GL: How to avoid state sales tax

[Rob Dorsey]

All,

In some states sales between individuals where no dealer is involved are
deemed "casual" or "occasional" sales and no sales tax is levied. If the
broker bought the boat to sell it to you, even without titling it, or if he
even has a financial interest in the boat - e.g. gave the seller the money
to pay off his loan - you may be hosed. Buy it from a dealer and you most
certainly are. Kentucky is such a state, Indiana is not so which side of the
Ohio on which you buy your boat matters. Also, if you have a residence of
record in a state with no sales tax, you might just not report it regardless
of where you buy it. It's important where you register it as well.
Documentation certainly does not skirt the tax as many states have gotten
hip to the "documentation scam" and require registration regardless of
Federal documentation. That act of registration exposes you to the state's
tax laws. 

Most cruisers have a home of record. Make is someplace cheap and as tax free
as possible. Also, some states will charge you a "use fee" when you register
your boat there if you cannot prove that you paid sales tax to someone. 

Case in point: You live in Kentucky and buy a boat from an individual which
is registered in Ohio (just the other side of the river). You register your
boat in Kentucky and pay no sales tax using the "occasional" sale provision
and then moor the boat in a marina in Indiana (also just the other side of
the river). No tax yet but you are subject to a nominal Kentucky property
tax. But...if you move to Indiana to be near your boat, Indiana wants to
collect a 6% "use fee" unless you can demonstrate that you paid sales tax
somewhere. 

Moral: Get all the facts on local tax rules and formulate a strategy to pay
only what you owe. We don't evade taxes but we sure don't want to pay a
penny more than our share.

Rob Dorsey
"Best Revenge"

-----Original Message-----
From: great-loop-bounces at lists.samurai.com
[mailto:great-loop-bounces at lists.samurai.com] On Behalf Of Ralph Yost
Sent: Monday, August 20, 2007 8:42 AM
To: 'Graham Pugh'; Rogersboyz at aol.com
Cc: 'Grand Loop'
Subject: Re: GL: How to avoid state sales tax

As long as you are traveling, you can avoid sales tax. If you stop for >
90days, most state laws require you to pay the sales tax in that state.
This means if you want to stay for season somwhere you could be liable, even
if the boat is owned by a Delaware corp. Check each state's laws in advance
to be sure. There are sales tax patrols that look for boats without the
sales tax stickers.
R.

-----Original Message-----
From: Graham Pugh
Sent: Monday, August 20, 2007 8:34 AM
Contact World Wide Incorporators @ 1308 Delaware Ave Wilmington DE 19806

Tel 302 655 4500
 They will take care of your sales tax avoidance by establishing a company
for you to hold your boat in. It's all very simple.
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