First cruise sound too ambitious?

[cardude01]

I am looking at a boat in SC, and if it works out the plan was to fly up with the family in June , cruise the ICW down ending up in Key West and pick up a mooring for a week or so. Then the plan was to store the boat in a good hurricane hole in FL during hurricane season and then bring the boat back to Texas later. Then I read about differing state tax rates and got all greedy and flummoxed.

Couple of questions:

1. First of all I'm wondering if this SC to the Keys sounds too ambitious for a first trip with a "new to us" boat in unknown waters. We have some ICW cruising experience but it was in the South Texas part of the ICW which was pretty easy and uncrowded-- we went from Port Oconnor to South Padre Island. Also, this boat we are looking at is larger than anything we have cruised on the ICW-- it's a 44 Endeavour powercat with almost a 19' beam drawing 3'. The boat we took down the ICW in Texas was a 26' express cruiser, but we have chartered boats in the Bahamas up to 37'. I think I can handle it, but don't want to kill the family on the maiden voyage.

2. Tax issues. We plan to close on this boat Jan 31. SC max sales tax is $300 and I was going to register and leave the home port as SC to avoid Tx 6.25% sales tax. However, if I bring the boat to the Keys before 6 months is spent in SC (Feb-May is only 4 months) the way I read the rules I think I might jeopardize the tax savings.

Should we change our plans to just cruise SC waters for the initial trip, making sure the boat stays in SC for six months after purchase and satisfying the 6 month rule? Or, should I do the trip to the Keys then store it back in SC in a sneaky attempt to get around the 6 month rule (acting like we never left)? Or, do I just go to the Keys as planned hoping I don't get "caught"? How strict are the taxing authorities on this 6 month rule I guess I'm asking?

 

[pilothouse king]

It's a sad state of affairs when one has to contemplate cruising plans around taxes. Just GO. It's some government employees job to find you- not the other way around. Just for the record -in FLORIDA- the State re-assigned off ALL their enforcement personnel to desk duty auditing paperwork.. There's nobody checking anywhere for anything. It makes NO sense because Florida has no State Income tax and derives all it's income from sales tax, but it's a fact. There's one ******* who sit's in his office in Tallahassee, and only goes over paperwork submitted to him with a fine tooth comb looking for for mistakes, but NO ONE out actually looking for real scofflaws. They're not even allowed to have Internet access to look on Craigs List or Ebay for unlicensed dealers. Go for it.

 

[kulas44]

The tax is a non issue. I have never been checked. But, South Carolina deserves some time, the cruising there is awesome. You could easily put on 50 pounds if you stay around Charleston for a few months, the food is that good. The Red Bank Club at Goose Creek comes to mind. Food to die for. And cheap. Be careful at Edisto cut, try to run it on a slack tide. All in all the low country is a sight that you dont want rush. Spend some time there while its convenient for you. You will remember it the rest of your life.

 

[Arch]

My first cruise on KaJen was the Great Loop starting in Melborne FL. I figured that since Florida wasn't my home, I really didn't care much where I was if the boat broke down. The ICW is a piece of cake.

Florida has strange tax laws. It is my understanding that you are more likely to encounter issues in the Keys than further north.

Insurance may be another consideration. Florida can be pricey in Huracane season.

Have fun,

Arch

 

[Moonstruck]

The way I understand it, you will have 90 days to register your boat in Florida. However, if you keep it in SC for 6 months or more, you could register in FL with no use taxes. Insurance during hurricane season is pricey, but with an out of water layup off the Okeechobee Waterway, it should help on the price.

6 mos. time of intermittent cruising will go fast in SC. Don't worry about the ICW. There's nothing you can't handle. Lot's to see and do. Enjoy.

 

[Bay Pelican]

Then the plan was to store the boat in a good hurricane hole in FL during hurricane season and then bring the boat back to Texas later. Then I read about differing state tax rates and got all greedy and flummoxed.

If your comment about bringing the boat back to Texas means you are a Texas resident then you will likely owe use tax on the boat when it is brought to Texas. Texas will give you credit for any sales or use tax you paid to South Carolina or any other state. I believe the Texas tax rate is 6.25%.

 

[cardude01]

Yes I am a Texas resident and the boat will eventually make it back to Texas.

I remember a statement made by Yachtbroker in another tax thread, and I think I have read it elsewhere, that if you leave leave your boat where you bought it and registered it (SC) for 6 months then one is free to go to whatever state he wishes without owing tax difference. The boat is CG documented if that matters.

But I could be wrong...

 

[THD]

Cardude-if I understand correctly, you are to buy the boat in SC, travel to FL, leave the boat there for a while and then move it to Texas as its home.

