So, You Really Want To Take The Boat Up To Maine?

[jay_merrill]

The link below is to a NY Times article concerning taxes levied on boat owners who own boats registered in other states. In short, if you bring an out of state boat there for 30 days or more, even if you have no legal address in Maine, the state will apply a use tax against the value of the boat.

While this is a topic that could easily evolve into political discussion, please don't go there - from either end of the political spectrum. I'm offering this information, because it could affect boaters who participate in the iboats forums, as well their friends.

I think my immediate question would be, if I trailered my boat up from Louisiana to take an extended vacation in Maine, stayed with a friend or in a hotel for 6 weeks and later received a tax bill after going home to New Orleans, what legal right would Maine have to enforce such a bill? My inclination would be to tell them to "pound sand." I also would never spend another dime in the state of Maine.


http://www.nytimes.com/aponline/2009/12/22/business/AP-US-Taxing-Luxury-Boats.html



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[SuperNova]

Re: So, You Really Want To Take The Boat Up To Maine?

I can see the state's point. A boat is supposed to be registered and licensed in the state of primary useage. That means if you live in Md., bought the boat in Del., but keep it in Maine, it should be registered (and taxed) in Maine. People do all kinds of sneaky things to avoid taxes and Maine is just trying to out-maneuver them. In both of the cases cited in the article, the boats sat in Maine marinas for extended periods. I'm having trouble sympathizing with the owners.

 

[F_R]

Re: So, You Really Want To Take The Boat Up To Maine?

The link below is to a NY Times article concerning taxes levied on boat owners who own boats registered in other states. In short, if you bring an out of state boat there for 30 days or more, even if you have no legal address in Maine, the state will apply a use tax against the value of the boat.

While this is a topic that could easily evolve into political discussion, please don't go there - from either end of the political spectrum. I'm offering this information, because it could affect boaters who participate in the iboats forums, as well their friends.

I think my immediate question would be, if I trailered my boat up from Louisiana to take an extended vacation in Maine, stayed with a friend or in a hotel for 6 weeks and later received a tax bill after going home to New Orleans, what legal right would Maine have to enforce such a bill? My inclination would be to tell them to "pound sand." I also would never spend another dime in the state of Maine. ???

Jay, you sound like me. A cop gave me a speeding ticket for going 60 on Interstate 10 in Phoenix, Arizona (back when the limit was 55). I pointed the car eastward and never stopped till I got to the New Mexico border. Didn't buy any gas, lunch, or anything. Haven't been back to AZ since. Oops, I take that back, I did stop to find out the Governor of Arizona's name. Let's just say my letter to him explained why.

 

[JoLin]

Re: So, You Really Want To Take The Boat Up To Maine?

The link below is to a NY Times article concerning taxes levied on boat owners who own boats registered in other states. In short, if you bring an out of state boat there for 30 days or more, even if you have no legal address in Maine, the state will apply a use tax against the value of the boat.

http://www.nytimes.com/aponline/2009/12/22/business/AP-US-Taxing-Luxury-Boats.html

???

Hi, Jay- read the article more closely. In order to be assessed the usage tax in Maine, you have to meet ALL THREE of the following conditions:

1. You bought your boat in a state that DOESN'T TAX BOATS
2. You brought it to Maine within the FIRST YEAR of ownership
3. You kept it in Maine for more than 30 days.

You wouldn't have ANY issue unless you've owned your boat for less than a year.

Now, in the case of Mr. Toye, I think he has a legitimate beef. Pretty hard to move a brand-new yacht that needs that many repairs, back to the point of purchase. At the least, the yard doing the work should have warned him, and there should be some process for him to gain a waiver in an extraordinary event like that. Of course, I don't know if we got the whole story from The Times, either.

 

[dingbat]

Re: So, You Really Want To Take The Boat Up To Maine?

I don't think the whole story is being told here.

It sound like this guy bought the boat in Flordia then took it directly to Maine. Did he pay sales tax in Florida or did he jump ship and hope that Maine wouldn't catch up on him?

Way to many contradictions between the regulations stated in the newspaper article when compared to the regulation post on the Maine website.

