Registration transfer question

[Charlesoceanone]

I live in Illinois but boat on lake of the ozarks in Missouri. I am thinking of moving the boat to Lake Michigan. I bought my boat last year and paid the in lieu of sales tax fee and last years personal property tax that is required in Missouri. The boat is registered in Missouri as this is where it stays. My question is if I move the boat to Illinois and register it here do I have to pay additional sales tax? This may be a weird question but can’t seem to find an answer on the forum.

 

[Knotayat]

I don't believe so, but there is paperwork you will have to submit.

Illinois will want 6.25% of the current value of the boat, but you can subtract the sales tax that you paid to Missouri.

Google form RUT-75. That is what you will need proof of submitting before getting your IL Registration.

"Line 1 - Purchase price or fair market value - Tax_is_based_on_the_higher_ of_the_purchase_price_or_fair_market_value_of_the_watercraft_or_aircraft_on_the_purchase_date_or_date_brought_into_Illinois,_whichever_is_later._"

 

[MonacoMike]

How long would he need to own the vessel not to owe Illinois sales tax?

MM

 

[Knotayat]

I don't think length of time matters. I'm not sure how the states fight it out on who gets the sales tax after the move, but you wouldn't pay it twice.

You just have to prove it was paid in another state. I believe the only way that he would owe Illinois is if Missouri had a lower tax rate, then he would owe the difference.

 

[MonacoMike]

I don't think length of time matters. I'm not sure how the states fight it out on who gets the sales tax after the move, but you wouldn't pay it twice.

You just have to prove it was paid in another state. I believe the only way that he would owe Illinois is if Missouri had a lower tax rate, then he would owe the difference.

So riddle me this: a boat owner relocates to Illinois, the have owned a boat in another state for X years. Would they owe this sales tax or difference if X=1, if X=10.

MM

 

[Knotayat]

I'm no expert, but I understand it as Illinois would want 6.25% of the current value of the boat, no matter how long he owned it, less what he paid to the previous state when purchased.

If the boat has dropped in value over the years, there would most likely be no sales tax due.

Let's say the boat was originally 500,000 and he paid 3% tax, $15,000. Now, many years later, the boat is worth $200,000. Illinois would want $12,500, but seeing that he previously paid $15,000, no tax is due.

 

[MonacoMike]

I'm no expert, but I understand it as Illinois would want 6.25% of the current value of the boat, no matter how long he owned it, less what he paid to the previous state when purchased.

If the boat has dropped in value over the years, there would most likely be no sales tax due.

Let's say the boat was originally 500,000 and he paid 3% tax, $15,000. Now, many years later, the boat is worth $200,000. Illinois would want $12,500, but seeing that he previously paid $15,000, no tax is due.

The Illinois boat tax is simultaneously puzzling and unreal that residents let their state do this to them. I heard a story of an Illinois resident that bought a Michigan registered boat through a Illinois broker, and had to pay Illinois sales tax to register it in Michigan.

MM

 

[Knotayat]

Yeah, I purchased my boat recently in Wisconsin from a private party (IE, no sales tax paid). I have to register it in Illinois within 30 days of purchase, because I live in Illinois. I am not supposed to pay sales tax until I bring it to Illinois. It is being stored in Wisconsin for the winter. I can not get my registration until I pay the sales tax. It's a circle, but, I found out, just to register it and pay the sales tax at the same time when I do finally bring it to Illinois.

Also, a friend of mine sells used motorcycles. He says that there are reciprocal states, and non reciprocal states with Illinois.

If you live in a reciprocal state, the buyer pays sales tax to Illinois.

If you live in a non reciprocal state, the buyer pays the sales tax when they register in their home state.

I would assume that it is similar with boats.

And yes, I agree, Illinois is tough state to deal with regarding taxes!

 

[MonacoMike]

Check out new Buffalo, you could register the boat and Michigan and only pay a registration fee once every three years.

MM

 

[WV 320 Dancer]

Why don’t you just Federally Document the boat that is what I have always done. I have to pay my personal property tax each year but not sales tax.

 

[Charlesoceanone]

I am a documented boat as well as a state registration. I need it this way for Missouri. Ihave not seen it written but I’m sure Illinois will require state registration. I will have to do the math but I don’t think I’ve paid more than the Illinois taxman will want. I may need to look closer and calculate when to make such a move so not to pay more to the Illinois debt interest payments.