First of all, like the others, go ahead and do the ICW, get a good guide, have Active Captain available and you can make it just fine. It ain't that hard!

Second, on the tax issue-remembering I cannot give legal advice in Fl or Tx (always got to say that!), it will end up not making much of a difference to you.

If you stay in Florida for 90 days or more, you will need to register the boat there and pay sales/use tax there. There may be an exception if the boat is active for less than 90 days and then stored on the hard until you move it to Tx. That you would have to check on. That said, if you had to register and pay in Fl, you pay a sales/use tax of 6% on a value of up to $300,000, or $18,000 of tax.

When you move the boat to Texas, you will have to register it there and pay sales/sue tax there. The tax rate in Texas is 6.25%. However, Texas will give you a credit for the sales tax paid in Florida. So, you will pay the 0.25% difference in Texas. If you paid $300K or less for the boat, that should be all you would pay. If you paid more than $300K for the boat, you will pay the full 6.25% in Texas on the amount over $300K.

In short, you are going to end up paying 6.25% of the boat's value as sales/use tax when you move the boat to Texas.

 

[RT Firefly]

Greetings,
Mr. dude.

Captain Ron's philosophy on sailing - YouTube

Tax issues aside, Mr. Arch has the right attitude. You might break down (perish the thought) anywhere. It's all part of the adventure. No matter where you're cruising, local or long distance you'll be with family and that's what it's all about isn't it? I would say your plan should be no plan. You'll get to Texas eventually.

 

[magicbus]

Be forewarned that finding a hurricane hole in the Keys may be problematic.

Dave

 

[SCOTTEDAVIS]

Fl. only collects sales tax if you buy the boat in Florida for use in Fl. or purchase elsewhere with the intention on bring back to Florida as a resident or keeping it here full time (non-transient). You have so many days to leave the state without paying taxes if you are not a Fl resident.

If you are a Texas res. and buy the boat in SC then Fl is not in the loop. If you boat in Fl for over 90 days then you need to pay for a Fl registration (less then $300). Florida does not make visitors form other states pay sales taxes on a boat owned by them just for visiting.

The question is how to handle the TX state tax as that's where you have residence. I can't answer that but Google can.


As to the cruising, heck ask yourself whats the worse that can happen than ask yourself if you can handle that if yes, then whats the worry.

Get out there.

 

[Moonstruck]

Florida law is very generous in respects to no use tax if you are a nonresident, and the boat has been in use 6 mos. or more in another jurisdiction. Most other states are not that lenient.

 

[cardude01]

Thanks for all the replies and advice so far.

As usual, Im letting myself get too obsessed with money side of things trying to save a buck or $10000. If there is some no-brainer way to save on the tax I'll do it, but if not I'll just bite the bullet and pay the tax. I got started on this tax scheme after talking to a attorney who is an "expert" on these tax issues, and he claimed that for the small, one time fee of $3000 he guaranteed I would not have to pay TX sales tax if I just did what he said. I declined the $3000 offer, but it got my wheels turning.

Anyway, the good news is it looks like the maiden voyage is doable with my present skill set, so that's exciting.

 

[kulas44]

Absolutly one hunnerd percent positive you can do the ICW from there. Its a great trip. Be VERY carefull before you get to Saint Augestine, before the Bridge of Lions, the ICW makes a dog leg and there is a not so nice "oyster bar" right there. Dont ask me how I know. But, Saint Augastine deserves a lot of time. We were there when they put the lions back on the bridge. An incredible place, spend some time there.

 

[jwnall]

It's a sad state of affairs when one has to contemplate cruising plans around taxes. Just GO. It's some government employees job to find you- not the other way around. Just for the record -in FLORIDA- the State re-assigned off ALL their enforcement personnel to desk duty auditing paperwork.. There's nobody checking anywhere for anything. It makes NO sense because Florida has no State Income tax and derives all it's income from sales tax, but it's a fact. There's one ******* who sit's in his office in Tallahassee, and only goes over paperwork submitted to him with a fine tooth comb looking for for mistakes, but NO ONE out actually looking for real scofflaws. They're not even allowed to have Internet access to look on Craigs List or Ebay for unlicensed dealers. Go for it.

Being in Tallahassee, and pretty much outraged at what you say, I called the different State offices here to gripe about such a sad situation. No one seems to know what in the heck you are talking about. So please share with me (and with the other members of the Forum) the data that backs up your statements. Then I will be fully armed with facts and figures when I call them again. (You DO have this data, don't you?)

