Sales tax warning

[capta]

The state of California harassed me for YEARS over a boat that had never been in California since I'd acquired it in Hawaii. I was not even a resident of California.
It's just governmental bullying because they can't manage any fiscal responsibility and expect us to make up their shortfall..
South Carolina asks for excise tax each year, even though they are well aware that the boat isn't in the state. After 5 years we've got it down to they ask, I reply by email that the boat is in the Caribbean, they email me back with my exemption. When I asked for them to just stop asking, they said there was no provision for that as long as I am a state resident. Go figure.

 

[joker460]

I'm glad I live in Canada

I would not get too comfortable if you have only paid Provincial Sales Tax. Back before 2010 there was PST Tax and GST Tax. Both were combined in 2010 to HST Tax. The Feds are now going after those that didn't pay the GST. A Guy I know brought his boat over from the USA and only paid the PST. This was over 10 years ago. Well the FED's came knocking for the GST payment plus fines. The Government is looking for ways to collect unpaid tax.

 

[Jan11]

Back in the 90s I bought my boat in Connecticut, documented it, and registered it in NY. The county DMV office wanted the Coast Guard bill of sail which said "for $1 and valuable consideration" which they took to be $1. Therefore no tax.

Some years later they walked the docks and sent me the "prove you've paid" letter. Having written a heart wrenching letter pointing out that I was a victim I was let off without a penalty, but paid the tax and interest.

 

[dlochner]

it looks like to me you would be better off not doing anything as to pull this off ...there is a lot of proof of wrong doing in that maneuver

Well, I didn't endorse it and I did say it was a scam.

On the other hand, there was that year that I didn't pay attention and I did put the dingy registration sticker on the big boat and the big boat sticker on the dingy. Fortunately, no one questioned it.

 

[MitchM]

1) please note that every state tax authority has a statute of limitations that sets forth the time within which the state can claim back taxes. it's usually 6 years or less. it may be worthwhile for NY owner to check with a local lawyer if s/he can't find new york tax statute of limitations info on the internet. 2) are the dealer and manufacturer out of business? either or both may have the original sales onctract and documentation sowing that dealer paid this tax. 3) write to the new york times, this is outrageous !

 

[MitchM]

here you go: NY has a three year statute of limitations, so you can politely tell them to discontinue their collection efforts (unless of course you agree in writing to extend the statute , haha. )

Publication 130-D
(10/13)

The New York State Tax Audit — Your Rights and Responsibilities

Statute of limitations

New York State Tax Law generally places a three-year statute of limitations on tax audits, beyond which the Tax Department may not audit without your written consent. The statute of limitations does not apply, however, for any period during which a taxpayer failed to file a return, failed to report federal changes, or filed a false or fraudulent return to evade tax.

 

[Randy Rohrbeck]

And yet in NY if your boat is under 20 feet (might be off a foot or two here) and not powered you don't even have to register it.

Wonder how long that will last?

 

[dziedzicmj]

I'm glad I live in Canada

So am I, but this does not mean that our tax people are that much better. This summer I received a letter from Ontario revenue department asking me for taxes on the sale of the boat that I bought 3 years ago. I brought the boat from the US, so I had to pay the tax on the entry (a broker took care of that) and I have the boat licensed with Transport Canada (you have to with any vessel having more than 10 hp motor). So in both situations i had to prove that the taxes were paid. But the provincial government took 3 years to notice that I have the boat and still id not have any indication that I paid taxes.

The lesson to learn here is that you better keep the receipts for as long as you have the boat and at least 7 years after you get rid of it. As far as I know 7 years is the limit how far back they can go after your taxes.

 

[Daveinet]

My reading shows that you have to keep it for the rest of your life and anyone who might inherent merchandise in question. There are statute of limitations unless fraud is involved or failure to file. If one fails to file, then there isn't any statute of limitations. The problem is that even though you did file, if they can't find it, they can come after you 100 years later because according to their lack of record, you didn't file.

 

[Don S/V ILLusion]

here you go: NY has a three year statute of limitations, so you can politely tell them to discontinue their collection efforts (unless of course you agree in writing to extend the statute , haha. )

Publication 130-D
(10/13)

The New York State Tax Audit — Your Rights and Responsibilities

Statute of limitations

New York State Tax Law generally places a three-year statute of limitations on tax audits, beyond which the Tax Department may not audit without your written consent. The statute of limitations does not apply, however, for any period during which a taxpayer failed to file a return, failed to report federal changes, or filed a false or fraudulent return to evade tax.

How is this relevant to liability for sales tax?

 

[northptsailor]

When I first posted this thread I was hoping to hear if anyone else had had a similar experience with NYS tax people. I have now spoken to many members of my club and found that almost all of them have received a "You may owe sales tax" letter. Some of their stories are really scary. So yes, keep all records of purchase of anything expensive for life. And it is true, if they say you did not pay any tax because they have no record, there is no statute of limitations. One other thing to think about is this. If you were unlucky enough to lose a brand new boat, but did have agreed value insurance, don't think you are home free. The state wants another sales tax payment from you even though you have only replaced a boat you already paid sales tax on. So if you lost a boat you paid $200,000 for, the tax not covered by insurance would be almost $16,000!!

 

[MitchM]

what a mess. let's hope folks keep their cancelled checks and VISA statements and dealer sales contracts for 30 years so you can prove these greedy state tax people wrong. i always wondered why i have been keeping every cancelled check and VISA bill since 1968 , now i see that it c an be quite useful. my state PA-- like most states (and the Feds) won't even issue registrations and ID numbers without proof of sales tax having been paid. so why did it take them so long ???

