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Posts: 134
| Can someone please clarify the sales tax on used boat purchases? Is a used boat subject to the 5.5% sales tax if purchased from a private seller? From a dealer?
Any loop-holes to save some money??
Thanks for the help. |
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Posts: 292
| if you buy a used boat in ILL you pay tax on the boat only not the total purchase price .also the IRS told me to use 6.25%. |
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Posts: 134
| Addition: I am a Wisconsin resident |
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| If you purchase from a private seller you can lie about what you really paid. I wouldn't recommend it, but it's common. If you buy from the dealer you're paying full tax. |
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| What you don't want to pay taxes but I suppose you will vote for taxing the rich
Man up and pay your fair share |
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Posts: 134
| I do pay my fair share and no I don't believe in redistribution of wealth. |
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Location: Green Bay, WI | I just paid 6% on a boat I bought in MI. I thought you paid sales tax in the state you lived and registered it...but the dealer told me they were just tagged by Mi, because they had been doing that. Apparently, MI decided that it was losing too much money on interstate sales, so I had no choice but to pay 0.5% more tax than charged by WI (including my county tax).
TB |
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| Personally I think the person to pay the tax is whomever buys the boat (or anything else for that matter) new. When buying used you shouldn't have to pay tax - the tax was already paid by the original owner. Why does it need to be taxed again? I'm sure there's more to it that I admittedly don't understand, but the whole idea doesn't seem fair to me. |
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| In WI you pay tax when you title the boat. Only the boat hull itself is titled with the DNR not the motor or trailer. Like what was already said, you can lie about what you paid, but that is always a bad idea. |
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Location: 31 | muskiehunter2 - 5/13/2012 8:08 AM
if you buy a used boat in ILL you pay tax on the boat only not the total purchase price .also the IRS told me to use 6.25%.
Not sure if you mean from a dealer or private? I would assume privately since everything would have to be taxed from a dealer in the state it was purchased like Tom says. However, unless it's a prearranged price with the private sale, how did/would you determine how much for the boat and then how much for the motor/accessories/trailer/etc.) ?
I was told that if you purchase a boat and it has a motor attached, that IS considered part of the boat sale and taxed as such. However, if the motor is detached, you only pay for the hull... but you better have your ducks in a row.
I put this up on the other thread... "A pretty slick way to reduce the cost (at least if you buy it privately here in Illinois) is to buy the hull separately from the motor-s and accessories to save on taxes. The state only taxes the boat, if the motor is attached you pay tax on it too. If you go that route be sure to document everything properly (certified check and receipt for the hull)."
My last boat was purchased privately from a guy in Michigan, and I brought it back here to Illinois, I was VERY careful to document the purchase the boat and motor with separate bill of sale for each, and retained a copy of the certified check for the boat and submitted that with the application for the title so there was no doubt.
I strongly recommend not even thinking about cheating on taxes, (Illinois makes you swear to the purchase price on the application BTW) but on the other hand there's also no reason to pay more tax than is required.
Edited by Jerry Newman 5/14/2012 11:07 AM
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Posts: 1405
Location: Detroit River | tcbetka - 5/13/2012 3:34 PM
I just paid 6% on a boat I bought in MI. I thought you paid sales tax in the state you lived and registered it...but the dealer told me they were just tagged by Mi, because they had been doing that. Apparently, MI decided that it was losing too much money on interstate sales, so I had no choice but to pay 0.5% more tax than charged by WI (including my county tax).
TB
That dealer should have charged you the lesser tax rate. In your case WI was the lesser amount & that's what should have been charged. This is nothing new that Michigan just decided to do. Most states have reciprocity agreements with neighboring states & MI & WI have that agreement with each other.
There are Michigan residents that buy those big RV's that cost over a 1/2 million from out-of-state dealers then register them in Montana (they have no sales tax) under a fictitious S-Corp. There are tax attorneys in Montana that advertise that they will do this for you to save paying sales tax & they charge $900 & up. This is illegal in most states that have a sales tax. As a tax auditor in Michigan we go after people that do this.
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Location: Green Bay, WI | Actually, I pointed that out to the dealer--that they SHOULD have charged me the WI sales tax rate. But the dealer insisted that MI tax rate should be charged, so I paid an extra $120 or so because of that. It's the first time that's ever happened to me actually, and I've bought boats out of state before.
I think I lost out on this deal, but I don't know what more I can do. Let's just say that the whole "buying experience" was significantly below par...
TB |
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| catchandrelease - 5/13/2012 8:29 AM
If you purchase from a private seller you can lie about what you really paid. I wouldn't recommend it, but it's common. If you buy from the dealer you're paying full tax.
Exactly. Why WOULD you put down the actual selling/purchase price from a private seller? Uncle Sam gets enough already. |
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Posts: 208
Location: Sun Prairie, WI | If you so choose to lie about the sale price just make sure that you and the seller are in agreement on the price. I lied once on a truck purchase and got caught when I couldn't remember what I put on the title. I was off by $1000 so had to pay takes on that and a penalty. |
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Boat Sales Tax