Purchasing a new boat is exciting and often filled with many questions. Today let’s talk about some of the most common questions we hear about taxes.
Is there sales/use tax when you purchase a boat or yacht?
Are you required to pay an annual property tax on your vessel?
All States have their own specific tax codes and laws surrounding the purchase and sale of boats. While we do most of our transactions here in California, we have experience in many other States, and it is critical to understand the framework of the State you are buying or selling a boat in. Here is a great article from the state of CA, full of great information that may be useful to you.
https://www.cdtfa.ca.gov/industry/vehicles-vessels-aircraft-guide.htm#Vessels – Tax Guide for Purchasers of Vehicles, Vessels, & Aircraft
When purchasing a new boat, this is a great resource. Or contact us here at 50 North Yachts to help you with any inquiries or concerns, while we do not offer any tax advice, we are always happy to help and may be able to point you in the right direction!
No blog about vessel tax would be complete without addressing another prevalent question…
Are there any opportunities to purchase boats without paying sales tax?
This is a complex question, however, the simple answer is no. That said, you may have heard about options to purchase the LLC that owns a boat as the sole asset (purchasing an LLC is a non-taxable event) or taking offshore delivery and keeping the boat out of California for a specified amount of time. These do have tax implications or potential tax savings but that is a topic for a different blog. If you would like to discuss this, please contact a tax professional or give us a call and we can help point you in the right direction.