North CA moorage-tax/fees vs. WA State?

[Crusty Chief]

Do you mean OR State income tax?

We pay Federal here in WA, but not State.

Yes, Oregon does have a State Income tax. Hence the reason we are NV residents, no State Income tax. Also, NV is one of a handful of states that does not charge a sales tax on assets purchased from a private party.

 

[twistedtree]

In our particular case, we believed that sales tax was never paid on the boat. We were and still are residents of Nevada. But Oregon was more than happy to allow us to register the vessel in Oregon. This allowed us to park the boat in Oregon as a non resident and not pay the sales tax. What I do know is if sales tax was never paid on an asset, both California and Washington would want to collect the sales tax and property tax if the asset was in there state for a period of time. That’s why we kept meticulous records on our travels and didnt stay in those two states for more than 90 days in a calendar year. We found this to be the same issue when we made it to the East coast prior to selling our boat last year.



Since I don’t know what state you are currently calling your residence this may affect you differently than it did with us. It really is important that you understand the tax liability of each state that you may end up in. Especially if you plan to be there for a long period. This wasn’t an issue while we were traveling out of country. But those countries have there own way of collecting money while in there waters.



Many people who travel either by boat or RV and don’t have an actual residence have the same problem. Along with a slew of other problems, such as Social Security, Medicare and a valid drivers license. That’s why we retained our NV residency.



Sorry to confuse things a bit.

No confusion. An excellent post. These things need to be looked at holistically, and there are quite a few dimensions to it. For example when considering residency, you also need to consider estate taxes which vary from state to state. It’s just another thing to consider. A 12% slip tax is small in the grand scheme of things, and can just be looked at as part of the slip rental rate.

 

[LeoKa]

It is time to summarize what we have learned, so far.

CA
Mooring per foot - quite high south of SF, lower north of SF.
Property tax on boat per year - highest among the 3 States, 1.26%
If resident - registration is monitored and enforced, federal/state/ even county and city taxes apply.
Sales tax - assumed to be very high at any part of the state.

OR
Mooring per foot - lowest among the 3 states.
Property tax on boat per year - none.
If resident - registration can be avoided, federal/state tax apply.
Sales tax - none.

WA
Mooring per foot - quite high, but less then CA.
Property tax on boat per year - yes, 0.5%
If resident - registration is required, federal tax apply.
Sales tax - yes, presently between 9-11%.

If I missed something, or correction needed, please post it.

Other aspects might determine the decision of mooring your boat for long term in any of these states, but we cannot cover everything. I purposely did not address the liveaboard part on this list, because that does not apply to everyone. Same with the L/H tax some marinas charge here in WA.

 

[IRENE]

Oregon Registration

Watercraft propelled by a motor must be titled and registered
ORS 830.705(2)

https://www.oregon.gov/osmb/title-registration/Pages/Title-Registration-Home.aspx

 

[tiltrider1]

In Washington, the state depreciates the value of your boat each year. After about 5 years the annual registration fee becomes reasonable.

 

[mvweebles]

Missing in the equation are some accomodation for living costs. I had Weebles at Treasure Island Marina in San Francisco for 20+ years. About 6-months before leaving for Ensenada, I moved to Emeryville in the East Bay. Treasure Island had near zero amenities - a tiny convenience store, and a coffee shop. There was a Muni bus into SF which was handy. However, Emeryville is a thriving urban center. There was a looper-shuttle to all sorts of stores, restaurants, and bars; with plenty of Happy Hour places. Home Depot and Safeway Grocerty Store was a 5-min drive. With an e-Bike, you could probably live without a car. Even though slip fees were 20% higher, cost of living was quite a bit lower. I also had a slip at Pier 39 in San Francisco (where the Sea Lions are) which was amazingly convenient with the J-Line street trolley a half-block away and could easily get into SF's business district or the train station to connect to San Jose. Would be substantially lower TCO than cheaper slip fees up in the north bay.

Peter

 

[av8r]

LeoKa
Your summary is not quite correct. All three states require registration of the boat in the state if that state is the “area of principle use,” not a function of the owner’s residency. WA and OR loosely define that as to where you moor the boat if on the Columbia —moored on OR side you should be registered in OR, moored on WA side you should be registered in WA, and moored in the Bay area boat should be registered in CA.
Sales /use tax is different in each state. OR has no sales tax requirement for registration. CA used to have no sales tax requirement to register if you had had the boat registered in another state for longer than a certain length of time; if you brought the boat into CA before that length of time you had to pay sales tax to register. WA requires proof of tax paid somewhere to register. If you buy and register in OR and then move boat to WA and re-register you will have to pay full sales tax. If you buy boat and register in CA then move boat to WA and re-register WA will give you credit for the sales tax paid in CA.
Your liability for state income tax depends on your state of residency, not your boat registration.

