[Psml] State Registration vs Federal Documentation

[Lu Abel]

In the time I've owned my boat, it's been kept in Rhode Island, 
Massachusetts, and California, so I've had to deal with taxing and 
registration authorities at least three times (I actually also had it in 
Maryland for nine months, but it was laid up the whole time and I never 
was bothered).

The first and most important thing to understand is that each state sets 
its own rules for registering a boat in-state and collecting sales 
and/or property tax on it.  It's also important to understand that these 
are two separate topics.  Although federal documentation exempts one 
from state numbering, states may still require state registration of the 
boat.  My understanding is that MD and NY require state registration 
stickers on ALL boats, including documented vessels (clarification 
appreciated).

There *is* a federal requirement that all boats be registered if they're 
not documented (33CFR173 covers boat registration and numbering).  It 
also requires that a boat to be registered in the state of its principal 
place of use, specifically defined as "the state on whose waters the 
vessel is or will be used the most."  (This could be interesting for 
someone buying a boat and then immediately setting out on the Great 
Loop).    It's not a whole lot different than owning a car -- no state 
allows out-of-state registrations on cars owned by residents.

Here's the full text of 33CFR173 
http://ecfr.gpoaccess.gov/e/ecfr/ecfrbrowse/Title33/33cfr173_main_02.tpl

Many states hold one liable for sales tax and/or property tax on a boat 
when the state is the boat's place of principal use, regardless of the 
age of the boat or when the current owner purchased it.

33CFR173 specifically requires that states recognize another state's 
registration for 60 days.   That doesn't mean, however, that the taxing 
authorities can't be more harsh, since the law appears to apply only to 
the registration authorities.

As far as the boater claiming that since he is a resident of California 
he doesn't owe tax to Florida, all I can say is "good luck."  If the 
boater is purchasing the boat new, the dealer will be very familiar with 
the state's laws on collecting sales tax.  To the best of my knowledge, 
a "purchase" in any state is subject to that state's sales tax, with 
"purchase" being defined as the time and location where title passes 
from seller to buyer.  If it's a private sale, different states have 
different laws (for example, here in California a private sale of a used 
car is not subject to sales tax while a sale by a dealer is).  State tax 
  laws are written to aggressively favor the state.  Many, for example, 
have no provision for refund of sales tax even if the item is 
immediately moved out of state and never used in the state (again, motor 
vehicles are a good example).

You are absolutely right that your friend also has to be careful about 
"principal use" laws.  Leaving a boat docked in a state while taking a 
break from the Great Loop may, in that state's view, suddenly make the 
state the place of the boat's principal use.  I'm not sure, but even 
laying a boat up for either the winter or for repairs may endanger the 
boat that way (I personally would hate to be in the gunsight of every 
state and municipal tax collector on the Great Loop, but that could 
happen).  Again 33CFR173 addresses only when the boat is being 
"operated" and not when it's laid up, but again state taxing authorities 
  may have a very different view of the world.  Hopefully some of the 
Great Loop guides address these problems.

Hope this helps,

Lu Abel




John & Judy Gill wrote:
> I need some help regarding State Registration and Federal Documented  
> of vessels, particularly with regard to California and Florida.
> 
> A boater on another subscriber list (Great Loop) is a resident of  
> California.  Bought his boat in Florida, took the vessel out of the  
> state within 90 days and then returned to Florida where he btained a  
> Florida non resident permit which did not require proof of paying  
> sales tax anywhere.
> --------------------------------------------------------
> This boater claims the following:
> 
> "California registration is derived from the title, or proof of
> ownership (also called a pink slip, even though it is multicolored
> now).  Some other states keep registration and ownership separate.
> California CANNOT register a federally documented vessel because the
> USCG documentation is evidence of ownership.  One can document a
> vessel or register a vessel in California but not both.  California
> counties can, and do, levy personal property taxes (but not sales tax)
> on documented vessels within their waters.  San Diego county is quite
> aggressive in collecting personal property tax on boats, planes and
> other property not taxed by the state if it is within their
> jurisdiction, even if title is held out of state.
> 
> There is no Federal requirement that a boat be registered in the state
> of principle use."
> -------------------------------------------------------
> 
> I have been trying to convince the boater that Federal Law requires  
> vessels to be Registered in their state of principal use (not state  
> titled) , and of course pay any sales taxes that apply in that state  
> (credit given to sales taxes paid in another state). This boater  
> claims that there is no Federal Law requiring registration in any  
> state of principal use???  He claims that because he is a California  
> resident, he can Legally Avoid Paying Sales Tax as long as he does  
> not return his vessel to California and can boat in all other states  
> using his non resident permit from Florida.
> 
> This boater is planning on going on the America's Great Loop Cruise  
> (a circumnavigation of the USA and Canada).  I have informed him that  
> he must keep on the move and be a Transient Boater everywhere or  
> another state may claim that their state has become his State of  
> Principal Use (more than 30 to 90 days) since he has been there  
> longer than any other state, and then make him pay sales taxes to  
> that state (this is the position taken by the state of Maryland where  
> I keep my boat).
> 
> Please be as specific as possible in your reply including CFR  
> Numbers, State Law numbers, etc.  Thanks!
> 
> D/Lt John Gill, AP
> USPS Certified VSC Examiner
> Pennsway (PA) Squadron in D/5
> 
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