Sales Tax / User Fees

Roger Long · Apr 27, 2011

All U Get said:
The way I read it, if l am traveling around New England and only in Maine for <75 days for the first year of ownership, no tax? Is it a one time fee?

No, that's annual excise tax which is different.

Use Tax is a one time payment.

There are two separate issues on the Use Tax. One is whether people owe it or not. The other is enforcement. The CRU has been just shotgunning letters to any non sale tax state registered boat that they can prove was in Maine for even a day requiring the owner to prove that it wasn't in the state for 30 days during the first year of ownership. They have also failed to make the first year of ownership part clear in the letters and asked for documentation of boat's location during the entire ownership period. This, under threat of liens, has caused more bad feeling than the tax itself. It's sort of like you visit a state park in another state and arrive home to find a letter requiring you to prove that you didn't use drugs while visiting the state. It makes you really want to never go back again.

petersea · Apr 27, 2011

As long as we are on the subject of taxes........Connecticut has proposed new taxes on boats to include a increased sales. As well as taxing on land storage and some repairs that were not taxed previously. Ct is already one of the most expensive state to register your boat. Documented and out of states boat visiting more then 60 days must register.
The real kick in the a.... is they are proposing bringing back the personal property tax on boats again. $20 dollar per thousand of value (not sure how they will determine value). Got to wonder about our politicians ! !
They did this in the 80's and just about killed the boating industry in the state.

RTMBoston · Apr 27, 2011

Roger Long said:
If they interpret it the same way they do for aircraft, no.

I think the law says that it just has to be kept out of the state for a year to not be subject to the tax and the tax people get to decide what it means to be "in" the state. They decided, prior to a change in the law and some clarification for aircraft, that 20 landings constituted being present in the state. This led to some absurd situations like a fellow who stopped in Maine to buy fuel (paying some tax and leaving other money here) while traveling back and forth to Canada getting a six figure tax bill. The CRU people just looked at the sales receipts they collected from airports. You can bet he's not stopping and spending any money in Maine anymore.

There are some links on this page that I collected when I was thinking of writing an article on the issue. I was getting so discouraged about the state of my state that I gave up writing it.

http://www.cruisingonstrider.us/CruisingLinks.htm

There was a huge flap with aircraft that led to a full scale boycott sponsored by AOPA. The owner of a sawmill who had been flying up weekly to check on it got so angry that he simply laid off 14 employees, closed the mill, and took everything he owned out of state. If the boat situations I found out about are similar, he may not have owed the tax at all. The letters that go out say you may owe the tax, prove that you don't or send the money.

Funny you mentioned that, I saw this in today's Boston Herald...
http://www.bostonherald.com/news/re...everses_tax_assessment_on_bedford_mans_plane/

PORTLAND, Maine — Maine’s highest court has ruled that the state must repay taxes it collected from a Massachusetts man for bringing his plane to Maine on visits.
The Maine Supreme Judicial Court ruled Tuesday the state was wrong to send the $26,000 bill to Steve Kahn of Bedford, Mass. Maine tax officials said the law allowed them to collect a 5 percent "use tax" from out-of-state residents if they didn’t pay sales taxes on planes they bought elsewhere but flew to Maine during the first year they owned the planes.
In Kahn’s case, the court said the plane should be exempt from the tax because it was in Maine for only 6 or 7 percent of the year in question, which wasn’t enough to justify the tax.

If I ever make it up to Maine I owe you and Maine Sail a few beers, you both have helped me get ready to take the plunge and get my own boat.

Roger Long · Apr 28, 2011

RTMBoston said:
Funny you mentioned that, I saw this in today's Boston Herald...
.

Yes, I just saw it in the Portland paper with more detail. The story confirms that what "in" means is up to the tax people and not in the law. The court ruled that billing a man over 1000 a day for having his plane in Maine 21 days was unreasonable. However, they also ruled that a FL aircraft owner owed the tax because his plane was in the state for 156 days.

The story stresses that the court has declared what is too short to be reasonable and long enough to be reasonable but there is no guidance about where the line is. The tax people can now say 22 days, send out notices, collect taxes under threat of lien, and only those who are willing to pay huge legal fees to fight it will get their money back, probably at a net loss for the principle of the thing.

If you draw the line in the middle, "in" would be 88 days. Planes operate 12 months a year and the boating season is about three. Prorating that comes very close to the current tax department interpretation that 30 days in the state subjects a boat to Use Tax. I expect they will stick with that number.

If you are from NH, RI, Canada or other no-tax state, limiting your cruising in Maine to 29 days during your first year of ownership will protect you from the tax. It will not protect you however from being subjected to threatening letters and being required, under threat of lien, to produce paper work and receipts on the magnitude of a tax audit. If you are one of those boaters, I would stay out of Maine until this foolishness is over. You can imagine what it's done to marinas. While collecting information for my aborted article, marina operators told me of layoffs and huge financial hits. This has probably cost the state more than it ever would have collected in taxes.

Tim R. · Apr 28, 2011

I would hope that AOPA and BOATUS are fighting this. It reminds me of the luxury tax that devastated both industries back in the 70s and 80s.

The other issue is that the tax folks are trying to collect taxes from owners who bring their boats and planes to Maine for repairs. I have read about some folks who have been fighting this because they never stepped foot in the state while their boat or plane was here getting worked on.

Our plans include cruising Europe some day and I do not look forward to dealing with the VAT tax over there that basically applies to everyone all the time.

Forrest15112 · Apr 28, 2011

gpd955 said:
I looked at the DEP Fish and Wildlife site and it only appears that you have to have licenses for shellfishing in NJ and there's something about a $2 striper bonus. I think the "Resident Senior Clam License " is an interesting one. Seems kind of discriminatory if you are an elderly clam! Don't know much about fishing but I know of no one who has a license to do so in saltwater.

http://www.state.nj.us/dep/fgw/marinelicenses.htm

That never happens. :stirthepot:

Here in Louisiana, you are required to purchase a regular fishing license and a saltwater license even if you are fishing a freshwater pond in some areas. There is a line across the entire state that any fishing south of requires the saltwater permit. To be fair, there are vast areas where you can park your car on the side of the road and catch saltwater species.

We have our own "world class" politicians known for creative legislating and stunts but I've never heard of any usage tax on visiting boats.

Merlin Clark · Apr 28, 2011

I know FL has a much higher rate for non-resident fishing licenses (for any fishing in State waters), I'd imagine this would be the case in most if not all the other East Coast states.

woodster · Apr 28, 2011

We have our own "world class" politicians known for creative legislating and stunts but I've never heard of any usage tax on visiting boats.[/quote said:
"not yet"

regards

woody

WayneH · Apr 28, 2011

Texas has the requirement for a fishing license and a saltwater stamp to fish in saltwater. And like Louisiana, saltwater extends into the land a ways.

But the loophole is that INSIDE the state parks, you don't have to have a license at all.