 

[Crusty Chief]

And if you think it’s confusing on the West coast, the East is even more confusing. A lot more states and each is a bit different. Example, our Oregon registered boat could stay in South Carolina for up to 6 months before you get a letter from the tax man. We actually watched the tax man walk the docks and recording each and every boat. Georgia was only 60 days. Florida I believe was only 120 days. Since we didn’t go any further north than SC i only researched a few and lost interest. A few exceptions much like the West coast to be expected such as emergency repairs (usually requires haul out and stored on the hard during major repairs).
The internet is a necessity in researching the tax structure of each state and I would encourage everyone to research each state requirements. I know of many cruisers that I ran into over the years that had horror stories to tell. It would be nice if somewhere or some entity provided links to each state tax bureau. Maybe some day we could put a list here on TF. And if it was useful, maybe even other countries contact information.

 

[Larry M]

In CA, in most places where you’d moor the boat, you can’t keep the boat indefinitely as a non resident (or resident) without paying taxes. Around January 1 you will probably get a tax bill regardless of where the boat is registered and where you live if the boat is in the water. You can appeal and provide documentation if you were just passing through. Receipts from boat yards, fuel docks or other states that show that you have not been keeping the boat there will work.

If you’re living on the boat in CA, register it. CA is very aggressive about collecting taxes.

 

[DDW]

You do not need to register your boat in CA if it is CG documented. In fact you can't.

 

[mvweebles]

When berthed in SF, I paid property tax on my boat (around $350/yr for what was an older boat even then - Weebles is a 1970 Willard 36); and some sort of property tax on the slip - locally know as a "shadow tax," the land upon which the shadow of Weebles' descends. That was also in the $300 range. Enforcement was via examination of marina records, though I'm sure it's more automated now. California's Board of Equalization (the applicable taxation authority) is quite creative I'm devising methods to feed the beast. Sadly, their methods are quickly adopted by other jurisdictions.

Peter

 

[av8r]

My post # 37 is incorrect if the boat in question is documented, as DDW points out. It applies to undocumented boats in CA.

 

[slowgoesit]

You do not need to register your boat in CA if it is CG documented. In fact you can't.

True, HOWEVER, a google search of CA laws appears to indicate that even if your vessel is federally documented, you are still required in CA to pay USE TAX on a boat berthed in CA to the tune of approximately 1.1% of the accessed value annually.



Did I misunderstand the CA laws?

 

[mvweebles]

True, HOWEVER, a google search of CA laws appears to indicate that even if your vessel is federally documented, you are still required in CA to pay USE TAX on a boat berthed in CA to the tune of approximately 1.1% of the accessed value annually.



Did I misunderstand the CA laws?

Weebles is documented and I did indeed pay Use Tax. As mentioned in my post, this information is pulled from marina records. Unlike Florida, the popular boating centers in California are virtually 100% marina berthing vs private homes or condos. Getting information for tax purposes on boats on California isn't difficult

Peter

 

[LeoKa]

Sadly, their methods are quickly adopted by other jurisdictions.

Peter

Yeppp, sadly for us. Lol

It seems the sunny CA will not have me as a boat mooring resident.
This thread was very useful and educational to me. Thank you all.

 

[Mark Laurnen]

Although WA has no state income tax, they have plenty of ways to get your money. If I am not mistaken, included in my Port of Everett moorage fee is not only a tax for use of the public property (ie. Slip) but also, I believe, a hazardous materials charge. These various charges vary by county. Washington requires all boats to have a state registration, but documented vessels do not need to display Washington letters/numerals on their hull, just the small square registration sticker. Documented vessels are required to register, and then pay the one time “use” tax (WA sales tax or WA sales tax - sales tax already paid elsewhere) plus subsequent annual registration fees (.5% of boat value), when the boat is in the water 60+ days/ year OR when WA becomes the “principle place of use”. I was specifically told by a Dept. Of Revenue agent (after he asked around while I was politely put on hold) that I did not need to register my documented boat until I had it in WA waters 60+ days a year. He said nothing of the “location of principle use” criterion. When I finally switched off the hard, I did my civic duty and went to the San Juan County Assessors office to receive my apportioned kick in the groin. My wallet was lighter, they were happy, and I’m paying annually for registration I had officially been told I had not previously needed.