Maine Boating Laws
Practice Safe Boating on Maine Waters
REGISTRATION INFORMATION
All motorboats of any size, including airmobiles and personal watercraft, must be registered in Maine to be used on the waters of this State, except the following:

Watercraft required to have a valid marine document as a watercraft of the United States. Vessels over 5 net ton used for commercial fishing must be documented. Call the U. S. Coast Guard in Boston, Massachusetts at (617) 223-3030 for further information on documentation of a boat;
Watercraft with valid registration from another state, provided the watercraft registration number is displayed on the motorboat and the motorboat will not be in Maine over 60 consecutive days after the state of principal use has been changed; Military or public watercraft, except recreational type Watercraft of the United States;
A motorboat owned by the United States, a state, or subdivision thereof, which is used for governmental purposes and clearly identifiable as such;
A ship's lifeboat;
Motorboats from another country which are not within Maine over 60 consecutive days; and
Motorboats used exclusively for racing purposes and displaying a valid boat number issued by a recognized racing association.
REGISTRATION EXPIRATION


Watercraft registrations are issued for a specific calendar year and are valid through December 31st of the year issued.
Boat excise tax must be paid by a resident to the tax collector of their town before registration. A nonresident, prior to registering a motorboat which is located in Maine more than 75 days during a calendar year, must pay an excise tax to the Maine town where the boat is principally moored, docked or located. If the boat is exempt from tax, a tax exemption form must be completed by the owner and submitted with registration application and registration fee.
Proof of payment of sales tax is required for new registrations (resident and nonresident). Registrations may be obtained from licensing agents or by mail. For applications and agent information please call 207-287-2043.
REGISTRATION FEES


0-10 horsepower boat $10.00
11-50 horsepower boat $15.00
51-115 horsepower boat $21.00
Over 115 horsepower boat $29.00
Personal Watercraft $29.00
Duplicate Boat Registration $ 1.00
Duplicate Boat Registration & Sticker $ 2.00
Boat Temporaty Transfer $ 4.00
ANNUAL EXCISE TAX


Before a watercraft can be registered, the owner must show proof that the annual excise tax has been paid on the watercraft. Maine residents pay the tax to the town in which they reside. Nonresidents or corporations pay the tax in the Maine town where the boat is principally moored, docked or located.

All watercraft, including documented vessels, located in Maine are subject to an annual excise tax except the following:

A lifeboat or raft carried by another vessel.
A demonstrator of stock in trade (dealer's stock).
A commercial vessel with no established base of operation in Maine.
A watercraft not in Maine more than 75 days during the year. This refers to the number of days physically present in the State, not the number of days in use in Maine (Non-commercial vessels only).
A watercraft 20 feet or less in length and does not use any type of motor power.
A watercraft exempt from property tax.
Any watercraft not subject to registration but required to pay the excise tax must display an excise tax sticker on the watercraft to show that the excise tax has been paid.

SALES TAX
The first time any owner of a watercraft registers the watercraft, the owner must (1) show proof that a 6% sales tax or use tax has been paid, or (2) pay the sales/use tax due to the Registration Agent at the time the registration is issued. Sales/use tax paid to another jurisdiction will be credited toward the Maine sales/use tax due. A watercraft purchased, registered and used by the present owner outside of Maine for at least a year is not subject to sales/use tax as long as the owner was a resident of the other state at the time of purchase.
TRANSFER OF OWNERSHIP

Upon the sale of a registered watercraft the person who is named on the registration as owner must remove and destroy the validation stickers on the watercraft and notify the Fish & Wildlife Department of the transfer of ownership within 10 days of the transaction. The validation sticker is not transferable to the new owner. The new owner must register the watercraft for the regular registration fee.

When a watercraft owner transfers ownership of a watercraft covered by a current registration and purchases a new watercraft, a transfer registration can be obtained for the new boat for a $2.00 fee. This registration will be valid for the remainder of the original registration period. The old registration must be turned in at the time of application for the $2.00 transfer registration.

 

[jay_merrill]

Re: So, You Really Want To Take The Boat Up To Maine?

Hi, Jay- read the article more closely. In order to be assessed the usage tax in Maine, you have to meet ALL THREE of the following conditions:

1. You bought your boat in a state that DOESN'T TAX BOATS
2. You brought it to Maine within the FIRST YEAR of ownership
3. You kept it in Maine for more than 30 days.

You wouldn't have ANY issue unless you've owned your boat for less than a year.

OK, let's do a hypothetical that has all of these things being true. I buy a new boat, Louisiana doesn't charge sales tax (really, they do) and I go on vacation in Maine for six weeks. I trailer the boat up there, rent myself a nice little cabin with a dock and spend 45 days boating and having a good time.

