Buying a Boat Out of State: Tax, Title and Transport

Use tax follows the boat home

Shopping across a state line rarely dodges sales tax. Most states pair their sales tax with a use tax that applies when you bring a taxable item home and start using it. Georgia's Department of Revenue puts it plainly: use tax is due on the first use, storage or consumption in Georgia of goods bought at retail somewhere else.

The good news is that states generally credit tax you legally paid in the other state, so you pay the difference rather than twice. Georgia reduces use tax by like taxes paid elsewhere, and Alabama gives full credit for state and local sales or use tax paid to another state. Florida allows a credit when you provide documentation that a like tax was paid. Keep the bill of sale and the tax receipt.

Timing can change the taxable amount. In Georgia, property used outside the state for six months or less is taxed on the purchase price. Use it elsewhere for longer and the tax is based on the purchase price or fair market value, whichever is lower. Florida taxes a boat brought in within six months of purchase when you title or register it there.

Buying from a dealer in another state

Dealer purchases have their own traps. Georgia does not treat watercraft as motor vehicles for its nonresident exemption, so a Georgia dealer collects Georgia sales tax on a boat delivered to you in Georgia even if you tow it straight home. The dealer can skip the tax only when the dealer or an employee delivers the boat outside Georgia, backed by form ST-6. Trailers are different: a nonresident can buy one tax free on form ST-8 if it leaves the state right away.

Florida goes the other way. A nonresident buying from a registered Florida dealer or broker can take delivery tax free by signing removal affidavit GT-500003. A boat under 5 net tons has to leave within 10 days of purchase, unless it goes straight into a registered repair yard. You then owe the Department of Revenue proof the boat left within 10 days of removal, such as fuel or dockage receipts that identify it. Within 30 days of removal you also have to show it was titled, registered or documented elsewhere, or that you applied. The exemption does not cover the trailer. Browsing Florida boats for sale from out of state? Plan the trip home before you sign.

What your home state charges

New Jersey taxes boats at half the normal sales tax rate, which the Division of Taxation lists as 3.3125%, and caps the tax at $20,000 per sale. Residents who buy from an out-of-state dealer owe use tax when they first use the boat in New Jersey, and that includes documented vessels. A boat bought out of state may be used in New Jersey for up to 30 days a calendar year without triggering use tax, provided it is legally numbered elsewhere and not used in a New Jersey business. Compare against local New Jersey listings.

New York residents who buy out of state owe use tax at the earliest of three points: when DMV registration is required, when the boat is actually registered, or after more than 90 consecutive days of use in the state. The taxable price is capped at $230,000, and so is the credit for tax paid elsewhere. Check boats for sale in New York before you assume a trip south saves money.

Alabama taxes motorboats like cars. The state rate is 2% on both casual sales and boats bought outside Alabama, plus county and city tax where the buyer lives. The county licensing official collects it before the boat is registered. See Alabama boats for sale.

For rates and caps in other states, see our guide to boat sales tax by state.

Title and registration across a state line

Your title office will want proof the seller owned the boat under the rules of the state you bought it in. That gets awkward when the selling state does not title boats. New Jersey asks for the seller's registration plus a notarized bill of sale in that case. Alabama accepts a signed title, a Coast Guard record showing the boat is no longer documented, or for other cases a certificate of origin, bill of sale or other record that satisfies the office.

Deadlines are short and vary:

• New Jersey: title within 10 working days of purchase or face a $25 penalty. The MVC lists a $60 title fee, or $85 for a financed boat, plus registration.
• Alabama: apply for a title no later than 20 days after the transfer or the date Alabama becomes the state of principal use.
• Florida: 30 days from purchase or from the date the boat entered Florida. A boat already titled or registered in another state gets 90 days after it enters Florida.

Georgia registers boats through the DNR online, by phone or by mail, and says a registration can take four to six weeks to arrive. If the out-of-state title is held by a lender, the lender can record its lien with the DNR as part of the Georgia registration. Once the lien is released, Georgia accepts the original title. Start with Georgia boats for sale.

Coast Guard documented boats

A boat of five net tons or more can be documented with the Coast Guard instead of titled by a state. Ownership changes go through the National Vessel Documentation Center, whose online eStorefront handles exchanges of a Certificate of Documentation and filing of bills of sale and mortgages. Documentation does not exempt the boat from state tax or registration everywhere. New Jersey requires state registration for a documented boat used there more than 180 days or kept in a rented or owned slip or storage space, though it issues no title. Florida exempts documented vessels from its title.

Getting it home

Federal rules hold states to a 102 inch, or 8.5 foot, width limit for vehicles on the National Network of highways. Anything wider on a trailer is oversize. The Federal Highway Administration says the federal government does not issue oversize permits; each state does, so you need one from every state on the route. FHWA keeps a list of state permit offices and phone numbers. Escort and travel-time rules differ by state, so read each permit.

Do not forget the trailer's own tax and title. Georgia charges use tax on an imported trailer at the rate of the county where it is registered, with credit for tax paid elsewhere. If the trailer comes with the boat, put its price on its own line of the bill of sale.

Paperwork to bring home

• Original title signed over to you, or the seller's registration and a notarized bill of sale from a non-title state
• A bill of sale listing the price, HIN, engine serials and a separate trailer price
• Proof of any sales tax paid to the selling state
• A lien release, or the lender's details if the title is still held

Rules change and local rates differ. Confirm the exact amount with your state's revenue office or titling agency before you close, or ask a broker who handles interstate deals.