Taxes

**GoBig** · 01-13-2009, 01:57 PM

RE: Taxes

What state are you in? I have never heard of this before. In CA we pay sales tax on the total sales price. The trade-in is just a down payment. We also have yearly property tax on vessels that runs about 1% of book value.

**kevfran99** · 01-13-2009, 02:17 PM

RE: Taxes

In most states your are correct with your 1st statement. you wold only pay sales tax on the remaining 10K. Any transactions that take place from individual to individual there are NOT any taxes paid. The only way you will get a sales tax break is if you trade your boat in to the same dealer you buy the new one from. You can not sell your boat to one dealer and then get the tax break from the other dealer. In a) there would not be any sales tax paid. The dealer doesn't pay any and if you buy another from an individual you don't have to pay any. The dealer will just charge it when they resell your boat.

Gobig......CA is ripping you a new one if they don't give you a break! PDT_044

**crowland** · 01-13-2009, 03:31 PM

Re: RE: Taxes

What you've described in tax terms is a 1031 like-kind exchange and as far as I am aware you can only do this if the property is used for business-purpose and purchased by a business. The 1031 exchange is only used to offset a realized gain, not a loss. So unless you have a gain from the original purchase price of the boat (which is highly unlikely) this wouldnt be helpful to you. That is the only way that you would be able to combine your sales and purchase prices to arrive at a net position. Keep in mind this is also at the Federal level and not at a state level. Perhaps there is a state out there that has the same laws, but I am not aware of any.

Just FYI for Personal Property purchased in Texas we pay private party sales tax even when coming in from out of state, i.e - I had to pay 6.25% in sales tax to Texas on my boat even though I bought my boat in Florida over the internet through a private seller. The only way around the tax was to not title the boat/vehicle, which is no good unless you live on a private lake and never need to register the boat.

**crowland** · 01-13-2009, 03:36 PM

Re: RE: Taxes

Originally posted by kevfran99

In most states your are correct with your 1st statement. you wold only pay sales tax on the remaining 10K. Any transactions that take place from individual to individual there are NOT any taxes paid. The only way you will get a sales tax break is if you trade your boat in to the same dealer you buy the new one from. You can not sell your boat to one dealer and then get the tax break from the other dealer. In a) there would not be any sales tax paid. The dealer doesn't pay any and if you buy another from an individual you don't have to pay any. The dealer will just charge it when they resell your boat.

Hey Kev not trying to prove you wrong or anything, but just curious if this is what you have experienced in GA? Just about everything that you described for GA is the complete opposite from TX. I am wondering if it is something to do with state taxes?Is there a state income tax in GA?

**kevfran99** · 01-13-2009, 04:05 PM

Re: RE: Taxes

Originally posted by crowland

Originally posted by kevfran99

In most states your are correct with your 1st statement. you wold only pay sales tax on the remaining 10K. Any transactions that take place from individual to individual there are NOT any taxes paid. The only way you will get a sales tax break is if you trade your boat in to the same dealer you buy the new one from. You can not sell your boat to one dealer and then get the tax break from the other dealer. In a) there would not be any sales tax paid. The dealer doesn't pay any and if you buy another from an individual you don't have to pay any. The dealer will just charge it when they resell your boat.

Hey Kev not trying to prove you wrong or anything, but just curious if this is what you have experienced in GA? Just about everything that you described for GA is the complete opposite from TX. I am wondering if it is something to do with state taxes?Is there a state income tax in GA?

yes.......it was the same way in Kentucky where I bought my boat also. And if I remember correctly the same way in FL.

**MARK-S** · 01-13-2009, 04:23 PM

RE: Re: RE: Taxes

Obama will find a way to tax you.

**mf01** · 01-13-2009, 04:48 PM

RE: Re: RE: Taxes

In the two states (Texas and Illinois) I've lived in, you are taxed on the difference in price. You would pay tax on the 10k mentioned above in Texas, which would equate to $625. This only works if you trade it in. The state would get the tax on your used boat when the dealer sells that boat to someone else.

**GoBig** · 01-13-2009, 04:57 PM

RE: Re: RE: Taxes

Yes, CA is ripping us off. 8.25% sales tax in my county on all purchases new or used, private party or not, in-state or out of state....doesn't matter. Then you get kicked in the arse again with 1.08% annual property tax on all boats, and I haven't even mentioned registration and licensing fees.......and our State is still going broke! I won't get started on a political rant.......

**MARK-S** · 01-13-2009, 05:07 PM

RE: Re: RE: Taxes

Pelosi 2012.................

**SuperSquirt** · 01-13-2009, 05:58 PM

RE: Re: RE: Taxes

Tennessee, Tennessee, there ain't no place i'd rather be........no income or property tax! Around 7% sales tax on boats

**ClemsonDave** · 01-13-2009, 07:52 PM

RE: Re: RE: Taxes

No sales or property tax in Delaware either......

**east tx skier** · 01-13-2009, 08:13 PM

Re: RE: Re: RE: Taxes

Originally posted by mf01

In the two states (Texas and Illinois) I've lived in, you are taxed on the difference in price. You would pay tax on the 10k mentioned above in Texas, which would equate to $625. This only works if you trade it in. The state would get the tax on your used boat when the dealer sells that boat to someone else.

Same with private transactions. Buyer pays 6.25% tax on the used boat to the TDP&W and 6.25% on the trailer (assuming it's not a "homemade" dual axle trailer with brakes and a folding tongue) to the county tax assessor where you live.

**TwinTip** · 01-13-2009, 08:24 PM

This is for a transaction in Florida. The first statement I know applies to boats and cars. Not sure if every state does this (it seems that CA does not) but there are many articles on the web that cover this.

It seems that unless this gets done through the same dealer, taxes will have to be paid for the amount of the new boat.

Thanks to everyone for their feedback. Back to crunching some numbers........

**2004196** · 01-13-2009, 09:49 PM

Tax

TwinTip

As you see, every state will have difference. If your buying a boat from a dealer and have a private party interested in your boat, the dealer may do the paperwork for your sale and you will receive the tax credit for your sale against the purchase of the new boat. They may even do this at no charge just to sell you a boat.

In Washington, sales between private parties are taxable when you go to license the boat and register it into your name. If you pay $20k for a used boat, you are taxed on the reported sale amount. The seller can give you a receipt for say $12k saving you tax on 8K. If the amount is too far out of what the stated value is supposed to be (NADA), WA will have you take the vehicle to be appraised so you have to be careful at what you try and report your sale at.

You can also look into a "gift", the seller just happens to be your brother in law and is giving you the boat, thus "tax free", in WA anyway. What cash trades hands is only known to you and the seller.

Go see a car dealer, if anyone knows the way to beat the tax man, it would be a car dealer.

Good Luck!

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