At summer rental rates, I will have probably paid someone about $3,000 for the cabin, I will have eaten in plenty of restaurants, bought lots of gas, groceries, bought lots of preppy looking L.L. Bean clothing, etc., etc. In other words, I will have provided a nice chunk of revenue to Maine businesses and will have paid a bunch of sales tax.

When I get home with my new $50,000 boat that I bought because I won a lottery, I find a tax notice from the state of Maine, for some percentage of the value of the boat. I have never lived in Maine, never registered my boat there, pay no income taxes there, have no driver's license from there ..... the point being, that I am not and never have been, a resident of the state of Maine. I'm just a guy who went on vacation there.

I understand that what they are trying to prevent people who really are residents of the state from avoiding sales and/or excise tax, but they way they are going about it is stupid. I would also say that it is legally unenforceable, but it looks like they are claiming that it is.

My guess is that this one is going to go beyond the Maine courts, simply because they are going after people with enough money to do that. In the mean time, if I am living in my hypothetical situation, I'm not payin' them squat.

PS: Just did a little surfing while I'm sitting here eating a ham sandwich and some totally awesome, refrigerated, fresh Claussen Kosher Dill Pickles (they are THE bomb, I tell you!).

In 2006, the economic impact of tourism for the State of Maine was 10 BILLION dollars in sales of goods and services. It supported 140,000 jobs and 3 billion dollars in earnings for those employees. Considering that the population of Maine is only about 1.3 million people, this means that over 10% of the states residents owe at least a portion of their jobs to the tourism industry. Seems to me that this thing is a bit counter-productive!

BTW, did I hijack my own thread with the pickle thing? I don't know, but I will have another!



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[lowkee]

Re: So, You Really Want To Take The Boat Up To Maine?

I grew up in Maine and dealt with the excise tax stuff all my life, and i can say, it really isn't any different than any other state I've lived in. The only part which makes it stand out is being next to NH, where a lot of Mainers buy their stuff since there is no sales tax.

The only time out of staters are required to pay tax is if you move there, and sales tax is only charged if you haven't owned the vehicle for a year in another state. This is mainly to penalize those who go to NH and buy a car/boat/motorcycle, then come back to Maine to register it, thinking they can avoid the sales tax by going out of state to buy it. I won't share what I think of such a law, but that is how it currently works. Technically, you are required to pay your state's sales tax for EVERYTHING you buy, even from a non-sales tax state, but we all know nobody does.

So, Jay, if you live in LA and you stay in Maine for 4-5 months, but still live in LA (where your boat principally lives), you are not required to pay anything. The excise tax only applies to people trying to register their boat IN MAINE (say, if they leave their boat at their Maine camp year round). If the NYT article (I didn't read it) says otherwise, I think they are mistaken.

 

[SuperNova]

Re: So, You Really Want To Take The Boat Up To Maine?

Hi, Jay- read the article more closely. In order to be assessed the usage tax in Maine, you have to meet ALL THREE of the following conditions:

1. You bought your boat in a state that DOESN'T TAX BOATS
2. You brought it to Maine within the FIRST YEAR of ownership
3. You kept it in Maine for more than 30 days.

You wouldn't have ANY issue unless you've owned your boat for less than a year.

Now, in the case of Mr. Toye, I think he has a legitimate beef. Pretty hard to move a brand-new yacht that needs that many repairs, back to the point of purchase. At the least, the yard doing the work should have warned him, and there should be some process for him to gain a waiver in an extraordinary event like that. Of course, I don't know if we got the whole story from The Times, either.

The article also states that Mr Toye's boat was kept in a Marina for a significant period of time......even when it wasn't being worked on by the non-affiliated shipyard and Mr Toye used the boat to make a couple of trips up the coast.
From the Article:

"Toye, with homes in Cape Elizabeth, Maine, and Miami Beach, Fla., purchased his boat in Dec. 2004, renamed it October Princess and brought it to Maine in May 2005. He kept the vessel at a marina in South Portland and it underwent renovations at a Portland shipyard"
and
"The boat was in Maine for nearly five months before Toye took it south that October. "

 

[jay_merrill]

Re: So, You Really Want To Take The Boat Up To Maine?

