When purchasing a vessel with a price tag north of a few 100k, are there 'strategies' that can be used to avoid certain taxes?
I presume that buying in a state with no sales tax is one way, but what happens when you go back to your home state and register the vessel? Surely you'll get hit with use or personal property tax?
Also as an example, lets say my boat is registered in TX and we spend a good chuck of a year in FL. Will FL try to hit us with some sort of tax?
Thanks for the help!
The best advisors in this area are the boat Documentation services. They're aware of all the ins and outs.
Every state is different and sometimes the laws of adjacent states may conflict and could lead to the worst of both worlds hitting you.
Initially you have the issue of sales and use tax. That's based on where you purchase, how long you'll have the boat there, where you'll be taking it, and where you reside. While sales tax varies, the likelihood of totally escaping it is slim unless you both live in and intend to keep the boat in a state with no sales tax.
Registration is generally not expensive, but it often is what sets sales and use tax in motion. Once they have been paid, you may even find yourself needing to register in more than one state as you use the boat, but the registration cost is mild, just the other taxes it can lead to.
Property tax is assessed annually on the boat, based on where it physically is but with some caveats. Another state may claim they're the state of principal use. Each state has different rules.
In the case of Florida, they have a fairly high sales tax but limited to $18,000 which comes into play on $300k boats or so. Florida, however, has no property tax on boats so ultimately is among the lower cost places to keep your boat.