I am selling my old boat soon. It is a private sale. How do we deal with the sales tax? There is no mention of taxes on the 2001 title. I can see how to transfer ownership and put in a sale price but I am not sure if I need to collect it and send it in with the title transfer or if the new buyer deals with it. Thanks. Mrt.
Boats & Motors
Who collects the tax when you sell your boat?
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I know my reply is a bit late, but I hope it helps. When you sell your boat, the responsibility of collecting and paying the sales tax may vary depending on the state you live in. In some states, it is the seller's responsibility to collect and remit the sales tax, while in others, the buyer is responsible for reporting and paying it. I’d recommend checking with your local Department of Motor Vehicles or tax office to find out the specific requirements in your state. Another thing to consider is creating pay stubs to confirm the amount of income you received from the sale. This can be especially helpful when it comes to correctly calculating the amount of tax you need to pay on the sale.
Not sure where you are from, but in MN, there is no sales tax on a used boat. There is however on the trailer. The trail tax gets collected when the new owner registers the trailer in his name. For the boat there is a transfer fee, registration dollars are collected every 3 years through boat licensing.
It is the law, so why should one person cheat on taxes while the rest of us pay their way? We could debate the reasoning for all taxes and come up with a way around not paying them, but that is called tax evasion, isn’t it?
The DNR needs X amount of dollars to maintain lakes and facilities, so if they don’t get it from one pocket they will just get it from another.
I did learn one thing from this thread and that is, that you don’t have to pay taxes on the trailer. I am just curious why that is? If you buy a new car, you don’t exclude the tires when computing the sales tax.
The buyer pays sales tax to the state when he registers the boat. You should write the buyer a bill of sale when he buys it. That will leave you free and clear in a case where he doesn’t register it. If it is still in your name and he causes damage to a person or object, you could be held responsible.
Buyer pays the sales tax and title/ registration fee to the DNR upon purchase. The amount owed is based upon the purchase price that the SELLER writes on the title. I have never written the actual sale price, usually about half. I think it is BS they get to keep collecting sales tax over and over again on the same item. Also the value of the trailer is not included in the price you write on the title.
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