CA Luxury Tax

Do you pay this on your boat?

How much is it? Do they collect it when you register it, or in your yearly income tax filings? My boat is registered in Texas so I'm not aware of this tax.

Rene,

It's by county. San Diego County is 1% sent annually to you like your property tax form. It is based on your sales receipt.

C

Does the boat have to be over a certain length or value, or do all boats have it?

Rene,
I pay 1% annually. Unfortunately the county doesn't take depreciation into account when calculating the 1%.

Rob

Rene, as far as i know... anything over 40K (california) When purchased brand new, you pay luxary tax on... if you are buying used, you dont pay luxary tax, because it has already been paid.

also as an example if you buy something 60K.. you only pay 10% (almost positive thats the ca rate) on anything over 40k... so basically 10% on 20k... I believe the magic number is 40 but they've been raising the number... so not sure

Rene, I believe Chris is correct in that it varies by county. Therefore, my response is limited strictly to my knowledge of Alameda County. Any vessel requiring registration is subject to the tax. I pay it on the X and the Doos and it’s really not that much. It’s 1% based upon your bill of sale and it depreciates each year. Normally, if you bought your boat new, the dealer will file the purchase price with the DMV. If you bought it used, you are required to notify the DMV of the purchase price and pay sales tax at that time. The DMV then passes this information onto your county’s tax collector. If they believe you under reported the purchase price (I guess some people do that to lower their sales tax but wouldn’t know first hand), the tax collector can seek additional information from each party of the sale and audit the FMV of the property in question. Hope this helps.

I don’t think the criteria for which boats, have any thing to do with cost. I think it has to do with size. I bought a 99’ 19 foot Maxum, paid 20k for it and had to pay the tax. I also paid 1%. IT BLOWS!!!!!! !

Aaron, not true, We bought our boat used and still have to pay the yearly tax. I WISH I didn't but that dang bill shows up every year!!

well the answer was concerning only tax related to Luxury tax (in Bay area Ca).... Which my answer will hold to be true.... Of course there are other taxes which i dont cover, or my answer does not pertain too

The 1% annual tax noted above is personal (unsecured) property tax, not luxury tax. A base rate is set by the state (1%) and counties can add to it to cover indebtedness. The assessment is made against the lesser of (i) the fair market value of the property at the beginning of each year, and (ii) the full value adjusted for inflation. Personal property tax is exempt from Prop 13.

http://www.boe.ca.gov/pdf/pub29.pdf

Just another side note. If you own the boat on January 1st, you are responsible for the tax bill for the year. Even if you sell your boat in February, you will have to pay the bill in August. So if you sell your boat and buy a new one you have to pay the property tax on your old boat and the sales tax on the new boat. You just have to love California!

Rob and Matt,

Do you pay $450 a year (purchase price of $45,000 x 1%) a year?

Or, is it like Alee says and you pay $50 a year (purchase price of $45,000 – 40,000= 5,000 x 1%)

Note, for the above examples I used the $45,000 figuratively. I have no idea what they paid for their boats.

I also currently, and for the past 8 years have owned a 18' V6 runabout that is registered in CA and I've never had to pay a 1% tax on it, but I only paid $4000 for it and I bought it used. It only costs $10 a year for the registration.

I originally bought my Supreme for 23k and have paid 175.00 every year for luxury tax in Shasta County. Reg is only 10.00. It varies by county. Call the county tax assesor and ask.

What if you register it in another state? You should register in the state of most usueage. Who's to know that you don't use it in AZ (i.e. Lake Mead) most of the time. I know you can reg in AZ without having an address in that state.

UH I think lake Mead is NV.

Rene,

The tax is 1% of the value (slightly higher in Contra Costa county). It is not like Alee said. Lux tax is different from the boat tax. It is an unsecured property tax, as spelled out above, and it is regardless if it is used or new. You will be paying $300 to $400 or so a year. They will ask you where the boat is stored/ registered and that county will pick up the note. If you move, make sure the county you move too gets your correct billing address. I just went through this. I moved from Contra Costa county to Alameda county and Alameda did not pick up the registration change for some reason. I sold my old boat in March and had never recieved a bill. I find out through through a credit report that Contra Costa put a lien on the property that I did not even own. The County Assessors Office said I should have remembered to tell them. That is a bunch of crock. They are suppose to pick it up through a change in registration. I got it worked out, but, it was a pain.

Alameda County has a trigger limit (value of the property) to where they will try and collect taxes on a piece of property, but, it is very low.

I'm calling Arnold.

Neeley,
UUUUH The state boundary runs down the middle of Lake Mead. Point was....if you reg in another state do you pay the tax? It's been a long time since I lived & owned in SoCal and I can't remember if I payed or not.

Just asked a friend. Answer is; NO, you don't pay if you're registered in another state even if you live in CA. For anyone that's interested.

Noti, I stand corrected. Been there at least a dozen times and didnt realize I was looking at AZ when i looked across the lake from Overton. Any marinas on Mead that are in AZ?

I believe temple bar marina is in AZ.

Rene,

More info - in SD County, once the boat depreciates down to $5k, the lux tax goes away. Aren't they generous!!

By the way, you can argue the value with the tax assesor if you feel it's too high. I did by suppling supporting info - Boat Trader ads, NADA values, etc.

Chris

Chris--that's a state law re: the $5k rule...not to pick at it, but it's property tax, not luxury tax (big difference). Regarding appealing assessments, I successfully appealed the value on a Sport Nautique I owned and brought the assessed value down from $32k to $18k with the agreement that it would not be further reduced for 3 years.

I was just reading through some of the info on the link I posted above and found that property exempt from the tax includes "personal effects" (e.g. furniture, hobby equipment, etc)....but that boats are specifically not exempted.

Also exempt are aerospace museums, which might help explain why a local businessman opened up an aerospace museum that, in essence, does nothing but stores his personal collection of planes, etc. The entrance fee is significant relative to its size. The one time I stopped in to check it out, the place was literally empty. I'm guessing he's saving a bundle on unsecured property tax and probably got a hefty deduction for donating his collection to a non-profit entity that runs the place. Pretty savvy.