 

[DDW]

True, HOWEVER, a google search of CA laws appears to indicate that even if your vessel is federally documented, you are still required in CA to pay USE TAX on a boat berthed in CA to the tune of approximately 1.1% of the accessed value annually.



Did I misunderstand the CA laws?

In CA, you pay personal property tax on everything you own. In practice that means everything they can find that you own: real property, boats, cars, and airplanes being mainly the targets. It is limited to 1% by Prop 13, except counties have found end runs around this calling it "fees" instead of taxes, in some counties it is up to 1.5% now. On a car they DMV assesses and collects the tax, on a boat or airplane the county assessor sends you a tax bill. Some counties are more diligent about finding your boat than others. On a federally documented boat there is not registration or reg fee.

 

[MVDarlin]

CA has a posessory interest "in lieu of" tax applied ti the estimated value of your leasehold if it is on public property lije a city marina.. Even if month to month a "reasonable" term will be applied to the lease for computing its value. I believe 7.5 yrs. If you have not paid the tax previously you could also be sublect to an "escaped" assessment and retro billed 3 yrs.
Welcome to CA.

 

[MVDarlin]

Also. If you move to CA you may become liable for state income tax! There is currently no State Income Tax in WA.

 

[Hydraulicjump]

Through three boats we have straddled the Washington/California divide. If you have documented your boat--as we have for all three--in California you do not have to pay an annual registration fee, but you do pay an excise tax of roughly 1.1% of its value. AND you have to pay between 7.5% and 8.0+ percent sales tax when you buy the boat. If you did not pay it elsewhere, they hold you to this tax.



IN Washington, you still have to pay a 10+% sales tax, but the annual excise tax is less than half of California's. You still have to register it even though it is documented. How long are you going to keep the boat? The reduced annual Washington tax pays for itself if you hold onto the boat and it is an expensive boat.



Some personal caveats and insights. The Board of Equalization in California will find you because when you document your boat with the Coast Guard, they send documentation to California. Same for Washington. You cannot hide, if you were thinking about it.



It is then up to the County in California to find you or you to volunteer your excise payment. This is an interesting dilemma. We found that some of our boater friends in private marinas in the Bay Area were never hunted down for the annual excise tax. The marina just looked the other way, leaving it to the county to figure this out with no help. San Francisco caught up with us quickly because we were in a public marina (Pier 49). And San Francisco treated our boat as if it was a house, adding more than 1.1% to its assessed value every year (under Prop 13 restrictions over the maximum annual increase in value for taxation). I eventually convinced them this was dumb after submitting reams of sales information. This was before the pandemic boom. We bit the bullet and moved the boat to Washington and submitted to Washington laws, although we had to produce proof we had already paid a sales tax.



Confusing? By design! My recommendation is the same as many: if you are purchasing a boat, move it to Oregon. If you have already paid sales tax, move it to the location that suits your cruising goals the best. The value of being able to cruise where you want whenever you want far exceeds the monetary cost. This is why our boat is in Seattle, home to the best cruising grounds on the West Coast.


It also happens to be where the grandbabies live.

 

[DDW]

^^ A few things incorrect here.

1) If you are a California resident and purchased a boat outside of California for use outside of California, you can apply for and will be granted an exemption from California sales tax. "for use outside of California" is defined as used for at least 180 days of the first 364 outside of the state, which must be documented. It makes no difference what home port you have told the Coast Guard. The boat need never to have been in its home port. The exemption, once granted, is permanent regardless of where the boat is kept.

2) Prop 13 limits the rise in assessed value to 2% a year - but only on real property, not on personal property - a boat is considered personal property.

3) Seattle is not the best cruising grounds on the West Coast. Of course that is a matter of opinion, but many prefer it far north or far south of there.

 

[Jorgeinseal]

I have a slip in Alamitos Bay in Long Beach, California and pay a "secured" (boat) and "unsecured" (slip) tax to the county of LA yearly.

 

[guy with a boat]

For a California resident to buy a boat outside the state and remain (sales) tax-exempt, the boat must stay outside the state for a full year.