 

[MitchM]

Question: How is this relevant to liability for sales tax?[/QUOTE]
Answer: any person, under each state's law, can only be sued if the case is started within the 'statute of limitations.' each type of lawsuit has a different statute: tax collections are 3 years in NY. (murder is the only case with no limit on how long the state has to prosecute you.) so NY cannot sue you for tax collection unless they file suit within 3 years of the date the tax being due. (usually, date of sale. ) if course if you have criminally failed to file ANY tax return , there are extensions to the statute of limitations within which they can sue you.

 

[dlochner]

All this is beginning to sound a bit like an urban legend: Bad ass tax collectors going after innocent boaters.

After some googling, I could find little confirmation of this practice by NY or any other state. If this is wide spread one might expect multiple news accounts of boaters being harassed. But I couldn't find one article.

There are several reports of states (NY, Florida, Washington) focusing on scofflaws who buy boats in low tax states, register them in that state and then move to a higher tax state. As far back as 1981 this was an issue with boats registered in Delaware.

This report (http://www.insidesalt.com/2015/04/inside-the-new-york-budget-bill-sales-tax-provisions/) states that boats that are required to be registered in NY or boats that are used for more than 90 days in NY are required to be registered and document proof of paying sales tax.

This article from the NY Post also talks about the requirement to pay sales tax on boats used in NY. http://nypost.com/2014/07/19/new-york-hiking-out-of-state-boating-sales-tax/

In Washington there was an effort to collect sales tax because up to 20% of the boats had not paid the tax due. http://www.seattlepi.com/local/article/Finding-boat-scofflaws-a-daunting-task-for-agency-1159348.php

The general theme in these articles is that states impose taxes and use fees on boats, the rates vary from state to state, and some boaters try to avoid paying sales tax (or a higher rate) by buying and registering a boat in a low tax state but using it in a high tax state.

Separate from any debate about whether states should be taxing boaters, if a tax is due then the boater has an obligation to pay the tax.

I am curious to know if the boaters who are being contacted by NY Department of Taxation have properly registered their boats in NY and I am curious to see the letter the OP received. That might help clarify some of the confusion here.

 

[Daveinet]

Question: How is this relevant to liability for sales tax?

Answer: any person, under each state's law, can only be sued if the case is started within the 'statute of limitations.' each type of lawsuit has a different statute: tax collections are 3 years in NY. (murder is the only case with no limit on how long the state has to prosecute you.) so NY cannot sue you for tax collection unless they file suit within 3 years of the date the tax being due. (usually, date of sale. ) if course if you have criminally failed to file ANY tax return , there are extensions to the statute of limitations within which they can sue you.

This is not true. I posted a link published by the state of NY that specifically states that there is no statute of limitations if there has been fraud or failure to file. If they have record of filing, and they dispute the amount, then the statute of limitations applies, but if there is no record, meaning they believe that you have failed to file, it is not just extended, but rather no limit exist.

 

[Crazy Dave Condon]

As a former dealer in North Carolina, It was a nightmare when it came to sending in copies of where I paid the sales and use tax but learned a trick or two. So let me suggest this.

First, you will need to see if there is a Statuate of Limitations for paying tax in New York which will require an investigation by you. Secondly, I would send a letter requesting that tax department to identify the specific hull number stating there are other boats with that specific name on them that includes your boat demanding those contact information as well. I would also be specific to ask how they got your boat name and be demanding as the burden of proof is on them, not you, when asked if you were before a judge if they cannot provide a hull number or registration number.. If they cannot respond, the judge will throw the case out.

If you do have where proof of tax was paid, I would include a copy of that sales receipt and then provide a copy of the boat title and/or registration. I would also have a letter from that department who handles titling/registration if they issue the registration with/without proof of tax being paid.

I would also send your letter certified with return receipt. Send a copy of your letter along with a cover letter to your Attorney General to do an investigation as you consider this being harrassement which others and you are experiencing. Many times when you make a stand with the Attorney General being involved, it is funny how often tax department back down.

Hope you will be able to prevail. It became a passion of mine over the years to take on NC taxation department. I finally resolved many headaches getting the Attorney general involved. The issues were the folks hired who did not know the law nor the information or simply did not know what they were doing.

 

[CYQK]

All of this reminds me of the story of Secretary John Kerry parking his expensive boat in another state to avoid the higher taxes in Mass
Did any bureau take him on???
Sir John can get away with doing this but no one else!!!!!

Bad government bad folks!!

 

[MitchM]

Daveinet, please read my entire entire post (copied from NY State dept. of revenue website

".. if you have criminally failed to file ANY tax return , there are extensions to the statute of limitations within which they can sue you..."

"

 

[northptsailor]

This is not urban lore! As I mentioned in a previous post many members of my club have received this type of demand. If you think the state can't do this, think again. My sales tax was paid 15 years ago when I bought the boat. The sales tax people do have access to MVB files, but choose not to check. The tax person I spoke to did not know my boats hull number which is on the registration. If you get a letter like this, and can't prove that the tax was paid - even on a boat you no longer own - you are in for a real problem.

 

[woodster]

i see that is from the state of NY ...i am sitting here thinking about all those folks that have not paid parking tickets in that state....looks like they are in for a surprise in the computer age as all they have to do is put a hold on your driver's license renewal in whatever state you are in ...and if you don't pay you won't renew...all these states have reciprocal agreements now...and they will go back as far as the day you were born because you are not in compliance and out of bounds with the law...(a fugitive if you will )