California Boat Buyer

[jonbabco]

I am looking at buying a boat in CA, I am un able to move it for several months. Can I avoid paying the 8.75% SFO CA use tax? --- or should I look for a boat in another state or wait to buy when I can move it right away?

[redbopeep]

We purchased a boat that was sitting in CA. The multi-state transaction took place using BoatUS closing service (quite a nice service, by the way). We were Florida residents and the boat's owner was living in Oregon at the time. We didn't pay CA sales tax on this USCG Documented boat (no CA registration) but we will have to pay sales tax in Florida if/when we get the boat into the state of Florida. Its not there yet as its in-between being worked on at a boatyard.

We were told by the folks in FL that if we paid CA sales tax, we'd just show proof of that to the folks in Florida so we wouldn't pay for sales tax twice. Usually, when you transfer the title, you'll pay the sales tax, but with the USCG Doc boat and no CA title, we didn't even know HOW to pay CA tax easily. We'd have paid it if the boat had a CA title, btw.

If the boat you're looking at is registered in CA, and the owner resides in CA, you'll probably end up paying sales tax in CA unless you have the owner deliver the boat elsewhere. If you can delay the purchase (put a non-refundable deposit on the boat) until closer to the time that you can have the boat moved, then have your purchase take place in your state instead of CA.

We ended up contracting for purchase of the boat but not actually owning/paying for the boat for 7 months. BoatUS escrow service came in handy for that reason. In our case, we couldn't take delivery of the boat because we didn't have anyplace to put it for 7 months and as soon as it changed hands, it would have been evicted from the marina it was in (long waiting list at that marina with no preference given to boats already in the marina). our situation, as a byproduct, ended up avoiding CA sales tax, but that wasn't on purpose.

Hopefully someone else has a good opinion for you. You're likely to have to pay sales tax somewhere, by the way!

Edit:

Reread, your question is about USE tax. If the boat is located in CA the last week or so of 2007 and the first week or so of 2008, the 2008 tax will be assessed. That time frame is when all boats at all marinas and yards are checked.