Georgia sales tax on boats

[Jim Martin]

Does anyone know the Georgia Dept. of Revenue rule on sales tax for boats sold between individuals? Last week, 8 months after we purchased our Jeanneau 35, we received a notice of sales tax due for the amount of $ 3,430. I've searched for a definitive answer but even the GA DOR website does not give information. I've found anecdotal info on various forums that says sales tax is not due on sales between individuals.

In our case there was a broker involved, but the title passed directly from the seller (a private individual) to me. My deposit check and wire transfer went to the broker, but the Closing statement shows the gross sales price paid to the broker, with 10% of the proceeds retained as their commission and the balance paid to the seller.

Is anyone familiar with Georgia's policy on this? Ivars, Guy or anyone else?

Many Thanks

Jim
Jeanneau SO35

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_ _

Jim Martin

Peachtree Laser, Inc.

404-352-2565

email: mailto:ptl...@bellsouth.net

website: peachtreelaser.com

[Mark J Wilme]

I can advise on MA and RI if it may help as a guide ?

We bought a boat from a private seller (via a broker) in Ma, we were resident in MA, but the boat was registered and kept in RI (a no boat tax state). MA dept of revenue tried to come after us for sales tax > 2 years after purchase and we had to prove that the baot was registered and kept in RI. In the event we (rightly so) paid no sales tax.

Did you buy, reside and keep the boat in the same state (GA) ?

Mark Wilme
Mark....@Gmail.com

+1 (508) 826 5607

www.linkedin.com/in/markwilme            

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[Jim Martin]

No. I should have mentioned the boat was purchased in FL and moved to GA. We are GA residents. No FL sales tax was collected as we moved the boat almost immediately after closing. 

Sent from Jim Martin's iPhone

[Schoen Fitzgerald]

https://links.casemakerlegal.com/bDocView.aspx?statecd=ga&codesec=560-12-1-.07&sessionyr=&Title=560&version=&datatype=D&cvfilename=gaadmincv2016Department560Chapter56012Subject560121.htm&noheader=0&nojumpmsg=0&userid=REPLACE_LOGINID&categoryAlias=ADMIN&state=Georgia&strdatatype=ADMIN&catcalled=Rules%20and%20Regulations&browseLevel=3

Best I can do on short notice. If the link above doesn't work, You can Google it - The Cite is: Cite as Ga. Comp. R. & Regs. R. 560-12-1-.07

[Schoen Fitzgerald]

Are they trying to impose a "Retailers Sales Tax" or an "Excise Tax". Other questions: Does GA "title" boats like autos (KS doesn't)? Did "title" (or documentation) pass directly from the PO to you - that might be your documentation to argue/prove "casual sale". Going to come down to whether it was a casual sale I believe. You have a CPA for your business? You might have him/her research it.

[Captain Guy]

Well Jim, you screwed the pooch... based upon your description, it was not a private sale between individuals, but sold by a Licensed Broker (FL Yacht Brokers are strictly regulated (unlike GA)).  If you told him you were leaving FL at time of closing, he did not have to collect, but when you registered in GA, they couldn't find any record of a tax paid on that HIN.  Regardless of the paperwork flow, the broker was the agent and was paid commish.  If it had been a GA dealer, he would have been obligated to collect the sales tax at time of purchase.

 

Guy

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[Schoen Fitzgerald]

My deposit check and wire transfer went to the broker, but the Closing statement shows the gross sales price paid to the broker, with 10% of the proceeds retained as their commission and the balance paid to the seller.

I think this is the death sentence. Broker got the money and paid the seller. Not casual. I think it's a different animal if you had paid the seller the net directly and separately compensated the broker for services rendered.

[Jim Martin]

No "Retailer's Sales Tax" or "Excise Tax".  GA does not title boats, though the title passed directly from the seller, an individual, to me, also an individual. If a "casual sale" exists, this would certainly fit the definition. Isn't there a difference between buying a boat through a broker and buying a boat from a dealer?

I'm on the road right now (literally on a music tour bus somewhere between Nashville and Wichita), bur the statement from the GA DOR referred to a 1953 Georgia statute, and made reference to the fact that the boat was transferred from FL to GA. FWIW, when we purchased our First 32a5 in 1999, and also moved from FL to GA, we were never charged sales tax, even though we had a bank loan on the 32s5. 

Jim  

_ _

Jim Martin

Peachtree Laser, Inc.

404-352-2565

email: mailto:ptl...@bellsouth.net

website: peachtreelaser.com

[Mohammad Bayegan]

I live in Texas and have no idea about GA taxation. 

In TX the tax that you have been required to pay would be called " User Tax" regardless of how or where you both the boat. As long as the boat is in Texas waters for most of the year even though the home port of the boat maybe somewhere else.

Morongo B 49

Sent from my Verizon Wireless 4G LTE smartphone

[Schoen Fitzgerald]

Well, that's a coincidence! Where's the Gig and when? If you have any time, contact me. Three One Six Six Eight Five Nine Two Two Five - Office Phone. 

Fitz, Wichita

[Jim Martin]

Brad Paisley at Intrust Bank Arena. Call me in the AM  404-401-8618 if you'd like to come to the show.

Jim

Sent from Jim Martin's iPhone

[Larry Cost]

Jim,

I have purchased 3 sailboats over the last 15 years. Two of them were purchased from individuals through a broker in Georgia and the last was purchased from an individual through a broker in Texas. I live in Georgia and all three boats either remained in Georgia or were brought to Georgia. I have never paid sales tax on any purchase.

