sales tax was paid on Documented boats. Now all of our Documented boats must be registered with the State Parks & Wildlife and certication or collection of sales tax seems to be the motivation. Some of our buddies are upset at having a colored sticker on the hull of nice boats.
Big Brother
Has to collect his fee, and think about how many times tax is paid on the same boat that has been sold three or four times in its life time. Same goes for automobiles and I think because the boat is documented there is no way around the tax issue because of the paper trail. RAD S/V Free Spirit ~/)~
Has to collect his fee, and think about how many times tax is paid on the same boat that has been sold three or four times in its life time. Same goes for automobiles and I think because the boat is documented there is no way around the tax issue because of the paper trail. RAD S/V Free Spirit ~/)~
Save the documentation fees, but that's it
As one who documented I can tell you there's no benefit for your situation, so if your lender is not requiring it as part of their loan process then skip it and save the fee. But as pointed out your state still requires you to register and you won't escape sales tax on the transaction.
As one who documented I can tell you there's no benefit for your situation, so if your lender is not requiring it as part of their loan process then skip it and save the fee. But as pointed out your state still requires you to register and you won't escape sales tax on the transaction.
I agree with Rich
I bought my used Hunter 33.5 from a broker in Canada. No taxes were paid to Canada since I took the boat back to New York. NY does collect the sales tax when you register, and you must register, even if documented. My credit union required that I document the boat, which I did. It took a very long time (3 years ago) to process the paperwork. It didn't help that I forgot to include some attachment. Now I get to sail around with no numbers on my bow, but so what? Everytime I sail to Canada and back, New York officials only want to see the registration cerificate and could care less about being documented. By the way, your original post asked about use tax. NY doesn't have use tax, only sales tax and registration fee.
I bought my used Hunter 33.5 from a broker in Canada. No taxes were paid to Canada since I took the boat back to New York. NY does collect the sales tax when you register, and you must register, even if documented. My credit union required that I document the boat, which I did. It took a very long time (3 years ago) to process the paperwork. It didn't help that I forgot to include some attachment. Now I get to sail around with no numbers on my bow, but so what? Everytime I sail to Canada and back, New York officials only want to see the registration cerificate and could care less about being documented. By the way, your original post asked about use tax. NY doesn't have use tax, only sales tax and registration fee.
NY State....
...requires ALL vessels with an engine to be registered, regardless of the documentation. If you buy the vessel in another state from a dealer, he will collect his states sales tax, that amount will be credited toward your NY tax liability. Either way, you will wind up paying the sales tax on the purchase price. If you buy from a private party, you will pay the sales tax on the amount the bill of sale states.
...requires ALL vessels with an engine to be registered, regardless of the documentation. If you buy the vessel in another state from a dealer, he will collect his states sales tax, that amount will be credited toward your NY tax liability. Either way, you will wind up paying the sales tax on the purchase price. If you buy from a private party, you will pay the sales tax on the amount the bill of sale states.
Save your money
You will still have to pay sales tax. Good luck trying to get around that. As a past member of the Coast Guard in Sackets Harbor, NY, there are no extra points for documenting your boat. The only reason you would have to document your vessel is: your lender requires you to, or if you meet the required weight limits or usage. Any other reason, you just paying an extra tax. Good Luck
You will still have to pay sales tax. Good luck trying to get around that. As a past member of the Coast Guard in Sackets Harbor, NY, there are no extra points for documenting your boat. The only reason you would have to document your vessel is: your lender requires you to, or if you meet the required weight limits or usage. Any other reason, you just paying an extra tax. Good Luck
THE TAXMAN COMETH!!!
