"Homebuilt" makes you a "dealer" in Tennessee

[DCockey]

Addendum to my post above.

Many if not most Americans are convinced that the sales tax is different than VAT. The biggest real differences as far as the consumer is concerned is that VAT in most European countries is a considerably higher rate than in most places in the US, and that in Europe (at least where I've been) VAT is usually not shown separately.

[michael pierzga]

Originally Posted by erik818

Taxes are very seldom earmarked for a certain expenditure i Sweden, so it's difficult to say which tax pays for what. Commercial shipping pay through fees for much of the infrastructure needed for shipping, which I believe is quite reasonable. The system with lighthouses and bouys are where commercial shipping needs them, not where the leisure boats go. For leisure boating, taxes on gasoline and diesel alone amounts to much more than whats spent by the state on leisure boating. In addition to that there is VAT on everything, and boat owners tend to spend a lot on their boats.

My objection to a boat register is that it provides the state with more control and more information about the citizens than needed. A yearly fee of $3 for a small dingy hardly pays for more than the cost of the register itself, so also from a fiscal perspective it's an inefficient form to collect taxes.

Erik

Intrusion and paperwork is a worry. Hard to get around it these days.

In some counties the yearly users fee for boats is expensive. Just look at what is presently happening in Italy. Eye watering expensive.

[troy2000]

Originally Posted by erik818

Taxes are very seldom earmarked for a certain expenditure i Sweden, so it's difficult to say which tax pays for what. Commercial shipping pay through fees for much of the infrastructure needed for shipping, which I believe is quite reasonable. The system with lighthouses and bouys are where commercial shipping needs them, not where the leisure boats go. For leisure boating, taxes on gasoline and diesel alone amounts to much more than whats spent by the state on leisure boating. In addition to that there is VAT on everything, and boat owners tend to spend a lot on their boats.

My objection to a boat register is that it provides the state with more control and more information about the citizens than needed. A yearly fee of $3 for a small dingy hardly pays for more than the cost of the register itself, so also from a fiscal perspective it's an inefficient form to collect taxes.

Erik

Here's what California has to say on the subject:

The following vessels do not have to be registered in California:

•Vessels propelled solely by oars or paddles.
•Nonmotorized sailboats that are eight feet or less in length.
•Nonmotorized surfboards propelled by a sail and with a mast that the operator must hold upright.
•A ship’s lifeboat (a dinghy is not a lifeboat).
•Vessels currently and lawfully numbered (registered) by another state that are principally used outside California.
•Vessels brought into California for racing purposes only (exempted only during races and tune-ups).

My 16' flat bottomed canoe didn't have to be registered at all, because it's powered by paddles. But I did it anyway, because I was planning to use a small outboard on it occasionally.

[liki]

Originally Posted by DCockey

Many if not most Americans are convinced that the sales tax is different than VAT. The biggest real differences as far as the consumer is concerned is that VAT in most European countries is a considerably higher rate than in most places in the US, and that in Europe (at least where I've been) VAT is usually not shown separately.

Thanks for the information. But still, based on what I have heard, gathered and read from here and there the sales tax (where applicable) has some principal differences when compared with VAT as-in-use inside EC. (EDIT: I will try to find some time to highlight them later.)

[michael pierzga]

Yah , Tax is complex. Sometimes I think they should cancel every tax , then start all over again with a fresh sheet of paper to simplify and make it logical.
Boats are particularly complex. In the US and elsewhere , states actually compete with tax advantages. Florida for instance gives Superyacht owners a tax break. Rich folks feed the Florida yacht brokers , take advantage of this tax break, flag florida, then move the yacht to a more suitable state, but one with high tax.

Happens in every society...Channel Islands, Cayman, Marshal Islands.....

[DCockey]

Originally Posted by liki

Thanks for the information. But still, based on what I have heard, gathered and read from here and there the sales tax (where applicable) has some principal differences when compared with VAT as-in-use inside EC. (EDIT: I will try to find some time to highlight them later.)

One difference which is frequently said to be a fundamental difference but is isn't a fundamental difference is that VAT is nominally collected at each stage of production but a sales tax is collected at the final sale to the consumer. It is really an difference in how the accounting and administration is done, not on the net tax collected.

Simple example:

A widget sells at retail for $400 less tax. There are four stages in the production and distribution of the item, and after each stage the value as determined by price less tax goes up $100. Tax rate is 10%.

Sales tax:
The first three participants pay nothing in sales tax on their "added value" because they are registered as producers. The final seller collects $40 from the final purchaser on the final purchase price of $400 and sends the $40 to the state. The consumer pays $40 in tax and the state receives a net of $40 in tax.

VAT:
The first producer sells the unfinished product to the second producer for $100 and collects $10 in VAT which is sent to the state.
The second producer sells it for $200 to the third producer and collects $20 in tax. The second producer's added value is $100 ($200 less $100) so they send $10 to VAT to the state and keep the other $10 to offset what they paid the first producer.
The third producer sells it for $300 to the fourth producer and collects $30 in tax. The third producer's added value is $100 ($300 less $200) so they send $10 to VAT to the state and keep the other $20 to offset what they paid the first producer.
The fourth producer sells it for $400 to the consumer and collects $40 in tax. The third producer's added value is $100 ($400 less $a00) so they send $10 to VAT to the state and keep the other $30 to offset what they paid the first producer.
The consumer pays $40 in tax and the state receives a net of $40 in tax. Same as for the sales tax.

The VAT method adds accounting complications for the producers. But it simplifies tax collection when the producers are located in different states.

