paying tax on used boats

Whats the deal with paying tax on a used boat? I see people advertise to buy used from private party to not have to pay sales tax. Don't you still have to pay the taxes when you register it?

Don't know about where you are from, but this is for Nevada:

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Like the answer to most questions, it depends. If you purchase a used boat that is offered for sale on consignment or is being brokered by us, the State of Nevada does not tax the sale of a used (previously registered) boat sold between two private parties. The DMV however, will charge you sales tax on the trailer. The amount taxed is based on a depreciation schedule they have created. It is usually very nominal. If you purchase a new boat (an excellent decision) you will be taxed at 7.5% if you live in Nevada. If you live outside of Nevada you will not be charged sales tax by us. This does not mean you are off the hook depending on what state you live in, each is different.

Same in Louisiana. I paid $35 to register the boat, and $115 for registration/tax on the trailer.

when you buy from a private party car,truck,boat you can put a lower purchase price and normally the seller does not care. example 2000 model boat purchase price $25,000 for tax purposes you could put purchase price was $5,000.

In California, you would be hit up for sales tax when you register the boat, even if you bought from a private party.

You will also be hit up each year for property tax, approximately 1% of the boat's value.

Aaron is correct, but the drawback to doing this in California is that, lets say you total it on a levee, your insurance will only cover what you said you paid for it, and that would suck.

And yes, anyway you look at it, you pay. In Cali that is. The governators got it on lock down. Now if I could just get my garbage men off strike.

In Tennessee you pay sales tax when you register the boat. If the stated sales price "bill of sale" is below "market value" you must show a reason why such as a statement from the seller about damage. If the agent is not satisfied they can charge sales tax on the NADA book value.

I did a little research and it sounds like the same here in WI.

In Texas most insurance co pay NADA or replacement value regaurdless what you paid for it.

Thats another reason to live in Texas. I wasnt going for you I hope you know. But hey, state to state, its like different worlds.

In order for me to insure a boater, I need a purchase order, we send that, and a fast fax, and they are insured for exactly what they pay. Some companies im sure are different though.

I did not know Cali was like that. I always try to pay little as possible in taxes. When I insured my boat. I was told by the insurance co that I could do a stated value if the boat was less than five yrs old. After five yrs they would go by NADA.

I bought my boat used in MN and paid no tax. When I moved to WA they made me pay tax on NADA value because I owned the boat less than five years.

It just sucks that that the government can collect taxes on a boat multiple times. Doesn't seem fair.

Screw them every chance you get! I do.

Aaron I've always been "told " you can skew the numbers in your favor, but if you get caught it's one of those legal document forgery punishments. I've never heard of anyone every being punished, but thought I'd throw it out there. Obviously, not many people will pay full taxes on a $25k used boat, but strecthing it down to a taxable value of $5k may be a little far?

Washington hit's you 8.3% regardless of where, who, new or used, and why you purchased it. (the percentage varies a little from county to county)

That was my favorite part of buying my boat!

In Wisconsin you pay sales tax on the boat, no registration or sales tax for the trailer. In Minnesota, you pay sales tax and registration for the trailer, no sales tax for the boat (obviously registration though).

As long as you and the seller agree on the lower price and you put that price on the bill of sale and the seller signs it only an idiot would get caught at that point. The IRS really hates people that deal with cash or the barter system.

About what Aaron says, you have to make sure that the seller reports the same amount on his taxes...if he reports it at all. I did the same thing years ago. Bought a truck for $8K, told the DMV I bought it for $4K but he reported $8K income on his taxes. I got hit up for the difference during tax season.

Steve, being lighthearted here, your profile says your a USAF officer....kinda ironic taxes are what pays your salaray (I'm assuming). granted not these state taxes, but thought it was funny. back to topic.

As long as you do not deposit more than $10,000 at one time it does not have to be reported as income. Again only an IDIOT would report the sale of a vehicle as income. You already paid taxes on it once.

Steve wrote: "make sure that the seller reports the same amount on his taxes"

The only way that you would report the sale of a piece of property (boat) on income taxes is if you had claimed the property as a business expense and had depreciated it.

I have registered a number of boats and vehicles in California. Each time I get to claim the value. If the value I claim is in the ballpark of real value it is accepted. If is isn't, then there is a lot of explaining to do. In one case I had to get a marine surveyor to examin the boat and give a professional assesment to satisfy DMV.

Well, I bought the truck in Arkansas back in 2000, so I can't attest to the individual's intelligence or why he reported the transaction.

So, if you buy a boat out of state, it sounds like there is a good chance that you wont pay taxes when you bring it back??? Does that sound right?

Yeah, you won't have to pay taxes on an out of state boat...well....unless you want to license it in your home state. But who needs licensing anyway?