[PUP] taxes and registration

[Scott Bulger]

Bob said:  Scott, The 8.6% you paid in Washington State did not go to pay
the Coast
Guard.  The federal income tax you pay (paid) each year pays that.

[scott]  I know, it just feels like it should.  It would really bum me out
to think all that money went to Washington state.

[Bob]:  If you are not using a boat in a state, then I see no reason to pay
tax to
that state. It is legal to document your boat anywhere you wish, and avoid
paying that state tax.

[scott]  Not true.  If you live and use the boat in WA you pay either a
sales tax or a use tax, they get you one way or another.   It's one of the
states even a corporation won't protect you from paying the use tax.

[Bob]  At least in Florida, if a foreign flagged boat is in the waters more
than 90
days, they are hit with various taxes--and sometimes penalities which are
substantial.  I know that Washington also goes after people who leave their
boats in the Washington marinas.  There are tax people who walk the docks
and
check off the boats--because I was contacted by these people when I kept my
boat in Washington state.  I had to prove that I had paid sales tax in
California on the vessel, and I had to pay a small fee to Washington state,
even though I left the boat in the marina during the winter only.

[scott]  Yup, that's it.  

[bob]  There are also a number of legal ways to deminish various taxes, and
there is
nothign wrong with taking these steps.  That is what tax lawers and
accountants make the big bucks for.

[scott]  I would rather pay taxes to the government than hire a lawyer. Yes
I realize many government employees are lawyers.  My experience is if you
need a lawyer it's more trouble than it's worth.  I do have an accountant. I
have nothing against lawyers personally, I just want to keep my life simple.
Since I can't understand most documents a lawyer writes I avoid them.  

[Bob]  The US documentation has nothing to do with either protection of the
US
military or the military being able to sieze your vessel for national
defense.

[scott]  Really?  Are you saying in time of war the government doesn't seize
documented vessels?  I thought I'd read instances of that during WWII, but
I'm getting old and my brain is full, so I'm probably mistaken.

[Bob]  It is a good way of "flagging" your vessel when traveling overseas.
On
occasion rarely it may save some state taxes.  It gives a paper trail of
ownership and any liens against the vessel.  I have taken state registered
vessels to Mexico, with no problems.  But all the vessels I took to multip
countries were documented.

[scott]  As I said in my original post, I don't fully understand the issues
around documenting a vessel.  I don't understand why it would be documented
in another country if the motivation wasn't to escape paying taxes?  Again,
I'm pleading ignorance in this regard.  Perhaps someone can elaborate on why
a boat bought and paid for by a US citizen, who lives in the US, pays taxes
in the US and keeps his boat in the US would document it offshore (if for
any other reason that to escape taxes).

Scott Bulger, Alanui, N40II, Seattle WA