 

[kulas44]

Document the boat or transfer the document and dont worry about the tax. Get reciets for fuel in EVERY state and you are good. Or if you just like payin taxes, get your local assesor to come out. Or, just go to La. once a year and buy fuel.

 

[THD]

Cardude-you are smart enough not to bite on the $3,000 deal (and this is coming from an attorney!), you are plenty smart enough to do the ICW! Reconcile yourself to paying the Texas Use tax when you finally get there. in the meantime, enjoy the cruise with the family!

 

[N4061]

Talking from the perspective of just purchasing a mint condition "used" boat with only 630 hours I would not even think about that trip. Even with a survey and inspection and addressing all the items there remains the unknown. You don't want to put your family in that type of unknown situation. Our first few trips have been limited to the bay and a few nights aboard as we get use the boat and tackle the "to do" list. We are still dealing with a stuffing box that is running a little warm. Until we checkout the anchor and dingy and get the stuffing box cool we are NOT leaving the bay. When we do it will be gradually further and further trips. Don't be in a rush, that's how accidents occur. Believe me I have owned more boats (over 12) of different types before entering the trawler world.

John T.
Nordhavn 4050 - Former owner
Nordhavn 4061 - Former owner
Nordhavn 3522 - Current owner

 

[cardude01]

Document the boat or transfer the document and dont worry about the tax. Get reciets for fuel in EVERY state and you are good. Or if you just like payin taxes, get your local assesor to come out. Or, just go to La. once a year and buy fuel.

I like this...

 

[tpbrady]

Our first cruise on a 30 year old trawler was from La Conner to Southeast Alaska where we spent 2 1/2 months exploring. I would say have at it. We were ambitious and spent a fair amount of time planning and working on boat systems. The only casualty last summer was an anchor light. I'm glad we didn't have to think about taxes. That would have been stressful.

Tom

 

[cardude01]

Thanks again to everyone. I really like the wide range of advice-- from the "don't do it you'll be killed" to the "what me worry? just get in the boat and do it".

I probably need more of the "you'll be killed" type of advice since I still think I'm mostly bulletproof and there is soooo much I don't know, so thanks for that. Seriously.

I even had a long time lurker register and message me when he saw my post was describing almost EXACTLY what he just did with his family not long ago. How cool is that?

Small world, this forum...

...I seriously need a new avatar

 

[Jeffrey S]

I've got to say N4061 makes some really good points that should be thought about.

First, I don't know the condition of the boat, engines, ground tackle, pumps, fuel tanks, or any of the hundred things that you need to get hands on experience with. If all of these things are pretty new and checked out, I fully agree - just go.

But if you don't have 100% confidence in all systems or you're not very mechanically inclined, then it would make a lot more sense to hang out in the Charleston-Beaufort-Hilton Head area first and really get to push everything and learn the systems slowly. Instead of long, hard days, take a bunch of 20 mile ones. Practice anchoring. Practice dock handling. There's a great yard just south of Charleston on the ICW (Ross Marine). Hang out around there and perhaps even buy a few mechanic hours to look around and get them to give you a once-over checkout.

Savannah would make a wonderful first destination and there are incredibly great yards in the area if you need anything (Thunderbolt & Hinckley).

The moment you rush into Florida, things get more expensive, more crowded, and more difficult. But if you go really slow with the goal of learning and hitting all systems, by the time you get through Georgia, you'll be in a much better position to decide where you want to go for the next destination.

 

[cardude01]

i've got to say n4061 makes some really good points that should be thought about. First, i don't know the condition of the boat, engines, ground tackle, pumps, fuel tanks, or any of the hundred things that you need to get hands on experience with. If all of these things are pretty new and checked out, i fully agree - just go. But if you don't have 100% confidence in all systems or you're not very mechanically inclined, then it would make a lot more sense to hang out in the charleston-beaufort-hilton head area first and really get to push everything and learn the systems slowly. Instead of long, hard days, take a bunch of 20 mile ones. Practice anchoring. Practice dock handling. There's a great yard just south of charleston on the icw (ross marine). Hang out around there and perhaps even buy a few mechanic hours to look around and get them to give you a once-over checkout. Savannah would make a wonderful first destination and there are incredibly great yards in the area if you need anything (thunderbolt & hinckley). The moment you rush into florida, things get more expensive, more crowded, and more difficult. But if you go really slow with the goal of learning and hitting all systems, by the time you get through georgia, you'll be in a much better position to decide where you want to go for the next destination.

This was my worry. Complex boat (for me), starting off in unfamiliar waters with big tides and currents (which we don't have in Texas).

I *think* the boat is in great condition--it seems to be well maintained and the owner has kept logs and kept her updated-- but you know how that goes.

I like the short 20 mile day idea until we get the hang of the boat.