To all... Thanks for all of the good advise!!! If we do buy the boat, an Alerion Express 28, we'll drop the documented status and just go with the NYS registration.... "and pay da man". Paul s/v The Lord Nelson (for now)
To all... Thanks for all of the good advise!!! If we do buy the boat, an Alerion Express 28, we'll drop the documented status and just go with the NYS registration.... "and pay da man". Paul s/v The Lord Nelson (for now)
To Ken Parker:
A sales tax is a tax on a transaction that is collected by the seller who is licensed by the state to collect sales tax and is based on the cost of the item. A use tax is a tax on a transaction that is collected by the state from the purchaser based on the cost of the item. If you don't pay a sales tax, you must pay the use tax. The only practical difference between the two is the eneity to whom the tax is paid. Use tax has nothing do do with using anything. In short, when you pay "sales tax" directly to the state, you are actually paying the use tax. Steve Alchemist
A sales tax is a tax on a transaction that is collected by the seller who is licensed by the state to collect sales tax and is based on the cost of the item. A use tax is a tax on a transaction that is collected by the state from the purchaser based on the cost of the item. If you don't pay a sales tax, you must pay the use tax. The only practical difference between the two is the eneity to whom the tax is paid. Use tax has nothing do do with using anything. In short, when you pay "sales tax" directly to the state, you are actually paying the use tax. Steve Alchemist
Sales Tax!!!!
It is Sales Tax, not use tax in NY and every time a boat is sold or an auto,bike,etc that has to be regitered with the state of New York they get Sales Tax. So as I stated in my previous post how many times does the state get the tax for the same boat,car,etc in its lifetime. If it was Use tax they would call it that! and still charge you Sales tax! :{
It is Sales Tax, not use tax in NY and every time a boat is sold or an auto,bike,etc that has to be regitered with the state of New York they get Sales Tax. So as I stated in my previous post how many times does the state get the tax for the same boat,car,etc in its lifetime. If it was Use tax they would call it that! and still charge you Sales tax! :{
SORRY - - - I didn't mean to start a
urinating contest!!! I think if you check very carefully, the official name of Gov. Nelson A. Moneybags' tax is Sales & Use Tax. Therefore, if you buy something in NYS, you pay the Sales Tax. If you buy it out-of-state and bring it into NYS to use, you pay the Use Tax, which is, coincidentally, the exact same rate, except that I think you can deduct whatever Sales Tax you may have paid in the state of purchase. You non-Yorkers have have trouble believing this, but we now have a line on our Income Tax form to declare (and pay) the tax on out-of-state purchases that are used in NYS. I personally felt it was damn nice of the folks in Albany to add that line, as I was growing weary of having to constantly send checks to them for the tax on those purchases
. Paul s/v The Lord Nelson
urinating contest!!! I think if you check very carefully, the official name of Gov. Nelson A. Moneybags' tax is Sales & Use Tax. Therefore, if you buy something in NYS, you pay the Sales Tax. If you buy it out-of-state and bring it into NYS to use, you pay the Use Tax, which is, coincidentally, the exact same rate, except that I think you can deduct whatever Sales Tax you may have paid in the state of purchase. You non-Yorkers have have trouble believing this, but we now have a line on our Income Tax form to declare (and pay) the tax on out-of-state purchases that are used in NYS. I personally felt it was damn nice of the folks in Albany to add that line, as I was growing weary of having to constantly send checks to them for the tax on those purchases
. Paul s/v The Lord NelsonGift
How does it work if the boat was a gift, if it greater than 30 years old and was not in usable condition at the time of transfer (and still isn't) ? What does the tax man use as a guide to give it a value ? (BTW the boat was originally documented)
How does it work if the boat was a gift, if it greater than 30 years old and was not in usable condition at the time of transfer (and still isn't) ? What does the tax man use as a guide to give it a value ? (BTW the boat was originally documented)
Dear Fixer Upper
You owe the sales/use tax on the amount you actually paid when you bought the boat -- not on its value. You will need a receipt from the person you bought it from. If it was a gift, get a receipt that says so -- or give the man a dollar, and get a receipt that says so. The tax people may call the seller to verify the amount -- especially if it seems low to them. Here in Maine, they got tired of dealing with $1 sale prices, and added the possibility of a gift right on the tax form.
You owe the sales/use tax on the amount you actually paid when you bought the boat -- not on its value. You will need a receipt from the person you bought it from. If it was a gift, get a receipt that says so -- or give the man a dollar, and get a receipt that says so. The tax people may call the seller to verify the amount -- especially if it seems low to them. Here in Maine, they got tired of dealing with $1 sale prices, and added the possibility of a gift right on the tax form.
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