Tax implications of WA resident keeping boat in OR?

[Kawini]

I called the WA Dept. of Licensing today to see what information I'd receive. The customer service person (who was very friendly) first told me that I could spend as many days as I please in WA each year without triggering a use tax obligation so long as no individual visit is more than 60 days. When I expressed some skepticism at that response, she put me on hold to speak with her "help desk."

After about 10 minutes, she came back on and explained that the situation is exactly as Twisted Tree describes it: The first 60 days of use are not counted continuously from the first entry into WA. Only days actually spent in WA count towards the 60 days. Before that 60 day threshold is reached, a non-resident boater needs to apply in person for a permit which is good for 60 additional days counted continuously from the date of the issuance of the permit. In other words, the permit expires in 60 days no matter how many days are spent in WA during that 60 day period. The 60 day permit can be renewed for another 60 days - again in person and again the permit will expire 60 days from issuance.

 

[Kawini]

For those of you who are interested in this matter, I have had a couple of other conversations with employees of the WA Dept. of Revenue and the WA Dept. of Licensing.

It is true that there is confusion amongst the agencies as to how to count the first 60 days in WA waters -- that is, whether or not they are counted consecutively from the date of the first entry regardless of use in WA, or whether only days in WA are counted against the 60 days. This person was able to provide me with internal written guidance at WA DOL which states as follows:

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Nonresident Vessel Permit

Vessels qualify for issuance of a nonresident vessel permit (Out-of-State permit) when both of the following apply:
• The vessel is currently registered and primarily used in another state.
• The vessel owner is using it on Washington waters for more than 60 days.
A vessel registered in another state may operate on Washington waters for up to 60 days. However, on or before the 61st day of use, the vessel owner must obtain a nonresident vessel permit to continue operating on Washington waters without registration. The vessel owner may obtain a second permit. Vessels with a nonresident permit may operate on Washington waters for up to six months in any continuous twelve-month period. After that, the vessel owner must register the vessel in Washington.

The first 60 days of use on Washington waters do not need to be consecutive. However, when issuing the permit, always use the vessel's original entry date into Washington in the "Date Entered WA Waters" field, regardless of how many days of actual use have elapsed.

DRIVES generates a registration certificate and 60-day temporary permit. The vessel owner must keep both on the vessel at all times. The vessel owner must display the temporary permit so it is visible to law enforcement from either the dock or the water, and must protect it from the weather.

RCW 88.02.620

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So, there you have it from the horse's mouth.

 

[Rigtyme]

Washington Cruising Permit

The boat will not be titled in New Mexico; it will be USCG documented with a New Mexico home port. A wrinkle that is particular to New Mexico is that USCG documented vessels need not be registered - even to operate in the state. Nonetheless, since I will be operating entirely out of New Mexico (principally BC and AK) I don’t feel comfortable without a registration. New Mexico will allow me to register the boat for a nominal fee, but I need to have the HIN reported to the state registration board by a Certified HIN reader since the boat is not physically present.

This is all very state specific I believe.

If there are any other New Mexicans out there with PNW boats, I’d love to communicate with you about this.

Kawini:


Check with Washington on the types of permits they have for non-resident individuals. We had our boat in WA in 2017, and, if I recall correctly, we paid $500 for a 1 year permit. They have different restrictions for different permits. They also have different permit types for corporate and LLC owned boats. Our boat was USCG documented, and not registered in a state. We registered the dinghy in WA. Hope this helps.

 

[tiltrider1]

It is perfectly legal for a Washington resident to buy a boat in Oregon, lic/reg in Oregon, keep it in Oregon and not pay sales tax. Once the boat enters into Washington you will owe Use Tax, not Sales Tax. The difference is Use Tax will be figured on the current value of the boat at the time it enters Washington. ‘Washington is lazy, they will take your purchase price and deprecate it to come up with current value. Now comes the grey area. The law doesn’t talk about the Columbia River. The state would have to prove you crossed a state line. Pretty hard for them but they could make your life uncomfortable. Most likely you will never have an issue until you tie to a Washington Dock.

 

[Bryant]

Sales tax

So is it 60, 90 days or 6 months in the state before tax is due.

I have friends that store vintage and collector cars in Oregon in order to avoid Washington State sales tax. They will occasionally bring one to Washington and keep it here for a while. They use the storage facility address for any correspondence regarding the cars.

When we were stationed in Whidbey Island I had a boat registered in Fl. I was able to obtain “temporary registration” which I had to display. I was allowed to keep the boat in the water and use it for 6 months from that date. The authorities checked this periodically. After that it had to be on the trailer and out of use till the next year. If you are a Washington State resident and keep and use the boat in Oregon you don’t have to pay sales tax. The minute you enter Wa State waters, as a resident, you owe sales tax.
Sadly, I’m the PNW, they are going to tax you pretty heavily one way or the other. If you live in Wa State and want to own and use a boat, you are better off in the long run to just pay the necessary taxes up front, then keep and use your boat where you live. The tax is just going to have to be part of the overall figure of the boat you are looking to buy.
One thing to consider is that if you make an offer on a boat in Oregon you can always reduce the offer by the tax bill you will get in Wa. The argument “I’m here now with an offer and funds to buy” is a pretty strong one. Particularly if the boat has been on the market for awhile.
Just thoughts.

 

[lwarden]

Very informative thread.
I've been very confused over this situation of a non-resident purchasing a boat in WA and using it for a period of time and avoiding the WA tax.
Our residency is California, and they will get their pound of flesh from me when the boat enters the state of taxation.
We just purchased a boat located in Anacortes and it's kept on the hard. The plan is to come up every few weeks to use it for a long weekend, then move it back to California before the winter.
The way I read the tax laws in WA as long as we don't have it in the water and are using it more than 60 days (unlikely at this point) we will be OK.

But then there is this wrinkle:
Sales Tax exemption for vessels purchased in this state by nonresidents
Both domestic and foreign nonresidents may purchase a vessel in this state without payment of sales tax pursuant to RCWs 82.08.0266
and 82.08.02665. Both statutes require:
1. The vessel will not be used within this state for more than 45 days, and
2. An appropriate exemption certificate, supported by identification signed by the purchaser establishing that the purchaser is a
resident of another state or foreign country (and not a Washington resident), and that the vessel is for use outside of this state.
Once the purchased vessel has been removed from this state (within 45 days), it may return to this state tax exempt for the balance of the
temporary use period (the initial 60 days plus two 60 day extensions for a total of 180 days for vessels owned by individuals or 60 days for
vessels owned by others within a continuous 12-month period). RCW 82.12.0251.

So, it appears that I would have to remove it from WA waters during the first 45 days. This is a problem now since I had intended to head to Canada and then reenter. Now that isn't possible within the 45 day window, so I'm kind of stuck. I guess this isn't a problem if we don't physically use it for more than 45 days, again not likely. But are these 45 days calendar days or use days on the water?

Anyone with a better understanding of this situation?

It's all super confusing...