 

[Tom.B]

I've got to say N4061 makes some really good points that should be thought about. First, I don't know the condition of the boat, engines, ground tackle, pumps, fuel tanks, or any of the hundred things that you need to get hands on experience with. If all of these things are pretty new and checked out, I fully agree - just go. But if you don't have 100% confidence in all systems or you're not very mechanically inclined, then it would make a lot more sense to hang out in the Charleston-Beaufort-Hilton Head area first and really get to push everything and learn the systems slowly. Instead of long, hard days, take a bunch of 20 mile ones. Practice anchoring. Practice dock handling. There's a great yard just south of Charleston on the ICW (Ross Marine). Hang out around there and perhaps even buy a few mechanic hours to look around and get them to give you a once-over checkout. Savannah would make a wonderful first destination and there are incredibly great yards in the area if you need anything (Thunderbolt & Hinckley). The moment you rush into Florida, things get more expensive, more crowded, and more difficult. But if you go really slow with the goal of learning and hitting all systems, by the time you get through Georgia, you'll be in a much better position to decide where you want to go for the next destination.

I can't comment about the Florida part- not boated there yet, but this is good advice. Just go easy if you have doubts.

 

[FF]

A brand new , usually unsurveyed boat can be the biggest risk to operate.

A modestly experienced operator with a proven used boat that has had a survey ,there is minimal if any risk, just go as you please.

Most of the AICW one is a few feet from shore in shallow protected waters , so short of a huge fire on board m docking will be the biggest risk to the vessel and crew.

Should the most common hassle from under use occur , a plugged fuel filter , it will take as long to change 500 miles from home as 5 miles.

Tax EVASION is a crime ( or a rewarding hobby)!

Tax AVOIDANCE is legal (Judge Learned Hand) and one of the reasons for the founding of the country, be a Patriot !!

 

[psneeld]

Running the intracoastal where the skipper is reasonably experienced and NOT schedule bound or a type A personality is doable...just think of each day as a long sea trial.

As long as you don't push any situation or exceed you personal skills limit...what's the diff?

My boat was purchased after a 15 minute ride, not present for the survey, flew back to her, paid and left Ft Lauderdale for Charleston the next morning.

Were there problems with the boat? Sure, lot's of little issues that needed an eye kept on them. Any life threatening? No because I never put the boat or crew in a situation that would have made it so.

If you have decent lifesaving gear and a radio/EPIRB and travel inland waters on nice days....what's the worst that could happen? Then plan for that and either eliminate or mitigate the hazards.

Delivery/commercial captains make a living moving boats they are relatively unfamiliar with...if you have skill sets approaching that level...then think long and hard about it before you say yes or no to making the trip.

It's just a boat and even new ones after shakedown cruises have major issues...I tow them all the time with the owners screaming on the phone to their sales people and manufacturers...actually pretty comical how bad new boats can be.

The trick is to be reasonable in your approach and breaking down some unplanned place is inconvenient/more expensive but neither life threatening or the end of the world.

 

[rwidman]

Yes I am a Texas resident and the boat will eventually make it back to Texas.

I remember a statement made by Yachtbroker in another tax thread, and I think I have read it elsewhere, that if you leave leave your boat where you bought it and registered it (SC) for 6 months then one is free to go to whatever state he wishes without owing tax difference. The boat is CG documented if that matters.

But I could be wrong...

You are wrong. Bay Pelican is correct. If you're going to keep the boat in Texas, you will have to pay taxes on it to Texas minus whatever you have already paid to SC or any other state. If you keep the boat in SC for more than 180 days, you may be charged personal property tax on it as well.

Buying a boat in SC is not a legitimate tax dodge. Neither is documenting the boat.

If you want good tax advice, don't ask boaters, ask a CPA or tax attorney.

 

[psneeld]

my CPA thought I had to pay NJ income tax on my military pension...was he upset when he had to go back and redo some of his other clients returns...for many years..

make sure you get advice from someone who has knowledge of the subject ....no matter what title they hold.

 

[waterfront]

For peace of mind and heart get a towing policy! Boat U S or Seatow , your choice. Any tow you need will more than pay the premium

 

[psneeld]

For peace of mind and heart get a towing policy! Boat U S or Seatow , your choice. Any tow you need will more than pay the premium

Absolutely...they can also provide info that can be invaluable.

If you are having questions about the trip or your new boat...plan stops at places that have assistance towing captains stationed, while many can be inexperienced or BSers, you may get some that will be a wealth of local knowledge and have vast amounts of boating experience. Often they have time to kill and will help for free and appreciate a cold beer at the end of a duty cycle.