For anyone doing any planning that involves substantial tax liability, pay a qualified tax attorney for advice that applies to your specific situation. Its easy to make a mistake (“But I read it on the internet!!”) and cost yourself a big unexpected tax bill. Easy to avoid with professional guidance.

 

[Gbonas]

It’s not a state tax but a county tax. Valuation is done by each county. I received an increase this year from Orange County. Spoke to assessors office and negotiated a valuation based on comps. The state sales tax is at time of purchase and a one time tax based on sales price.

 

[DDW]

Again incorrect. The boat must be used or stored outside the state for one half of the first year. It is described here. I've done this twice now. In addition, the boat must have been purchased, and possession taken, outside of California. The process is well documented, you need proof of the out of state use, and they will check.

 

[guy with a boat]

Again incorrect. The boat must be used or stored outside the state for one half of the first year. It is described here. I've done this twice now. In addition, the boat must have been purchased, and possession taken, outside of California. The process is well documented, you need proof of the out of state use, and they will check.

The info in your link says it specifically excludes documented vessels. Maybe it works with a boat that you register in another state.

If you did this with a documented vessel and made it work, then you are fortunate.

Ask an attorney with marine experience or even smart industry pros how long your newly-purchased documented vessel has to be out of California to be sales/use tax exempt. The answers will be pretty consistent and it won’t be 6 months.

 

[Jorgeinseal]

CA State tax does not apply if buying a boat within an LLC

 

[Cold Duck]

In CA, in most places where you’d moor the boat, you can’t keep the boat indefinitely as a non resident (or resident) without paying taxes. Around January 1 you will probably get a tax bill regardless of where the boat is registered and where you live if the boat is in the water.
If you’re living on the boat in CA, register it. CA is very aggressive about collecting taxes.

There are other places you can leave a vessel and not get the annual tax letter. I have owned my own dock behind my house in the Sacramento Delta since 1978. No one checks my docks nor am I responsible to report who may be renting a dock space from me. Hundreds if not thousands of private docks are like this in the delta along with commercial marinas that do have to report tenants. There are other private docks in Ca., Balboa, Huntington Beach, etc. I have seen a Documented vessel for years at a private dock, along with vessels registered in Or. and Az. that don't have to pay anything to Ca. Technically the boat owner needs to report he's in Ca. just as someone who brings a car say from Ore. and stays more than 6 months. But these guys will never get a tax bill unless someone complains, which in the last 40 years I have not seen. I do agree that Ca. is very aggressive in collecting taxes. Any newly documented vessel that hails from a Ca. port or has the documentation papers sent to a Ca. address, even if hailing port is another state, or was a Ca. registered vessel and suddenly is documented in another state will get a letter and you will have to prove the vessel was not in Ca. at time of sale or for 12 months (this time might have changed, at one time it was only 6 months) following sale to avoid Ca. sales tax. And once located in Ca. you are responsible for the annual "use tax" based on the appraised value of the vessel if it is reported. There are legal ways to avoid Ca and other state sales taxes but that's a different thread.

 

[Cold Duck]

The info in your link says it specifically excludes documented vessels. Maybe it works with a boat that you register in another state.

If you did this with a documented vessel and made it work, then you are fortunate.

Ask an attorney with marine experience or even smart industry pros how long your newly-purchased documented vessel has to be out of California to be sales/use tax exempt. The answers will be pretty consistent and it won’t be 6 months.

When I did it, the Ca. time limit was 12 months. I bought in Fl., removed before they required sales tax (believe it was 90 days) Documented in Hawaii and had my paper work sent to my Ca. residence knowing Ca. would want tax but since boat would never be in Ca. I was prepared to provide supporting documentation for the year the vessel was in Ga. A year later, Ca agreed I had satisfied their requirements and I got a letter advising me of those results. Hawaii doesn't have sales tax on used vessels or cars and would only need to tax if we brought vessel to Hawaii. Actually, if I had the documentation address be my Hawaii address, Ca. most likely would not have caught it but it was just easier to use my Ca. address. This was incredibly simple and legal. PS, I don't pay attorneys if I don't have to LOL!

 

[MartyG]

CA or WA

We have lived in San Diego, CA and on Whidbey Island in WA but after retirement, sold our house in San Diego and made Whidbey our home. We have lived aboard in San Diego for 4 years in the winter (about 5 or 6 months). Works for us!