If you don't live in Michigan, then why would you have to pay sales tax there??? I would think it would be the same with boats as it is with cars... isn't it? I don't get the point about trucking the boat out of state... what would it matter whether you personally drive the boat home or a trucking co does?

If you do have to pay Michigan sales tax, then can you get a credit for what you already paid to MI when you register it in MO???

 

Thats Michigan for you!!

Its called Michigan Sales Tax. You bought something in Michigan (thats the sales part) so they will tax you on it.
The reason you can get out of the tax if someone else picks it up and delivers it for you is that you were not physically in Michigan buying the boat. Sounds stupid, but thats how they play it here. They can't tax you if you were not physically here buying something.

 

thnaks Red Stripe.
its starting to make sense to me now.

wonder what it will cost to have a transport company drag it to the nearest state line?

ill get around this somehow

 

Yes, this is correct. I ran into the same thing when I was considering purchasing a boat in Illinois. The legal remedy is to have it trucked to the state line and take possession across the state border. Most dealers are willing to turn a "blind eye" to this requirement, however they are the one's that bear the brunt of the liability if caught turning the "blind eye".

It all boils down to where to take posession of the boat.

 

Jeff has the right idea. I live in Indiana but have purchased boats from out of state a number of times, and it seems like every state is just a little different.
With Indiana, they don't care how much tax you pay somewhere else, you will still pay Indiana the full amount due this state without any reduction by paying tax in another state.
Usually, just to be safe, if you do not have a dealer's license ( and in some cases even if you do) you should try to take delivery of the boat outside the state lines of where you buy it.
I think there's kind of a gray area where we are not supposed to pay the same tax twice, but with the current budget crunch in most states, they kind of bend the rules to try and get more dollars in the state's coffers.

 

Well, I'm not an expert here, but I know some info I read here is incorrect.

I live in MI, and LOTS of people go to Indiana to buy cars and trucks. They pay MI sales tax and not Indiana. I bought my boat in IL and I paid MI tax because I live in MI.

There is some paperwork I believe must be filled out to comply with recprication (I think that's the technical term). Some dealers might be unwilling to do this, but it is possible.

The one thing I cannot get away with is paying IL tax if I live in MI. Because if I trade a $50k boat in on $100k boat, in IL I'd pay sales tax on $50k, in MI we pay it on the full price, or in the case $100k. It sucks.

One person once told me, they'll get you coming or going, but they can't get you coming AND going. It's worth checking with an accountant or someone knowledgable on the subject. If I'm wrong, let me know, but I purchased in another state and paid my states tax. Paperwork has to be done, but dealers should be accustomed to that.

Mark

 

I just recently bought a GMC Sierra in MI, I gave the check, the seller signed over the title, I came home MD and paid MD sales tax.

 

I was a F/I manager for a car dealership 5 years ago, if my memory serves me correctly, if you go to a local boat or car dealership or DMV, ask for a Application for Title for MO. and fill it out. Give a copy to the dealership in MI. for their records showing the title will be a MO. title. They need to send this to the MI. DMV for you along with a copy of the tax statement. This should solve your problem.

A lot of dealership do not have the resources to keep on hand a Application for Title for every state, so it is easier for them just to turn it in to their DMV as a MI. That means you need to do the foot work for them and get one for MO. All states application for title are different, there is not a standard form.

 

most states have reciprocal agreements when it comes to sales tax. However you don't get money back if the sales tax in the state you purchased the boat or vehicle is lower than in the state you title it.

I bought my truck in Pa and paid 6% sales tax there. I moved to MD where the tax is 5% and was granted a tax waiver because the sales tax was higher in Pa.

Cars often differ from boats because they know cars are normally located at your place of residence. Boats are different because many people store and use boats in states that differ from their state of residence.

For instance if you live in Pa, but use your boat primarily on MD waters, you'd better pay MD sales tax or be prepared to be stopped and ticketed if the marine police get accustomed to seeing your boat on MD waters.

If you live in another state but store and use your boat in MD you're also subject to MD sales tax and must register in MD.

 

heres the sticky part.

last boat i bought came from oklahoma. didnt have to pay sales tax in ok.

took the boat home to missouri , documented it with the coast guard and only had to pay missouri 650.00 for
in-liew-of-sales-tax since i documented.

can i avoid paying sales tax in michigan AND missouri if i have the boat transported out of michigan?

or , did i luck out last time?

 

You should not have to pay sales tax. I bought a Fountain in MI two years ago, and I didn't have to pay sales tax there.

 

GrumpyBullet , did you buy from a broker or individual?

did you avoid missouri sales tax by documenting the fountain?

thanks btw , you may have just provided some light at the end of the tax tunnel

 

I am certainly not an expert on this, but I can share my experiences in this state (Indiana).
Once purchased a Pachanga that was documented. I consulted extensively with my cpa and with the state watercraft licensing dept. about what is and is not legal here.

