Documented Vessel Question
 

I bought my previous boat almost four years ago, and sold it about one year ago. I bought the boat from a dealer in California and took delivery in Arizona because we own a house there and home ported it there. I had an agent who I was referred to by the dealer do the documentation of the boat for a fee of $1500.00.

Now four years later I have the State of Arizona coming after Me for sales tax on the boat. My first question, are documented vessels subject to the same taxes that state registered vessels are?

My second question, who is responsible for paying the tax? I own my own business and I am responsible for paying sales tax on items I sell. If I don't collect from the customer I still have to pay. It just seems kind of odd that the State is contacting me directly. If I bought a car from a dealership would they do the same thing?

Thanks for any info anybody can give.

Re: Documented Vessel Question
 

As far as I know, if you bought a car, you are responsible for paying the tax directly to the state. It isn't the same as buying a CD at Best Buy because there are so many other facets to cars, like boats. There is Sales tax 1 time, perosnal property tax every year (depending on state), registration every year.

As far as documentation goes, different states have different laws. From reading here on OSO, I have come to understand that many states still require full taxes and a registration sticker even though the vessel is documented with the coast guard. They may not require hull numbers though. I would bet that you are liable for all taxes that have not yet been paid. The theme here? Don't get between a government entity and its tax collections!! :D

Re: Documented Vessel Question
 

We just had the same situation here in Maryland. Got a lovely letter from the state infoming us we owed back taxes to the state for a documented vessel in their state. bought out of state but because it resides on a trailer within the state borders ( or as they said " principal state of use" ) we owe them money and a lot of it :mad: :mad: :mad:

Re: Documented Vessel Question
 

If you bought a boat from any state other then were you are calling home port you must the sales tax for that state that you are calling home port. even if you have it documented It. Most states have a usage tax for this reason. Most states say that if you keep a boat in that state for 30 days or more you must paid the usage tax.
Example If you came to New York for the summer and kept you boat here for 30+ days them by law you are to paid the usage tax of 8.75% and you have it documented in Florida and paid the sales tax when you bought it of 6% them the state of new York will make you paid the 2.75% as a usage tax.

Rick OSG

Re: Documented Vessel Question
 

I believe Arizona amended the law so they can collect taxes on used boats sold from dealers...You still have no sales tax on used boats sold through private party...We had to send in our check too...Arizona does not require state registration if you have it documented...

Re: Documented Vessel Question
 

We went through this recently with Nevada. They changed their law at the beginning of 2004 or 2005. We had all documented, but now had to pay a LOT of taxes to the state for them. So, now they're both documented and registered. :mad: But, the state is also trying to get us for previous boats, BEFORE THE LAW, that we don't even own anymore! :mad: :mad:

Gotta love the government. :rolleyes:

Re: Documented Vessel Question
 

You may want to check that that $1500 didn't go for taxes and documentation.
Last time I checked, the USCG fee was about $100 and you could do it yourself. Maybe the rest was for taxes in the state you purchased the boat?

Re: Documented Vessel Question
 

$ 1500.00 is a lot to document a boat. You can plod thru it yourself for about $ 150.00 but it takes forever.
I bought a boat out on Long Island ( 6% tax) and signed a paper that I would move it out of New York state within 15 days.
When I got it to Maryland I had 30 days to pay Maryland tax ( 5%) on it and it took another 6 months to get Documentation straightened out with CG.
Last two years Maryland has hired a bunch of water cops on a percentage deal, to check HIN numbers on boats in marinas. If'n your taxes ain't paid they will get you big time with all the penalties and interest.
Got 5 boats in my marina just last year, one for almost 100 grand in tax, penalties and interest.
They settled with him for around 35K !

Re: Documented Vessel Question
 

I agree, $1500 is way off!!! maybe he was supose to pay tax with the $1400 left over and didn't??? I just had my 32 USCG doc. and it cost a total of $120.

Re: Documented Vessel Question
 

Illinois just changed their law as well. A documented person to person sale and a boat which was registered but not used in the state did not have to pay taxes. Any boat purchased from a dealer demanded taxes to be paid.