[hoytedow]

This is a prime case of "they eventually run out of other people's money" (Margaret Thatcher) so now they are coming after the money of this man.

Justification?

None!

[BPL]

Other than taxing and charging you, is there a justification for any small boat registration?

[troy2000]

Originally Posted by BPL

Other than taxing and charging you, is there a justification for any small boat registration?

Aside from the monetary angles, automobile registration is a tool to help combat theft and fraud. While the system isn't 100% effective, I'd say it works well enough to justify its existence.

Supposedly, registering boats serves the same purpose.... although I doubt it works as well with them.

[Ike]

Most small recreational boats were not registered in the US until the sixties, when the boat population grew to such a size that theft became a problem, and the US Congress included boat registration in the Federal Boating Act of 1958

Fewer than one percent of vessels in the U.S. are documented with the Coast Guard with most pleasure boats opting for state registration. Among the statutes dealing with registration are the Federal Motorboat Act of 1910 which placed on the federal government the responsibility to regulate recreational boating in the U.S.; the Federal Numbering Act of 1918 which instituted a numbering system for all undocumented vessels; the Federal Boating Act of 1958 which shifted the responsibility of numbering undocumented vessels from the federal government to the states; and the Federal Boating Safety Act of 1971, mostly dealing with recreational boating, which entrusted states and territories with insuring minimum registration requirements set by the federal government.

http://www.solarnavigator.net/boat_r...in_the_usa.htm

Unlike in most nations in Europe, most of the waterways in the USA and Canada are inland, lakes, rivers, streams. The vast majority are used by small craft, from canoes on up to boats large enough that they can't be trailered. These waters are not under Federal jurisdiction. They are the responsibility of the states and in some cases local municipalities. Boating became so popular after the introduction of mass produced fiberglass boats that it grew by leaps and bounds. The most recent figures show about 20 million registered boats In most states this does not include canoes, kayaks row boats and small sailboats. This probably doubles that number.

Most of these are trailerable boats and can be easily moved from state to state. In addition boat theft has become almost as common as auto theft. States need some means to keep track of all of this and a means to fund state supported facilities for boating and fishing. Boat registration is not just the means of keeping track of who owns what but a revenue stream from registrations and sales tax.

Even this was not enough so in the 70's the Aquatic Resources Trust Fund was created. Sales tax on fuel purchased at marine gas stations goes into the fund and is split between the states and used for fishing and boating resources.

As said many boats are not registered, such as my sailing dinghy and 12 foot rowboat. The odd part in Washington state is that if I use them on waters with sole state jurisdiction, I don't have to register them but if I use them on waters with both Federal and State jurisdiction (such as Puget Sound) then I do have to register. Registration laws vary from state to state. But under federal law any motorized boat has to be registered. SO as long as I don't put a motor on my rowboat, I don't have to register it.

Anyway, this nonsense in Tennessee was a screw up by the state and they backed down very quickly when it hit the main stream media. Someone in authority must have cracked a few heads and told them to get their act together. Oddly Tennessee is a major center of mass produced boats, It is one of their largest industries. I don't know how popular building your own boat is there, but there are lots of lakes and reservoirs and rivers in Tennessee. Boating is very popular there and fishing is probably almost the state sport.

[erik818]

Some years ago we were close to getting a mandatory boat register, but then there was a change in government and the boat register administered by the authorities was closed. Boats shorter than 12 m or with a beam less than 4 m still don't need to be registered in Sweden.

As Troy points out, an argument for small boat registration was to combat theft and fraud. Boat owners suspected taxation as the rationale, which was denied by all proponents of a boat register except the far left. The taxation argument has declined since property tax was abolished a few years ago; there is no good reason to single out boats for taxation.

There is now a volontary boat register administered by the insurance companies. If boat registration actually would reduce fraud and theft, it would show on the insurance cost. I don't know if any insurance companies offer lower rates if you register your boat. I doubt that a boat register has any significant effect on fraud and theft, and I don't know if the cost for fraud and theft is more than marginal anyway. Unless the cost reduction with a boat register is very substantial I will keep out of registers myself. I believe in permanently marking all valuable parts and items in the boat and taking note of their serial numbers, but I don't see a good reason to share this information unless the boat is stolen.

The idea of a mandatory boat register might be dead, but there are people arguing for boating licences or similar. Today, no licence is needed and there is no age restriction for driving a boat shorter than 12 m or less wide than 4 m. There are no statistics showing that this causes any problems that a boating licence would be likely to fix. Somehow I suspect that the lack of regulations for small boats, and particulary the absence of problems from it, makes some polititians uneasy. Maybe there are more regulations we can do without.....

Erik

[hoytedow]

One thing about registering boats. When the government turns hostile they will use that knowledge against you. Remember how the NAZI's ran things while they were there (in Norway and the other Low Countries).

[troy2000]

Originally Posted by hoytedow

One thing about registering boats. When the government turns hostile they will use that knowledge against you. Remember how the NAZI's ran things while they were there (in Norway and the other Low Countries).

Oh dear. That means they know Blue Rose exists now, and who owns her. Anytime they decide only the government should own flat bottomed canoes, they can come take her away from me. What was I thinking, when I registered her?

[hoytedow]

Originally Posted by troy2000

Oh dear. That means they know Blue Rose exists now, and who owns her. Anytime they decide only the government should own flat bottomed canoes, they can come take her away from me. What was I thinking, when I registered her?

I know, right. They will also take your guns and label you a gun dealer.

Fight the power.

http://www.youtube.com/watch?v=PRkw9UnVhug

[Milehog]

Troy, sell the Rose to a nameless transient for one dollar keep the reciept.