I am Canadian and am interested in purchasing a used sailboat Located in Wisconsin. Is there a mandatory sales tax to be paid, even if the boat will be sailed and kept in either another state or the BVI ?
WI tax on used sailboat
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I bought my boat in Wi. and didn't pay any state taxes. But I moved it into Canada without reg. it in Wi.
Don
Don
Not to be taken as gospel, but I'd think if you bought through a broker he might try to collect sales tax. But like Don says, in Maryland, they collect the tax when you go to register the boat. Don't register, don't pay. I know people do that even if they keep the boat in MD.
To answer your question any boat registered and titled in any of the states (ex Montana) or with the USCG will need to pay "Sales Tax" irrespective of where it will be kept. There are of course certain exemptions but mostly none apply to pleasure boats. In order to avoid paying "sales tax" you would need to register and title it in another country. I don't know what kind of boat it is and how much money this tax would represent but if its a significant amount I would suggest you consult a Marine Title Agent so you may weigh your alternatives. The "mandatory" idea that some people have is that when they purchase a boat through a broker this broker is compelled by law to collect the tax money for the state. But there are exemptions and procedures a title agent may be able to help you with. The other consideration may be the prestige that a US flagged vessel carries overseas as opposed to perhaps a cheaper "flag of convenience" which may offer no support in time of need. Good luck.
Benny's answer isn't complete-generally, tax is due where the transaction occurs. NH, for example, doesn't levy sales or use taxes so none is due. However, if you move the boat to another state, a use tax may be due unless you've owned the boat for a while-usually a year or two in the tax free state. In addition, some states only credit you for the tax paid-if you buy the boat in a 5% state, and then move it to a 6% state, you may owe an additional 1%. The details vary from state to state.
Here's a whack of information on what's required to import a boat into Canada.
There's some mention of tax on that site. I expect that brokers/dealers would try to collect sales tax, but a private seller wouldn't. In some cases the state might have a process for claiming back sales tax on purchases made by out-of-state people.
Try contacting the Wisconsin tax authorities. When I vacationed in Washington (a sales tax state) from Oregon (no sales tax) several years ago, I was able to avoid sales taxes by signing a affidavit on a form the stores had, saying where I was from. Wisconsin might have something similar.
Jim Kolstoe, h23 Kara's Boo
Jim Kolstoe, h23 Kara's Boo
A thought came to me, and once that pain went away I checked my DNR forms. It may be different elsewhere, but in MD, the tax is NOT a sales tax, so not necessarily collected at the time and point of sale. It is an EXCISE tax, and it is collected by DNR when filing for a new title. We'd like to think this means the excise tax goes to support the marine-related budgets. That's something to look for in WI. Anyone there have their DNR receipts?I bought one last year from a broker and I had to pay sales tax
I argued over it for a few days but the broker wouldnt relent. Even when I threatened to scuttle the deal. In the end I paid taxes on the purchase and the sales tax both.
I argued over it for a few days but the broker wouldnt relent. Even when I threatened to scuttle the deal. In the end I paid taxes on the purchase and the sales tax both.
clarification...
I paid taxes in Canada on the whole purchase price in WI including the WI sales tax.
I paid taxes in Canada on the whole purchase price in WI including the WI sales tax.
Taxes stink
But your biggest problem is the VAT in Canada, much more than any US taxes. One other thing not mentioned is county property taxes. In California, we get dinged every year for this on our boat! If you move the boat to another state or country you have to jump through BIG hoops to get these bast*rds off your back.
I'm going to go back & read the linked Canadian tax reference now. I would think sales tax would be small potatoes compared to that!
But your biggest problem is the VAT in Canada, much more than any US taxes. One other thing not mentioned is county property taxes. In California, we get dinged every year for this on our boat! If you move the boat to another state or country you have to jump through BIG hoops to get these bast*rds off your back.
I'm going to go back & read the linked Canadian tax reference now. I would think sales tax would be small potatoes compared to that!
Sales taxes are paid to the State of Wisconsin when they are registered with the WI Department of Revenue. If the vessel is moving outside the state, taxes are NOT due WI. A reputable dealer will not collect sales taxes knowing the vessel will not be registered in the state and brolers generally have purchaser register it in the state the vessel will be used.
For boats registered in WI, the tax rate varies by county based on the county the vessel is kept, not the county of residence. State/county/stadium rates vary throughout the WI and range from 5% to 5.6%.
For boats registered in WI, the tax rate varies by county based on the county the vessel is kept, not the county of residence. State/county/stadium rates vary throughout the WI and range from 5% to 5.6%.
Re: Taxes stink
Stu- our tax at the Fed level is a Goods and Service tax- GST and is similiar to a VAT. I do not think you have to pay any Canadian ( Fed or Prov) taxes on a boat you do not pysically import into Canada. We bought ours in Ill. and imported it into Canada. It was at the point of border crossing that taxes were collected. We did not pay any state tax as the boat was being taken out of state. Larsens did the paperwork for us and they seemed to be pretty familiar with the process. We bought the boat privately.
Stu- our tax at the Fed level is a Goods and Service tax- GST and is similiar to a VAT. I do not think you have to pay any Canadian ( Fed or Prov) taxes on a boat you do not pysically import into Canada. We bought ours in Ill. and imported it into Canada. It was at the point of border crossing that taxes were collected. We did not pay any state tax as the boat was being taken out of state. Larsens did the paperwork for us and they seemed to be pretty familiar with the process. We bought the boat privately.
