I believe if you boat the boat from an individual regardless of what state it was in, you will not have to pay sales tax on it. Now if you bought it from a dealer out of state, you will have to pay taxes. Luckily with IL it is just a one time up front fee and stickers are good for 3 yrs. In KY, they personal property tax on the boat to get their sticker every year.
As far as documentation goes, I don't know that much about it other than there are minimum size limits.
That is the way it worked on jet skis when I bought some a year ago. I believe it applies to boats also. When I bought my ATV I made sure to buy it out of state to avoid paying sales tax since they do not have to be registered.