Sales tax??????

Ok, so i am in the proces of buying a new to me boat. I live in indiana and the boat is in north caralina. Would I have to pay sales tax in NC or in indiana or both?

I think you'd pay taxes in the state where you purchased it, like most anything you'd buy. You're supposed to pay a voluntary "Use Tax" in the state with which you use it but this is not something enforced. This is a good question though, cause I'm not sure if you'd have to pay taxes when you register it or not. I think you just have to show the government got their slice somewhere before you register it.

Contact your DMV. Every state is different

I just bought a new boat in Illinois. I also live in Indiana. The registration must be in the state the boat will be most of the time. Mine is kept in Illinois. The dealer charged Illinois tax and registration at the time of sale. All registration papers were sent to me in Indiana.

I will be buying it from an individual not a dealership.

then you pay tax in your own state when you register it. An individual should not charge you tax.

+1 to OnlyInboards.

I bought mine in TN and I live in MO. You pay sales tax in the state your living in. I had to pay a trailer transfer thing since I am buying the boat and moving it out of state. I used a boat broker to do my deal. It cost a couple hundred bucks but they do all the leg work as far as titles in different states and transferring them etc...They also go ahead and do the titling work as well. You just wait to get your new title in the mail.

That's a good thing for you Eric, our sales tax here is an ungodly 9.25%. Not sure what the tax would be on a boat.

(Message edited by loudontn on June 15, 2009)

Eric,
boat broker? This is my first boat buy. So i not really sure what all is supposed to happen. What broker did you use?

Depends on state but OnlyInboards has it pretty much right minus some exceptions.

For example, here in GA, if we buy a used boat from a private party from any state, we do NOT have to pay sales tax. If we buy a used boat from a dealer, we DO have to pay sales tax. One thing in GA tax law that helps private party sellers and people that buy from private parties.

I used Russo Financial Services out of Virginia. They do all the leg work for you. They get you your loan, do the title work, and are a good mediator so you dont have to go back and forth with the seller over things. Just sit back and let them do the work. BTW they got me a lower rate than I got with my local back.
http://www.russofinancial.com/
Ben Killino is who I used

You will pay tax in the state that the boat is registered & used in.

Not necessarily where you live & not where you buy it. We live in WA & have the truck & trailer registered in WA. But the boat is registered in ID where it is used. If you live on or near the stateline, this is probably something they have worked out between the two DMVs. I went to the WA DMV & registered the boat with ID.

Since you are buying from an individual, get two copies of the "Bill of Sale" and low ball it for state registration. Also, you could always buy the trailer for X amount and buy the boat for X amount. In my state, you do not have to register or pay tax on the trailer. So you could by a $20,000 boat for $10,000 (10k for the trailer, and 10k for the boat). Hence, you only pay taxes for $10,000. Also, I have many friends who have never paid taxes as they always put "trade" on the "bill of sale".

Note: These are comments only and are not legal advice!

^^^ In washington that doesn't work they just use current market value (NADA) to determine the what to tax you on.

You only pay tax in the state you register it in.If you buy it from a dealer there will be a fee to process paper work but not tax.

Anybody know about TN? I bought my Mastercraft used in-state and will use it here.. Price info/etc was left blank on Bill of Sale. Could I use the "trade" trick to avoid tax? If so, do I have to list what I traded in exchange (i.e. proof)??

As a person buying a boat this week in TN for use in TN, I'm curious about your question as well Bryan.

Bryan and Cody,

If you are buying from an individual, you will pay no tax until you register the boat. If you buy from a dealer, the dealer will likely collect the tax. I bought my boat in SC. I paid no tax in SC, but had to pay TN tax when I registered the boat. If you can get a separate bill of sale for the trailer and boat, you could likely avoid the tax on the trailer. Not everyone that buys and registers a boat, buys a trailer, so this shouldn't be a problem. I'd be careful about the suggestion of getting a "low ball" bill of sale. I got a great deal on my boat. A few months after registering it, I got a letter from the state asking about the price. I had to explain why I paid so little. Just be careful.

Hope this helps,

Jman

PS: The 9.25% only applies to the first $1600 (I think), then it is 7% for the rest. I think that is correct.

I thought trade of gift only worked if it was from a family member, otherwise your on the hook for sales tax? At least thats the way it is here. But there is also some different rules here too. Like if you buy a vehicle out of state and show you used it out of state for 30days before bringing it in to the state you could avoid sales tax. My uncle owned several rv dealerships and he would often sell rv's to people in california from washington then have them sit in the lot for 30days before delivery and all taxes where avoided. my personal favorite is i just low ball the figure big time, make sure you notifiy the seller of the amount even though i've never seen them check, and when they asks why its so low say it has a blown motor and needs alot of work you bought it as a project to save a few bucks!

p.s. I don't believe we pay sales tax on boat purchases in california but we do have to pay property taxes every year as if it was a house! This sucks!