question about sales tax on a boat

slidin_out · Soul Rider Joined: 05 Mar 2010 Posts: 353 City: Pearl

If you buy a used boat from an individual is there any sales tax on it and if so who pays it, buyer or seller?

DRAGON88 · Posted: Apr 13, 2010 7:35 pm Post subject:

Depends on the state, but the buyer would be responsible for paying the tax.

slidin_out · Soul Rider Joined: 05 Mar 2010 Posts: 353 City: Pearl

Antoddio · Newbie Joined: 24 Jun 2006 Posts: 22 City: Milwaukee

Just google search you should be able to find out about registering from the state website.

I would imagine the government would like to tax the sale again even though it was taxed from the original sale. They can double, triple, and possibly even more tax depending on how many times the boat changes hands. But don't worry, I'm sure the majority of that tax is being spent wisely on overhead costs. Ha.

faceplant920 · Outlaw Joined: 07 Apr 2010 Posts: 178 City: Brookhaven

Yes, I'm an accountant in MS and you have to pay them. I beleive you pay them when you apply for your title. It is less than our usual 7% though. One thing you can do to cheat the system, unlike vehicles, boats are taxed on what you pay for them, not the book value. So when you buy the boat, see if they will write you a bill of sale for a lot less than the actual amount you pay. Probably only work if its a private seller though and this would only work if you did not have to finance the boat.

faceplant920 · Outlaw Joined: 07 Apr 2010 Posts: 178 City: Brookhaven

Hope that helps...

Weighted Turnip · Newbie Joined: 01 Apr 2010 Posts: 5

In texas, you do have to pay sales tax on the boat, but you also get to write off the sales tax at the end of the year on at least your federal income taxes

STANG KILLA SS · Posted: Apr 14, 2010 1:51 pm Post subject:

yeah youll pay them when you get your new tags and title transfer. i always make up a second bill of sale with the sale price half of what i really paid and have the seller sign that. saves me a ton in taxes. ethical? no.
but i noticed the last time, now they go buy the lowest blue book value now. if you sale price is lower than the bottom end blue book.

Weighted Turnip · Newbie Joined: 01 Apr 2010 Posts: 5

yeah, really sucks. One of those 'the honor system wasn't working' type deals.

faceplant920 · Outlaw Joined: 07 Apr 2010 Posts: 178 City: Brookhaven

In MS they havent started to apply the lowest book value rule to boats yet, so the low ball bill of sale trick still works for boats.