Navigating Different State Taxation and Registration When Purchasing a Boat: Tips to Ensure Stress-Free Boat Shopping
With the current buoyant state of the market, looking for the perfect model in a different state may be your best bet. Expanding the area you are searching gives you more options and chances to find the ideal boat for a more reasonable price. However, buyers may be unsure if they need to pay the tax in the state in which the boat was bought and also when bringing it home. This is where the tax should be paid in the state where it is being used the most. Every state has a unique set of requirements as to how long the boat can remain there before the tax needs to be paid, plus different tax rates or caps. For instance, in Florida the tax is 6%, limited to a maximum of $18,000, and is only payable on the first $300k of the sale. Furthermore, a removal form must be filled out with several options to choose from and then proof of removal has to be provided. If this isn't done, the state will pursue a tax debt. In addition to this, each county has an extra tax amount that is calculated based on the initial $5,000 of the sale and is also covered in the $18,000 cap.
Have you come across a vessel that reads "Not for sale to US residents while in US waters"
This means that the boat is foreign-flagged and that the 1.5% US Import Duty has not yet been paid. Despite what people think, getting a USCG (United States Coast Guard) document does not indicate that the import duty has already been paid. This is especially true for Catamarans sold in the US. Make sure you verify if the import duty has already been paid or else both you and the seller must hire a customs broker in order to get the paperwork properly done and to pay the import duty. If you intend to sail out of US waters, an offshore closing process with a marine documentation professional is the way to go and you will be able to obtain the USCG document and leave the US without the need to pay the import duty.
California | no tax limit and varies from county to county |
Connecticut | boat tax is 2.99% |
Delaware | no boat tax |
Florida | maximum yacht tax is $18,000 with a 6% tax rate and county surtax |
Georgia | 4% tax rate, differing use taxes and counts taxes paid previously towards the tax. |
Maine | boat tax is variable click the link below for more information |
Massachusetts | 6.25% tax rate on the full value of the vessel |
Maryland | maximum boat tax is $15,000 boat tax rate of 5% up to $300k for a |
New Hampshire | no sales tax |
New Jersey | maximum boat tax is $20,000 and is taxed at half the sales tax rate 3.3125% (6.625% sales tax) |
New York | maximum boat tax $18,400 (first $230k of a vessel) and the New York vessel tax rate is 8% |
North Carolina | maximum boat tax is $1500 and personal property tax |
Rhode Island | no tax |
South Carolina | maximum tax is $500 but has property taxes and luxury taxes |
Virginia | maximum boat tax is $2000 but different counties have property tax, some have none |
**Disclaimer: ABOVER DATA is from March 23, 2023 - This post is not intended as professional tax advice. Before taking any financial or legal action, consult a qualified professional.
When looking for the perfect yacht, expanding your search to different states may be a great way to get the best value for your money. But when making such a purchase, buyers must be mindful of taxation, registration, and the hassle of transportation.
Calm Seas Yachting can be the perfect ally in such a journey, as our team of experienced brokers guarantees your comfort, safety, and satisfaction at all times. We prioritize communication and honesty in every transaction and make sure that your boat is listed with a reliable and trustworthy source. With us, you can be sure that your boat-buying experience will be successful and stress-free.
Contact Calm Seas today for any questions you have about the boat buying and selling process!