Changed in 04.

Re: Documented Vessel Question
 

I don't think the $1,400.00 was for the tax, if so, it was a partial tax payment. The price of the boat was over $200,000 when he bought it.

Re: Documented Vessel Question
 

Thanks for the responses, sounds like I am screwed. Semper Fi is right about the amount, I am looking at about a 15k bill. :mad:

Re: Documented Vessel Question
 

Documentation fees down here run about $400.00. $1,500. is way off if none of that was for your sales tax.

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Havasu Cig, before you pay, there are exemptions to the rule :D

http://www.azdor.gov/brochure/610.pdf

Re: Documented Vessel Question
 

Thanks for the link, I was looking through that site yesterday but i don't think any of the exemptions aplly to me. Any tax attorneys from AZ in here? :D

Re: Documented Vessel Question
 

I thought #9 could work for you, but if they already have your AZ address :(

Re: Documented Vessel Question
 

What do you get out of having your boat documented vs. non documented?

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How does AZ know you have a boat and how do they know how much you paid for it. You registered the trailer so they know about that. The boat has no title and no AZ registration - where did they get the info from?

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AZ sent me a letter, non-certified, a year after I purchased a 382 in Phoenix. (2004) I live in Indiana and documented the boat. They wanted their piece of the pie. I think the company I hired to document the boat dotted all the "I's" and crossed all the "T's", which probaly included notifying the local state I purchased the boat from.

Re: Documented Vessel Question
 

The USCG national Vessel Documentation Center, (NVDC) shares data with each state. Each state then determines how and what tax is due. The vessel numbering or documentation resiprosity is not nessescarily directly related to taxation.

I would however challenge each call for tax due. My own expierience here in Florida was very concerning to me as I did not owe the tax they said was due. I recieved two letters from the state of FL stating if I had not paid tax on two boats it WAS due at a rate of 6%, not may or might be due but was due.

One boat was kept and sold in Michigan and had never seen FL, the other was shipped from Puerto Rico, registered in my name in FL and later sold in Florida. In both cases the state of FL got my address from the CG and sent these letters. When I contacted the tax office in Tallahasse and let them know thier letters were wrong and written in a way which was very misleading and decepetive, they tried to re-direct by saying it was becasue of all the fraud.

I would challenge it but also know Tax is going to be collected somewhere. When I bought my current boat I paid the great state of FL a nice big tax bill...

Re: Documented Vessel Question
 

Ok,
You live in California and did an out of state delivery to save California Tax.
The Fed Doc paperwork shows the Arizona address and that is how Arizona found your purchase.
However,
Are you using the boat in Arizona?
Is it possible that you were mistaken as to where the delivery was made?
Say like Mexico.
Not California or Arizona but that you use the address in Arizona as your mailing address?
Think about where the boat is used and stored, if not in Arizona fight them. The trailer is a seperate issue. Lose that battle win the war. Don't break the law use it to your best advantage. Push the envelope to the max legally allowed.
Good Luck,
VeeCat

Re: Documented Vessel Question
 

Many States are now waking up,
Do your research on the legally correct but still tax saving way. Out of State Delivery with a Federal Title can work if you want to take the time to figure it out. Each State is different, Each State can obtain information from the Fed. Doc. office in Richmond, Virginia. There is now only one office that all fed doc papers go to. They centralized this several years ago. Texas used to be handle though the Port of Houston Office. No Longer. Some States really have a good grasp on how to collect. Just Know the rules. Texas forgot to check when the office moved for almost ten years. The key I now believe is, the state that you operate the waters of, does it require a state sticker on the side of the hull. This is new, used to be the name on the transom and home port marking on the transom got you by almost anywhere. Not so now.
Just and opinion,
VeeeCat

Re: Documented Vessel Question
 

Semper,

I went through this a few months back. Almost the exact same circs as your purchase. Bottom line was I had to pay them their use tax, or pay sales tax in CA. Thier tax was less that CA, so I bit their bullet. It was a tough pill to swallow when you think you're in the celar and then they come to you for 12 grand! :mad:

Re: Documented Vessel Question
 

It was HavasuCig that is getting hassled for the tax payment......I paid Ca. for my tax just last year before they could start fining me.