Larry

[Michael B. Shapiro]

Jim

 

Pretty sure this was part of the changeover last year or the year before when Georgia modified ad valorem taxes on vehicles.  No longer do we pay an annual tax on cars, only the “tag” renewal fee.  All tax is assessed at the moment of purchase.  I believe, but have not checked the statute, that it also covered other things like boats and airplanes.

 

Hope to see you on Lanier this summer.

 

Michael B. Shapiro

mbsh...@bellsouth.net

S/V My Funny Valentine

Beneteau Moorings 38

 

Jim Martin <ptl...@bellsouth.net>: Feb 24 06:17PM -0500

Does anyone know the Georgia Dept. of Revenue rule on sales tax for
boats sold between individuals? Last week, 8 months after we purchased
our Jeanneau 35, we received a notice of sales tax due for the amount of
$ 3,430. I've searched for a definitive answer but even the GA DOR
website does not give information. I've found anecdotal info on various
forums that says sales tax is not due on sales between individuals.
 
In our case there was a broker involved, but the title passed directly
from the seller (a private individual) to me. My deposit check and wire
transfer went to the broker, but the Closing statement shows the gross
sales price paid to the broker, with 10% of the proceeds retained as
their commission and the balance paid to the seller.
 
Is anyone familiar with Georgia's policy on this? Ivars, Guy or anyone else?
 
Many Thanks
 
Jim
Jeanneau SO35
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Jim Martin

[Pattie Cunningham]

I bought my boat in nj and got documentation from the broker that I was registering it in NYC. I had to pay over $7,000.00 to the broker for the NY DMV for sales tax before I got my registration. 

Pattie

Sent from my iPhone

[Schoen Fitzgerald]

Jim. Good to talk with you this morning and really appreciated your offer on the show tonight. Sorry I couldn't make it work and that we couldn't at least get together to put a face with a name. Hope all went well. Give me a heads up next time you come in for a show.

I searched and found this which appears to cover the basis for GA DOR's assertion of the tax - it's Use Tax - see this document from 2011.

http://dor.georgia.gov/sites/dor.georgia.gov/files/related_files/document/LATP/Bulletin/2-27-12__Boat_Dealers_IB_12_12_2011_0.pdf

Fitz

[Jim Martin]

Thanks Fitz. I think I'm in a grey area. Though the boat was sold through a broker, the broker never had title. Probably should have paid the seller & broker separately. May be tough to call it a casual sale. 

Jim

Sent from Jim Martin's iPhone

[Captain Guy]

Brokers rarely have title, just like car dealers rarely have title... they sit in a file folder till sold.

 

Yes, paying the seller separately might have worked, but that is against FL Yacht Broker statutes and/or best practices. FL Title XXIV, CHAPTER 326 YACHT AND SHIP BROKERS

 

Guy

 

From: Jim Martin

Sent: Friday, February 26, 2016 11:20 AM

To: benetea...@googlegroups.com

Subject: Re: {Beneteau Owners} Georgia sales tax on boats

 

[dbg...@mindspring.com]

re: Sales tax...  don't volunteer to pay it until someone comes to collect it...:=)  :=)   then pay it,  to the state it will be used in...  all of this will come forward during the registration process...  if the boat will be used in another state other than of personal residence,  then the state of use trumps the home state of owner to collect sales tax

once a broker or dealer is involved, sales tax is in play...  if a boat is sold out of state,  the selling dealer / broker can avoid collecting sales tax by completing an out of state affidavit of sale  signed by the parties,   the purpose is to avoid double taxation and going through process of getting a refund for improperly collected sales tax... if sales tax has been improperly collected apply for a refund... happens a lot, don't let it slide

same applies for use taxes / registration which also gets confusing as to which state is correct to collect...  the state of use governs... many times this gets confusing with financing in state of residence while the boat is used / moored in another state

[BigEasy]

My suggestion is to send an email to the GA Dept of Revenue describing a hypothetical  sale to determine  the official tax policy or call them directly and question them about a hypothetical sale.  I liked having a written email response and contact person's name in the event that there was "differing opinions" from the tax department personnel.

That's what I did in LA when I was looking for my last boat.  The LA Dept of Revenue supplied a quick response.  Regardless of where the boat is purchased, if it between two private individuals, it is considered a casual or private sale -- no sales tax is due.  If a broker is involved it is not a casual sale and sales tax is due.  I emphasized to them that the broker is only acting as an intermediary for advertising & showing the boat and that the payment would be made directly to the owner; however, the tax department  emphatically stated that a brokered sale is taxable.  I finally bought a boat from a private owner in SC with no broker involved.  When I brought the boat back to LA  I had to supply proof that the original owner paid sales tax and had the boat was registered in SC.  I had to personally show proof of this as well as the notarized bill of sale to my local taxing authority as well the LA Dept of Revenue.  In the bill of sale,  I also included verbage that the sale was a private sale between two private individuals to emphasize the the sale was "casual".   It was an all day process to visit the local tax people and state tax people in Baton Rouge.  Furthermore, the LA Dept of Wildlife and Fisheries will not register a boat until you present them with an "official" paper that states that the necessary sales tax was paid or in my case, exempt from sales tax.  It was an arduous process; however, it saved me $7500.

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email: mailto:...@bellsouth.net

website: peachtreelaser.com