I was told that a boat can be documented and not registered with the state (state registration is how they get the sales tax), but the boat can only be used on a body of water or river whose main flow ends up in an ocean. In other words, a land locked lake without a river that flows out to big water wouldn't qualify. Also, a boat that is documented only is not allowed to be slipped over-night or buy fuel on any body of water that doesn't go to an ocean.

They told me that most states that allow documented boats also require the boat to be registered with the state so they can collect the sales tax.

They don't yet do it with boats here that I am aware of, but with airplanes, if any airplane is on the ground in this state for 60 days, the owner gets a bill for excise tax. They don't care if its here for maintenance or what. They don't care if it is licensed and based in Alaska.
They require all the small airports that cater to private aircraft to report all the registration numbers in hangers and on the ground twice a year. That way they put the reg. # in the computer, and if excise tax hasn't been paid on that airplane, the owner gets a bill. This had been fought in court, and the state has won. I sure hope they don't try this with boats. Seems like they will do most anything to get money.

They got me for excise on an airplane once, so I'm kinda educated about that.

 

I bought mine from a broker (freedommarine). I was unable to dodge the MO sales tax because the boat was not big enough. I just bought a Cigarette from FL and didn't have to pay FL sales tax either. But this time I will be documenting it. what size boat are you buying? It has to be 5 net tons. Length X hight-est point on the rub rail to bottom of hull.

 

288 Sunsation

it exceeds the net tons requirements.

 

Yes, thats how it works. In order to not have to pay sales tax from the point of origin, you have to have a "Bill of Lading". Basically it's proof of shipping. You can try to talk the dealer into transporting it out of his state, and do the paper work out of Michigan. As you said you could hire a company to get it out of the state, then you will have a "Bill of Lading". As a seller of replica Shelby Cobras we have sent them out of CA to AZ, transfered the car to the owner there to help them save money on sales tax. Of course we charged them a fee for the transportation. Since we are not a shipping company, we kept all the gas reciepts to prove that we actually transported the car to the location.

 

Most states do still have to pay sales tax on Documented boats, Thats the loop hole in Missouri make you pay a State tax but you do not have to pay sales tax. I never had anything either time that proved that the Boats where transported. The only thing I had was a Bill of Sale. Thats all they request when documenting or at the license office.

 

just got off the phone with missouri. will only have to pay 650.00 for in-leu-of-sales-tax if i document.

i avoid michigan sales tax as long as i have the boat trucked out of michigan.

ill probably have it towed to ohio and drag her home the rest of the way myself.

i new there was a way out of this

 

The 650 is the use tax, which there is no way around unless you never register the vessel.

GB the state of Missouri doesn't care where the boat came from as long as you have a Bill of Sale. The shipping documents will need to be shown to the state of Michigan tax board to show why the dealer did not collect tax on the purchase.

 

Why don't you have a member in MI tow it out of state for you? You might not have to caugh up as much as you would for a towing company. You could create a receipt for the service.

 

Better yet, why don't you take your truck and a friend of yours and go get it. Have your friend say that he is being paid by you to pick it up.

I am assuming that you never met the salesman.

 

WOT , hmmmmmmmm , sounds like a plan

 

I have bought a lot of boats but they are almost always from individuals. In Ohio we are taxed, at the title bureau, on the value of the boat when we title the boat and motor. If there is an outboard we are taxed on that value and issued a separate title. This has been regardless of where I purchased the boat which, I guess, has been around 12 different states

Trailers are not titled thus if it is purchased the day before or the day after it is not included in the overall purchase of the boat for sales tax purposes.

I am usually able to pay cash so if I am paying $30,000 for a boat, motor, trailer combo, the seller is usually willing to break the sale into different transactions and give me a discount on the boat/motor if I also purchase the trailer and boating equipment. (life jackets, lines, fire ext. anchor etc.) which is usually very expensive.

The seller gets $30,000 cash and I get a Bill of Sale saying I purchased a POS boat valued at say----$10,000. I am willing to pay $10,000 for the trailer the next day so I get my bill of sale dated the next day. A boat is useless unless I have the equipment that goes with the boat -- expensive at $10,000 but I promised to buy it all and unfortunately I have never been able to figure out who to send the sales tax to, so...

I have my bills of sale for each . When I go to the title bureau I pay my sale tax on my $10,000 POS boat (they always seem to need work) I pay my trailer registration fee (based on weight) I patiently wait to see who I pay my sales tax to on the equipment.

Sales tax on $10,000 vs $30,000---- you figure

Works on bigger and smaller boats also.

I have never served time but I have stayed at some pretty crappy Holiday Inns!!!

PS--- This is being written by a friend of Mosi's who is just using his computer--- Mosi would NEVER do anything like the above.

Thank You--- carry on fine tax-paying citizens:bandit:

 

Bought my Sunsation in OK, had them document it and didnt pay sales tax.
I thought that in MO if you buy a boat and wait 30 days you dont have to pay state tax??

 

Let us know how it works out.