Re: Documented Vessel Question
 

Oops! My bad.

Re: Documented Vessel Question
 

Delaware and Nebraska may be the only states left to avoid or negate the sales tax.

Re: Documented Vessel Question
 

However, as mentioned earlier, if the boat is in a state for an extended period which exceeds that states limitations, they rerserve the right to demand the user tax fees.

Re: Documented Vessel Question
 

No problem. I went through this crap about 1 year ago...I had Ca. and Az. coming after me. The bad thing is that I started paying Ca. (higher tax) then Az. came after me, I would have rather paid Az. it would have saved a little over $1,000 :mad:

Re: Documented Vessel Question
 

I guess not much :mad:

Re: Documented Vessel Question
 

The trailer was actually registered in California because according to California law any vehicle used in the state must be registered there if you have a California drivers license.

I am not sure exactly how they found out about the boat, but I think that they finally figured out what a documented vessel was and now they are trying to collect their taxes on them.

When I first bought the boat the water cops out in Havasu did not know the laws about documented vessels, and questioned me more than a few times for not having state registration, now I think they are all wise to it. I am sure the state is starting to catch on now just like the cops did. I am also sure I am not the only one going through this.

Re: Documented Vessel Question
 

Thanks for the advice and I think you are right. I am going to have to pay somewhere, and it will most likely be in Arizona. I did have California come after me on a previous boat that was never used in the state and delivery was taken in Arizona, but all I had to do was show that I payed Arizona tax and that I own a house there and it was over. After dealing with California on previous boats I am probably better off keeping this issue in Arizona.

Re: Documented Vessel Question
 

Thanks for all the replies, I feel a little more informed now.

LaveyMan, Did they try to get you for any penalties? That is what concerns me the most.

Re: Documented Vessel Question
 

Sales tax on used stuff from state to state. It has been paid once already.
Crookeeed.

Re: Documented Vessel Question
 

What about Florida? Does anyone know if you can "get away with this" in Florida by purchasing in another state and then Documented with CG?

Sorry if I'm hi-jacking.

M

Re: Documented Vessel Question
 

No problem, I would like to hear what other states are doing. :cool:

Re: Documented Vessel Question
 

I looked into documenting in NJ and there was no tax advantage here.
The registration stickers are required with documented boats here now, to get the sticker you have to pay sales tax.

The only advantage was that the boat would be in a national database. So if it were stolen and if the hull numbers was intact and if the documentation numbers where intact and if anyone ever cared enough to look there was a very very slim chance they might trace the boat back to me.

Re: Documented Vessel Question
 

I deal with this type of paperwork every day...In MD., when an out-of-state resident purchases a boat from us to be used in another state, they sign a "State of Principle Usage" form. This form does two things; it absolves me(the dealer) of the tax collection burden in MD.(because the boat is leaving the state), and a copy of this form is then sent(via Dept. of Natural Resources of MD.)to the Gov. of the "State of Principle Use"(as filled-in by the buyer). This form, or it's equivalent, is what usually triggers the tax assesment letters first. The documentation process usually works a little slower. CG Documentation supersedes ALL "STATE REGISTRATIONS". CG Documentation is totally exclusive of any state exise taxes or usage fees that may be levied by any individual state or pricipality.
Hugh

Re: Documented Vessel Question
 

HN is another

Re: Documented Vessel Question
 

I was running in Benton Harbor Michigan area last year with a CG Doc only and got stopped. They wanted to see the Reg sticker on the boat. He wanted to write me a ticket but let me off for some reason. I went to the BMV the next week and had to pay the sales taxes (Ouch) to get the sticker. Now I have the CG Doc paperwork as well as the local state registration number (With sticker on the window) with me on the boat.They don't require numbers on the side if it's CG Registered.

Re: Documented Vessel Question
 

Whenever you have your boat docked in a marina or a slip they can report your CF numbers or vessel documentation to the state board of Equilization. That's how they find out :D

Same thing with a plane or helocopter in an airport...they report the tail #'s to the board of equilization