Sales tax question

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MollyMaguire

MollyMaguire

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Apr 11, 2013
21
Hunter H37C Stamford, CT
So, I live in Connecticut which has a 6% sales tax, but I'm buying a boat in Rhode Island, which has no sales tax on boats or marine gear. Will I have to pay Connecticut sales tax when I register?

I'll be keeping it on a mooring in CT.

Thanks
 
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Calif. Ted

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Jun 8, 2004
2,940
Catalina 320 Dana Point
You would in California, if registered with state they collect at DMV when you change title. On a documented vessel they WILL find you if you don't go to them. I can't imagine any sales tax state letting you slide.
 
Don S/V ILLusion

Don S/V ILLusion

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Sep 25, 2008
7,398
Alden 50 Sarasota, Florida
It's always better to check with the local taxing authority rather than depend on internet advice.

Having said that, from my experience in buying in RI and Ct, Ct considers theirs a use tax. Regardless of the purchase state, CT imposes tax based on whether the boat is used in that state.

We're lucky we aren't (yet) charged with a "breathing air" tax, water use tax or wind use tax.
 
MollyMaguire

MollyMaguire

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Apr 11, 2013
21
Hunter H37C Stamford, CT
Haha--yes, CT is a tax happy state...

Don, do I understand you in that instead of the 6 percent sales tax there will be some yearly assement (mills per $1,000 of value)?
 
Tim R.

Tim R.

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May 27, 2004
3,626
Caliber 40 Long Range Cruiser Portland, Maine
Check with your state. You may be able to keep your boat in RI for a period of time before returning to CT. to avoid the taxes.

A friend of mine did this to avoid paying Maine use taxes.

Not an expert on this at all. Just speaking from rumor so do your due diligence.
 
kloudie1

kloudie1

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Nov 6, 2006
10,080
Hunter 34 Mandeville Louisiana
Check the local laws.. mostly, this can be found on the internet, searching boat registration.. Some states have exemptions on the sales tax depending on how old the boat is. for instance, Louisiana exempts a boat ten years old or older from state sales tax. It still has to be registered even if it is documented.
 
Don S/V ILLusion

Don S/V ILLusion

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Sep 25, 2008
7,398
Alden 50 Sarasota, Florida
MollyMaguire said:
Don, do I understand you in that instead of the 6 percent sales tax there will be some yearly assement (mills per $1,000 of value)?
Click to expand

Sorry to confuse you. No, it is not an annual tax. Rather, it is a one-time tax they consider a "use" tax rather than a sales tax, the former being more broadly applicable to obtain greater revenue. Semantics aside, it is the equivalent of a sales tax.

Not that I am advocating tax avoidance but there are lots of folks in CT who keep their boat in RI for the sole purpose of avoiding the tax (the boat isn't "used" in CT). Not sure if that loophole still exists.
 
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Calif. Ted

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Jun 8, 2004
2,940
Catalina 320 Dana Point
It's also called a "use tax" here, but a rose etc., there is also here an annual "unsecured" property tax. Which is the same as property tax on a house and the same rate, which is about 1% of "assessed" value.
We are also allowed to pay the same property tax for the value of the surface area of ocean we RENT from the county to park our "unsecured" property. This is called a "possessory interest tax".:confused:
 
Ron-Anne

Ron-Anne

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Sep 25, 2012
57
Hunter 30 Massena, NY
Don, Please don't give our congress people (congress being the opposite of progress) any ideas with the air, wind and water taxes, Vt is already trying to tax the airwaves via a "TV" tax.
Ron
 
Gunni

Gunni

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Mar 16, 2010
5,937
Beneteau 411 Oceanis Annapolis
Your buyer's broker should be an excellent source of guidance on this question, they deal with these details as part of their job, and the states, being adjacent will be familiar. I picked my broker based on this very question.

If you ask the tax authorities you are likely to get erroneous, incomplete, or flat wrong information. In the current climate, government isn't paying for, or attracting highly qualified help. Know the answer before you talk to them, the process will go far better.
 
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Glenn17467

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Jun 8, 2004
96
Catalina 30 Seabrook Texas
If CT is anything like Texas, you will have to pay sales tax or be able to prove you paid tax in RI in order to register in CT. Texas is even requiring documented vessels to be registered unless it will be in the state for less than 90 days.
 
Stephan

Stephan

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Oct 11, 2008
62
- - Waterford
CT is now 6.35% sales tax and YES, you will have to pay it.

MollyMaguire said:
So, I live in Connecticut which has a 6% sales tax, but I'm buying a boat in Rhode Island, which has no sales tax on boats or marine gear. Will I have to pay Connecticut sales tax when I register?

I'll be keeping it on a mooring in CT.

Thanks
Click to expand

The CT tax rate went up last year (Jan 1, 2012) from 6% to 6.35%.

When (if) you register the boat at DMV, they will collect the 6.35% tax if it has not been paid. You will also have to pay Property Tax on it in CT. Rate varies from Town to Town.

Stephan
 
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S

Steve Dion

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Dec 2, 1999
15,184
Hunter Vision-36 Rio Vista, CA.
Quite often if you leave it in the non-taxed state for a period of time, it may be exempt from the sales tax once you move it to the taxed state.

You really need to check with the local taxing authority.
 
Brezzin

Brezzin

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Sep 20, 2006
155
Hunter 49 Mystic CT
Stephan said:
The CT tax rate went up last year (Jan 1, 2012) from 6% to 6.35%.

When (if) you register the boat at DMV, they will collect the 6.35% tax if it has not been paid. You will also have to pay Property Tax on it in CT. Rate varies from Town to Town.

Stephan
Click to expand
Property tax. No. No property tax in CT on boats. Governor Malloy tried that but it got shot down. However if you live in a CT town that has a Volunteer fire dept. then you will get hit with a fire tax and that will vary by town.
 
N

navigator97

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May 24, 2004
470
Hunter 33.5 Portsmouth, RI
In RI, there is no RI Sales Tax on boats, providing that they are kept in RI water for a period of time. I think that that period is 1 year, but not sure. You must then Register the bost with the RI DMV Boating Division, even if it is a Documented boat. For 30 Ft LO the registration fee is $100. per year for a 2 year period ($200. Total). Buti if 30 Ft. or over you can regester for one yaer at a time. Dinghy must also be regerested for $30. per year. Then there is a one time Outboard (veen for dinghy) registration fee of $5 (I think - it was that).
 
HukilauMike

HukilauMike

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May 31, 2004
858
Catalina 28 Branford
The only way you get out of paying the sales tax on the boat in Conn when you register it is if you can show you paid sales tax where you bought the boat.
 
S

Steve Dion

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Dec 2, 1999
15,184
Hunter Vision-36 Rio Vista, CA.
HukilauMike said:
The only way you get out of paying the sales tax on the boat in Conn when you register it is if you can show you paid sales tax where you bought the boat.
Click to expand
So if someone buys a boat in 2011 in RI and then decides to move it to Conn in 2013 they are going to pay sales tax on that "used" boat? There a lot of people that move boats from one location to another that must be filling the coffers in other states.
 
F

Flyindiver

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Apr 23, 2013
13
Beneteau First 235 Mandeville, LA
timely info

O
kloudie1 said:
Check the local laws.. mostly, this can be found on the internet, searching boat registration.. Some states have exemptions on the sales tax depending on how old the boat is. for instance, Louisiana exempts a boat ten years old or older from state sales tax. It still has to be registered even if it is documented.
Click to expand
I am in the process of buying an '89 model and was starting to really search for tax info. Didn't have to go far. Thanks.
 
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