Dumb tax
My reference was to buying a boat out of Canada and bringing it into Canada, that's your GST, right? It's 17% as I recall. So, if I currently own a boat and want to move to Canada, I have to pay Canada 17% of the value of my boat to bring my boat to Canada. My boat is 22 years old!!! That concept is nuts, there is no Canadian sailboat industry to protect.
So if you bought your boat in WI and moved it to Canada, didn't you have to pay that 17%?
My reference was to buying a boat out of Canada and bringing it into Canada, that's your GST, right? It's 17% as I recall. So, if I currently own a boat and want to move to Canada, I have to pay Canada 17% of the value of my boat to bring my boat to Canada. My boat is 22 years old!!! That concept is nuts, there is no Canadian sailboat industry to protect.
So if you bought your boat in WI and moved it to Canada, didn't you have to pay that 17%?
Stu
The GST is only 5%. The Provincial tax varies and is not required to be payed on used boats at least I didn't pay any PST when I brought my boat home. It might be like the auto market that if your boat is old enough you don't have to pay any duty to bring it across the line.
I used a customs broker and payed them the tax
And yes there are a couple of sailboat builders here as well.
Don
The GST is only 5%. The Provincial tax varies and is not required to be payed on used boats at least I didn't pay any PST when I brought my boat home. It might be like the auto market that if your boat is old enough you don't have to pay any duty to bring it across the line.
I used a customs broker and payed them the tax
And yes there are a couple of sailboat builders here as well.
Don
from a WI sailor who moved.
If you buy through a broker or dealer, you will pay tax as part of the deal.
Private sales are supposed to be taxed, but it won't be checked until one registers the boat.
I am quite sure that any state with a sales tax will require that you show proof of having paid a sales tax. If you cannot do that, the state you are registering in will require you to pay them. When I moved my documented boat to NY state, I had to prove I had paid sales tax in WI, where I bought the boat.
I did once buy a boat in IL and, when I registered it in WI, had to pay sales tax to WI as I had not done so when I purched in IL.
If you buy through a broker or dealer, you will pay tax as part of the deal.
Private sales are supposed to be taxed, but it won't be checked until one registers the boat.
I am quite sure that any state with a sales tax will require that you show proof of having paid a sales tax. If you cannot do that, the state you are registering in will require you to pay them. When I moved my documented boat to NY state, I had to prove I had paid sales tax in WI, where I bought the boat.
I did once buy a boat in IL and, when I registered it in WI, had to pay sales tax to WI as I had not done so when I purched in IL.
Wisconsin has a user fee, like Florida, where if you keep the boat in that State for more than so many days (or months), then they will ask that you pay their user fee. If you are going to buy the boat and just sail it around for a little while, then no worry. Any broker or salesman who tries to collect sales tax when not required should be shot. If you are a Wisconsin resident, then you must pay sales tax. If you are from another State and use the boat in Wisconsin waters permanently (or for that minimum period of time mentioned above), then you need to pay their user fee/sales tax even if the boat is USCG documented (the stickers are applied on the transom then). I know many Canadians who bought boats in Bayfield, WI, sailed it around for a few weeks and then sailed home to Canada across Superior, etc. They paid no sales tax (not required), but had to pay their GST in Canada according to their Province.
I totally disagree with higgs, sorry. States vary with how they handle sales tax. In the State of MN, for example, between private parties who both are residences of MN and intend to use the boat in MN (not dealer and party) there is no sales tax expected on used boats (but there is on trailers). Even if a broker is involved (broker sells a boat for a private party). If it is a boat in a dealer's inventory (he owns it), then sales tax is required (new or used). It is Wisconsin that charges sales tax if you use it in their state. WI residences have to pay sales tax for new or used boats - period. But, if you bought a boat in MN and paid sales tax, then you would not have to pay sales tax a 2nd time, if you were to use the boat permanently in WI. You only pay sales tax once to whichever state. If you bought the boat used from a private party in MN and never paid sales tax, but then used it in WI, then you would be expected to pay sales tax. If you bought a boat anywhere and USCG documented it and never paid sales tax, but wanted to use it in WI for over their limited period of time (I don't recall, but it is 60 or 90 days) then you are required to pay sales tax. Had the Illinois resident kept the boat in Illinois, but bought the boat in WI and not paid sales tax there, then whatever the requirement is in Illinois is what is paid. But, to assume that all states want sales tax between private parties is very misleading. It is my experience that a Canadian buying a boat from a private party (even with a broker) and taking it to Canada, he is not expected to pay U.S. sales tax. You only pay sales tax once and that is where you intend to live or use the boat and, like I said, in some states you don't have to pay it at all depending on how they view it. When they return to Canada with the boat, they will then have to pay sales tax.
Thanks everyone for the advice. I'll be sailing the boat to the BVIs. Now I'll have to check what they charge to register the boat there.
Couldn't agree more Stu- it isnt about protecting anything, just collecting taxes!!
This whole discussion just proves that there is nothing like the topic of taxes to generate a whole bunch of incorrect facts. Canadian taxes are collected on 2 levels typically ( unless you live in Alberta where they have enough oil that they don't collect a provincial tax on purchases- course they dont have much water there big enough to sail boats on
) The federal tax is the GST and it is 5% all across Canada. Provincial taxes vary according to the province. Some provinces collect a "harmonized tax" which is both added together- Ontario is about to become one of those. Boats and things that are licensed or registered typically have the tax collected when crossing the border and/or when applying for the license. Duties are another matter - since NAFTA not that many items are subject to duty, boats included IF they are manufactured in the US.
Of course all this complexity serves to create lots of civil service paper pushing jobs.
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