I have ties to Maine too - my mother and her mother (my grandmother) were both born there. My great-grandparents were from a little town quite a ways up the eastern side of the state. We used to go there a lot with our family, when I was a kid.

As I said in my last post, I get the part about Maine residents trying to skip out on taxes by purchasing stuff elsewhere. That makes sense and its not at all unique - lots of states do that.

What would annoy me if I were close enough to realistically consider spending time with a boat there, is the attempt to collect money from people who are clearly not residents of the state. According to the info that Dingbat posted, Maine wants the boat registered there if it is in the state for 60 days. Further, The NYT article says that Maine is chasing people who have a boat in the state for as little as 30 days.



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[H20Rat]

Re: So, You Really Want To Take The Boat Up To Maine?

Jay, you sound like me. A cop gave me a speeding ticket for going 60 on Interstate 10 in Phoenix, Arizona (back when the limit was 55).

You might have a very hard time getting any sympathy. So were you breaking the law? Yes. Speed limit was 55, you were driving 60. At least in my area, tickets for 5 over are not uncommon at all.

I'm not really sure how all your protesting changes the fact that you were willingly breaking the law and expect to not take responsibility. Man up, take the ticket, and avoid speed traps next time! (disclaimer, I have a fairly high powered sports car, capable of doing well over 140 mph. I have been known to drive 60 in a 55 mph zone, but no faster! I also have zero tickets on my record.

The boating argument. The no wake sign means NO WAKE. It doesn't mean back down to 10 mph and only throw up half the wake compared to 15 mph. It means no wake! Much like a speed limit sign that clearly says 55.

 

[tawood]

Re: So, You Really Want To Take The Boat Up To Maine?

I've been down this road here in Michigan too....I bought a plane in Ohio, I had an Ohio address, but I kept the plane here in Michigan, and I got a nice bill from the State of Michigan for "use tax". I tried to fight it, but lost, and paid the bill. Michigan found out about the plane through my insurance company, as they are required to report where the owner receives his mail...oh well.
And I say "good luck" to those who think they can just not pay the bill and then simply avoid the state that levied the bill.

 

[lowkee]

Re: So, You Really Want To Take The Boat Up To Maine?

Reading the registration site, it looks like I'm wrong on the taxing of boats. This line seems the important one:

A watercraft not in Maine more than 75 days during the year. This refers to the number of days physically present in the State, not the number of days in use in Maine (Non-commercial vessels only).

How I read the above is:
You have 75 days before you must pay anything, but after 75 days, you must pay an excise tax ($19-29/yr for most boats). Note, that does not mean you need a dual registration. It means you legally cannot re-register in your home state until that excise tax is paid. Will Maine ever know your boat has been there more than 75 days.. not likely. Will your home state ever check for a tax lien if they do? Maybe.

The only means I can think of for Maine to track boats being in-state for a time period is to manually note registration #'s for every boat on the water. Even then, the state would likely need to prove they saw the boat 75 times over 75 days in order to exact the excise tax, as you could simply say "Okay, you saw my boat a few times, the rest of the time it was outside the state. Prove me wrong."

Either way, we're talking $29 for using the waters of a state for 75+ days.. not exactly highway robbery. Maine mostly handles their own water management, so I can understand them wanting out-of-staters to help cover some of the annual upkeep tab. Why should residents be required to foot the entire bill?

Maybe I'm missing something important, but all I see is a (max) $29 tax for any boat in Maine over 75 days. As for Maine hunting down people for 30 days.. I see nothing about 30 days anywhere in the boating tax law. I'd be curious as to what they are chasing them down for.

 

[jay_merrill]

Re: So, You Really Want To Take The Boat Up To Maine?

I agree that paying 29 bucks is no big deal and I certainly wouldn't get too jazzed up about it. The problem is that it appears that there is much more going on. One of these guys received a bill for sity thousand dollars and the received a bill for eleven thousand dollars. To be sure, we're not talking about trailer boast in these cases, but it sure would be intersting to know what the real parameters are.



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[JoLin]

Re: So, You Really Want To Take The Boat Up To Maine?

But, would they tax me if I brought in a ham sandwich and a pickle?

(that really sounds good- no ham in the house, tho. Dang!)

 

[piper_chuck]

Re: So, You Really Want To Take The Boat Up To Maine?

Some of the people commenting really need to READ the regulations more carefully. Many of the imagined scenarios clearly do not apply.