NEWS AND NOTES
Blue Water Sailing
May 12, 2010
Cruising Boaters Could Be Taxed For Staying Too Long In Some States
Cruising Boaters Could Be Taxed For Staying Too Long In Some States
Staying too long in one place can ruin a good thing. At least that's the case with boaters making lengthy journeys, who are finding themselves targets of cash-hungry states looking to balance their budgets. In most states, a privately owned recreational boat must be registered in the state where it is principally used, and any taxes paid to that state. A problem arises when the boat leaves this principal-use state and enters a new one, either for a long visit, extended cruise or lengthy repairs.
Boat Owners Association of The United States (BoatUS) says boaters may be subject to various sales, use, excise, or property taxes when they remain in one location for a consecutive number of days, or over-stay their visit for a certain number of aggregate days per year. This "grace period" is often 60 to 90 days but as little as 30 days in two states (CO, NH). Also, if the principal state's tax is not comparable to the tax in the state the boat is visiting, the second state can levy the tax making the boat owner liable for the difference.
To help boaters understand this issue, BoatUS offers a new online map highlighting state sales and property tax rates with links to state tax departments, as well as registration information and "grace periods" at www.BoatUS.com/gov/StatetaxRegistration.asp.
In several recent cases, BoatUS reports tax authorities walking the docks, inspecting marina records and aggressively enforcing tax codes. "States are strapped for money, and they are increasingly looking at these visiting boats," said BoatUS Vice President of Government Affairs Margaret Podlich. "We urge cruising boaters to be aware of potential tax liabilities when traveling, plan accordingly, and be ready with documentation in case disagreements arise with tax authorities," she added.
"We believe boaters should pay their fair share of taxes," Podlich continued. "However, our concern is that some boaters are being unfairly targeted for this tax levy. Some tax agencies have made it difficult to dispute the tax, even with accurate owner recordkeeping such as log entries, marina and fuel receipts or repair contracts. These documents are critical for boaters to keep, and are often the only way to fight an unjust tax bill," said Podlich.
