Double taxation on property tax?

[adornato]

My Mainship 30 spent its first year in Marin County California last year. I received an assessment valuation of the boat of approx 77,000 which is about 7000 more than I paid for the boat in December 2018.
(the resultant tax is about 1.2% per year or 850.00 USD per year)

Inquiring minds could ask what an assessed value of a boat means. One definition from California Board of Equalization is the market value, i.e. a reasonable sales price. So how could the boat now be worth 10% more than I paid for it in 2018?
Boats don't generally go up in value every year..

Marin County (and San Francisco County) add the amount of the 10% sales tax I paid to the State of California when I bought the boat in 2018 to the "value" of the boat. Thus I am paying tax on the amount of a tax I already paid. The convoluted logic escapes me. I understand this has been legally challenged in California courts and the challengers lost.

Is this a practice elsewhere in the country or unique to Caliunicornia?

 

[tiltrider1]

Some one did the paper work wrong. No one is as aggressive as California when it comes to taxes on boats. My slip neighbor, who lives in Sacramento, bought a boat in WA, paid WA sales tax, registers and keeps it in WA and still California is trying to get tax money from him regarding the boat. Lucky for him he bought it through a very reputable broker who has all the paper work for him to stop the Board of Equalization from proceeding.

 

[Donsan]

First, a sales tax is not a property tax.

Second, not all states have personal property taxes on assets such boats and automobiles. Florida does not have personal property taxes.

Third, in general the rules on real and personal property taxation are usually set at the state level. California may be different and let localities come up with their own rules but the states often place constraints on that. Most taxing jurisdiction use a concept called "true cash value" which does include sales taxes paid. Find it surprising that the method of valuation you describe was upheld in the courts as it doesn't seem reasonable at all.

 

[adornato]

my boat was purchased in Southern California and the marina in Northern California reports what boat are in its slips.. nowhere to hide.

 

[HiDHo]

Marin county would say congratulations, you bought at a real bargain price below market value according to the valuation information they are required to use.

 

[bayview]

It is CA after all, no further explanation is necessary

 

[warfdog]

The other posters are correct - Marin county, or any county in California for that matter, does not have any role in collecting sales/use tax. That is the job of the CA BOE, or if it is not USCG documented the CA DMV.

Sales/Use Tax - what you pay the State of CA (one time) when you acquire any tangible personal property or physical property other than real estate, new or used, generally from 7.25-10.5% depending on the county in which you reside.

Property Tax - what you pay your County annually based on it's assessed value, generally 1-1.45% of assessed value. In this manner all property eventually reverts to the state.

It is your responsibility to avoid, not avert, property and use taxes by every legal means possible. Same goes for all other taxes.

Both the Counties and the BOE (state) are absolutely ruthless in going after revenue, and not all counties act with the same policies/appeals process with regard to property tax. Bay area counties are notoriously aggressive. Generally, you have to follow their local appeal process which involves a review board, who's decision are swift and final, and you can expect in most cases to lose the appeal if the boat is berthed in California for any length of time. There is no recourse in the courts.

Over ten years ago, I purchased an expensive boat in Oregon and left it there to use as a second home. To make sure I did not get taxed by the CA BOE in arrears, I filed a BOE tax return on the boat once I changed plans and brought it into California over a year later. I was able to document that I used it regularly (airfare and fuel purchases in Oregon, a company local office in Oregon, etc.), I didn't have any intent of moving it to CA when I purchased it (no advance paperwork on relocation service, proof of long term slip rental, etc...).

In the end I did not get taxed on my purchase through the formal BOE process.


No county in CA should use any state's sales/use tax as part of the basis for valuation of a boat for property tax. You should easily appeal the valuation in my opinion. However, if you keep it in a municipal (city or county owned) marina you should anticipate that you will also be taxed on the value of land under your slip where it is kept. In addition you will be charged for non-secured property tax in the county in which it was located on Jan 1 of each year typically going back 8-years. Appealing the valuation could trigger a review of prior taxes paid or skipped.

My county (San Mateo) charged me in arrears for the full 8-years of property tax on a trailered fishing boat that spent Jan 1 of each of the preceding years in other CA counties. I argued that they should coordinate with the other counties to determine if I did or did not pay property taxes in those years to the other counties and they argued it was my obligation to prove I paid elsewhere. Fact is – I didn't pay for those years and so they had me over a barrel. I believe that the formal rule is that you are required to report the boats location to the county tax collector on each Jan 1st - no idea how you would do that.

Disclaimer - I am an expert at paying taxes, not avoiding them. Suggest you follow up with your local friends and tax experts here to see what your options are...

https://www.marincounty.org/depts/ar/divisions/assessor/boats

Here's the marin county vessel property tax statement you "are required to file annually"...but only if you are a documented commercial vessel, so I don't know what you do when they don't find and bill you.
http://www.capropeforms.org/forms/Marin/BOE-576-D/pdf/

Oh that reminds me - I forgot to file my report this year

 

[HiDHo]

An annual property tax on vessels, is California the only state that property taxes vessels ? What exactly do they fund from the tax ?
Also does California personal property tax motor vechiles each tag renewal ? Alabama does but the annual real estate taxes are very lenient, kind of an offset.
Inquiring mind, just interested in the various state taxes and what the tax funds.

 

[jimfrens]

New Hampshire, Massachusetts and North Carolina levy a property or excise tax on motor vehicles and boats. I'm sure other states do as well. In addition to the NC property tax, they assess $130 per year electric vehicle fee to make up for the gas tax they're not collecting. And they want to double that fee. Go figure.

 

[JLD]

Virginia has a personal property tax as well on boats, rv's, cars, etc. I believe, however, that it is set at the county level. Many popular boating counties, like where Norfolk is located, have set the personal property tax rate at almost zero, so boats basically are exempt from the property taxes.

I have done spreadsheets on the locations that we are interesting in retiring. All states tax you to one degree or another: income tax, property tax, personal property tax, sales tax. It's interesting to see how some areas that are touted as low tax areas, actually turn out to be pretty average when you look at all the taxes one would pay in the state.

Jim

 

[jimfrens]

The below site gives an overview of each state's major taxes with a view to retirees. However, there is a lot more to making a retirement decision than just taxes. I retired to NC which is not particularly low-tax, but housing costs in this small town (Edenton) are low enough to make up for a lot of taxes, and the quality of life is high.

https://smartasset.com/retirement/retirement-taxes

 

[OldDan1943]

Dont get me started on double taxation....

 

[HiDHo]

I don’t mind paying a tax to fund a legitimate program. Example, Alabama has a MSD program requiring a yearly inspection of MSD’s funded by a $50 fee and decal placed in a visible location on the port side for compliance.
TVA has a Clean Marina program.
My boat registration fee is $75 yearly funding water related programs.
The OP yearly tax of $850 on a $77,000 boat valuation seem excessive IMO when you think of all the boats in California paying yearly on value.

 

[JLD]

The problem with websites like smartasset.com is that they focus on income taxes, when they are also many other tax streams like property tax, personal property tax (where appropriate) and sales taxes.

I would agree with Jim that there is more to retirement decisions that just taxes. North Carolina is on our short list of retirement spots as we would also agree that housing is moderately priced and the quality of life is high in North Carolina.

Interesting, at least to me, that since my federal pension would not be taxed (as a started working before 1/1/84) I would pay less total taxes in North Carolina than I would in Daytona Beach, even though Florida has no state income tax. This is due to the high property tax in Daytona Beach. If I retired in The Villages (where my Mom lives) I would pay less total taxes that I would in North Carolina.

Bottom line is that one really should look at all the taxes as they might apply in an individual case.

Jim