State Seeking User Tax

Evidently he "bought their boat in another state that doesn't require sales taxes for boats, brought it into Maine within the first year of ownership, and had it available to use for at least 30 days". So he goofed and ended up owing the taxes he tried to get away without paying. Then, instead of paying the taxes while appealing, he rolled the dice and lost incurring penalties. Welcome to the world that most of the rest of us live in. Does he also happen to spend his summers in Maine? No sympathy. Considering Maine's short season that law shouldn't frighten anybody away from cruising there.

there is allway's two sides too every story i have been faced if simalier problems i have been charged dock fee's for going into port and buying fuel now befor we go any where we check the tax law's and look for all the gotuches there are (and there are a lot more than you realise )befor we start any trip

just some thoughts

travler

The people who will suffer most if the Maine law is upheld are the people who work in Maine's boatyards. Why would I bring a boat to be refit in a state that is going to collect such a tax? Down the line , it will also hurt the taxing authorities who will collect less taxes from refits. Anyone remember who got hurt by George Mitchell's luxury tax?

If I drive my car to Maine and use there highways, will I be taxed?

Doubt it. Check that wording again. Binging a boat there for work won't expose you. If you've paid tax elsewhere it won't affect you. If you don't stay there for effectively half their summer it won't affect you. The only one it will affect is the one who didn't pay sales tax and wants to use Maine as their summer port. Simple cure, pay sales tax like the rest of us do.

And people question why we flag our boats offshore. It's because of this crap.
And their single, narrow minded viewpoint on it is: "we're doing our job. collecting taxes". That logic and system of thought and law is not conducive to yards, marinas, yachties and cruisers.

You can sheer a sheep many a time, but you can only skin him once.

Yes, at the gas station.

The rest of who? Not all of us live in states which charge a sales tax. I can just avoid going there in the first year of ownership and not worry about it either, or as ,any will do, they won't bother going at all.

Yes, the rest of us in the states. I pay (I believe) 8.75% sales tax on exerything I buy from a bagel to a boat. Like my mother used to tell me "If you didn't make or didn't buy you wouldn't have to pay it so there's no point bellyaching". Personally, I love hearing a person that can afford a multi-million dollar toy grumble about having to pay what every other resident pays. To hear that one bet he didn't have to play by the rules and turned a 60K tax bill into a 120K bill and now is going double or nothing again is laughable. This fellow didn't spend $100,000 to 'help the local economy'. He did it because he keeps his boat in Maine and needed work.

as much as i can understand defending the collection of sales and use tax on boats bought out of state and used in one's home state (where they live and pay taxes), Maine tax collectors actions are plain stupid.

Maine has a number of good yards and they're loosing business.. that means less revenue for the state. Maine is also is big cruising destination, why not encourage owners to spend more time (and money) in state waters.

tax the rich... doesn't get more short sighted than that.

remember the "luxury tax" which sent the general aviation and marine industries in a nose dive?

the impact of $2M boat on the economy where the boat spends time is far greater than a one time 5% tax...

While Ny Cap is correct in saying everyone should pay applicable sales tax (8,75% in NY) it is also a fact that states compete on tax rates, and Maine boatbuilders will have a hard time competing against boatbuilders in low or no tax states if the state insists on collecting sales tax on their customers' boats.
In the present case, the applicable tax rate on the work would be over 60%: $60 000 on the value of the boat + sales tax on the $100 000 worth of work. Why would anybody expose themselves to that kind of tax rate when they could avoid it by having the work done in another state? Again, the Maine marine industry will be the principal victim when people decide to store and work on their boats in other states.

Because they live there and don't want to spend the money it will cost to transport their boat to Florida or even Newport. Oh wait, Florida will hit you with tax also if you spend too much time. Besides, this owner was doing the work there because "thought he was helping the local economy". Wonderful, now he gets to help it for real. BTW, we did all notice "A retired Maine businessman". He didn't exactly bring his boat there to 'help the local economy'. He wants to play, let him pay and quite being a cheap crybaby. I'll bet that he also bargained down the yard to bare minimum for the work as well. So the only economy he's looking to help is his own.

The 72 Ft boat probably moves between his houses in Maine and FL ,so any yard or state between the 2 is available to him at little incremental cost.

You are correct in saying that few people are going to be sympathetic to this individual, who should have studied the law more carefully. The important fact remains that the next person may be better informed,particularly because of all this publicity, and do the work elsewhere. At that point the real loser will be the Maine marine industry.

What state would you suggest he bring his boat to that won't hit him with a tax if he meets that criteria? Granted other states let you stay longer, but that's because they have a longer season. Remember, he didn't get hit by the tax for bringing his boat there to have work done, but for using his boat there almost the entire season. The only boats they may lose are those who think the rules don't apply to them. If you're cruising there and require work or if you want to have a yard there do the work on your boat you won't be charged the tax. If you paid tax elsewhere you won't pay the tax. If you don't pay taxes and want to enjoy the state of Maine (or Florida or NY or...) for the entire season then cruise up to Canada or down to Boston for a few day. Boats that just sit don't help local economies.

Rhode Island has no sales tax on boats. Also, the original article says Maine admits the boat was in the yard for most of the period, only going out twice for what the owner termed sea trials

Then he should have brought it to R.I. They do fine work there. Oh, but then he wouldn't have it in his back yard to show off for his friends. If he was so concerned with "helping the local economy" why didn't he buy it in Maine? Was the boat on the hard or did he in fact 'have it available to use for at least 30 days". Most boats this size don't move. Did he have it in a slip at the marina where he could entertain his friends aboard? I assume that he had only crew on board for those "sea trials" or was he actually entertaining? This guy is just a tax cheat who got caught. He bet he knew the loopholes to the law better than the tax man and lost. It has no effect on the normal cruiser. HE however seems to be doing his best to hurt the local maritime businesses by trying to scare people away from Maine when this law in fact has zero effect on 99.9% of the boats that cruise there.

One of the things I noticed in the article was that the boat owner has homes in Florida and Maine, and that he bought the boat in Florida. I will go under the assumption that he purchased a "90 day decal" from the State of Florida to legally avoid sales tax in Florida as a "non-resident".(Now changed to 180 days) This allows him to use the boat for 90 days (now 180) here before moving it to another "taxing jurisdiction". To get the decal he would have to show the Florida dealer an out of state drivers license. So as a Maine resident he should pay tax there according to Maine tax laws. If he had paid tax in Florida, he would have had a credit with Maine.

I recently asked readers here to comment on a new proposed Florida tax law that would cap the maximum sales or use tax at $18,000 in Florida. This boat owner would have been better to pay that tax if it had been available.

IMO

On first read I was sympathetic to the guy. Right up until I read that he didn't pay sales tax anywhere on the boat. If that is true, then I am in complete agreement with NYCAP. If the guy's other residence was a state with no tax, then I could sympathize but it sure looks like he was trying to avoid paying tax in either or his resident states.

Being a tax paying FL/NY resident, I say too bad for him. It looks to me like he used the boat in Maine and misread the rules.

My .02

Available to use ???

I wonder if the vessel is in the ship yard would they consider it" available "to use???