Jump to content

Lake Michigan sailors - where to register a used boat?


Recommended Posts

I apologize if this is off-topic for the 'sailing' forum, but I couldn't find a better place to ask.

I live in Illinois and am buying a boat in Wisconsin. The boat will be in Wisconsin 100% of the time (slip and winter storage). Sales taxes in Illinois are 6.5% and in Wisconsin they are 5%. 

I have registered myself in the Wisconsin DNR website, added my correct information (IL driver's license, address, etc) and the site says I can register as a non-resident.

 

Question: I am thinking I could register the boat in Wisconsin. Have you done this? Do you know of any snag I need to watch out for? 

Thank you!

Link to post
Share on other sites

Hi Glenn, no, I believe it is not. What difference would that make? Should I register it with USCG? I am not sure of why/benefits, etc :)

Thank you!

Link to post
Share on other sites

You should check with the relevant DNR's but if you are not bringing the boat into Illinois I don't believe you owe IL any tax. The 6.25% use tax gets triggered when you bring the boat to Illinois.

https://www2.illinois.gov/rev/forms/sales/Pages/rut75.aspx

Since the sale will be in WI and the boat will remain in WI, I suspect that any taxes are due in WI not IL.

under WI law https://docs.legis.wisconsin.gov/statutes/statutes/30/v/549/2/a    I'm guessing that your boat will have to be registered in WI though as a non lawyer you should treat my advice as worth every penny you paid for it.

Link to post
Share on other sites
2 minutes ago, JohnMB said:

You should check with the relevant DNR's but if you are not bringing the boat into Illinois I don't believe you owe IL any tax. The 6.25% use tax gets triggered when you bring the boat to Illinois.

https://www2.illinois.gov/rev/forms/sales/Pages/rut75.aspx

Since the sale will be in WI and the boat will remain in WI, I suspect that any taxes are due in WI not IL.

under WI law https://docs.legis.wisconsin.gov/statutes/statutes/30/v/549/2/a    I'm guessing that your boat will have to be registered in WI though as a non lawyer you should treat my advice as worth every penny you paid for it.

That's what I was thinking too. WI registration would be non-negotiable, my question was actually if I had to register in IL since I am an IL resident. You helped me think through this, thank you so much!

Link to post
Share on other sites
Just now, stayoutofthemiddle said:

Yep, IL DNR. Don't "forget" to pay your sales tax or they will hit you with a penalty! 

Thanks.
hmmm, you think I may have to pay IL sales taxes even if I paid Sales Taxes in WI?

Link to post
Share on other sites
Just now, Grande Mastere Dreade said:

where are you going to do the title transfer?   you'll pay the tax at that time..

The seller will sign the title over to me in WI. My plan was to register online in WI and I assume I pay taxes when I do that, online.

Link to post
Share on other sites
13 minutes ago, Migus said:

The seller will sign the title over to me in WI. My plan was to register online in WI and I assume I pay taxes when I do that, online.

 

image.png.ea6464c203da013bab146a3a81a850c3.png

If you are non-resident why would you not tick box 5?

Link to post
Share on other sites
5 minutes ago, JohnMB said:

 

image.png.ea6464c203da013bab146a3a81a850c3.png

If you are non-resident why would you not tick box 5?

This is not clearly written, but if I interpret it correctly, code 5 = nonresident becoming resident within 90 days AND (bringing a boat to the state or registering the boat). I am not becoming a WI resident, so that's why I think it doesn't apply to me.

Maybe I am thinking about this wrong - the sales taxes will be paid to the seller (so the seller can pay the state accordingly)? I was under the impression I would pay that separately directly to the State at the time of registration.

Link to post
Share on other sites
10 minutes ago, Migus said:

This is not clearly written, but if I interpret it correctly, code 5 = nonresident becoming resident within 90 days AND (bringing a boat to the state or registering the boat). I am not becoming a WI resident, so that's why I think it doesn't apply to me.

Maybe I am thinking about this wrong - the sales taxes will be paid to the seller (so the seller can pay the state accordingly)? I was under the impression I would pay that separately directly to the State at the time of registration.

Personally I would check, my reading would say if you become a resident in less that 90 days after registering the boat you cannot check the box.

 

Link to post
Share on other sites

 

16 minutes ago, Migus said:



Maybe I am thinking about this wrong - the sales taxes will be paid to the seller (so the seller can pay the state accordingly)? I was under the impression I would pay that separately directly to the State at the time of registration.

I have no idea how you are reading the form to get the impression that the sales taxes will be paid to the seller.

You may need to get a legal adviser to go over this for you.

Link to post
Share on other sites
28 minutes ago, JohnMB said:

 

I have no idea how you are reading the form to get the impression that the sales taxes will be paid to the seller.

You may need to get a legal adviser to go over this for you.

I misinterpreted the screenshot you shared - when I read "A 5% sales tax must be collected for all non-exempt private party sales" for some reason I thought 'collected by the seller'. If you buy from a store you pay taxes there. 

I will call the DNR and ask them :) Thank you for your input!

Link to post
Share on other sites

This is not exactly the same; I bought a boat located in Chicago as a WI resident from a broker.  I paid the broker the negotiated selling price.  I paid WI sales tax to WI DNR when registering the boat here.  And you have to pay WI registration fee whether or not the boat is federally documented.  If documented, you need to display registration stickers (only) on the transom (why you need to display 2 stickers on surface that is 5-15 feet wide-depending on size of boat- is a separate question).  If not federally registered, you affix registration stickers and state number on the bow.

I have no idea about non-residents registering boats in WI but I suspect that somewhere along the line you need to be able to prove that you paid sales tax to SOMEBODY (either IL or WI).  It might come up down the road when selling the boat.

Link to post
Share on other sites

If you do retain a legal adviser also ask him if there would be any advantage to claiming the boat is a second home in WI?? Does WI charge property tax yearly? Down here max sales tax is $300 no matter what the boat cost but we have an annual property tax based on the value. 

  • Like 1
Link to post
Share on other sites
22 minutes ago, BayRacer said:

This is not exactly the same; I bought a boat located in Chicago as a WI resident from a broker.  I paid the broker the negotiated selling price.  I paid WI sales tax to WI DNR when registering the boat here.  And you have to pay WI registration fee whether or not the boat is federally documented.  If documented, you need to display registration stickers (only) on the transom (why you need to display 2 stickers on surface that is 5-15 feet wide-depending on size of boat- is a separate question).  If not federally registered, you affix registration stickers and state number on the bow.

I have no idea about non-residents registering boats in WI but I suspect that somewhere along the line you need to be able to prove that you paid sales tax to SOMEBODY (either IL or WI).  It might come up down the road when selling the boat.

Yeah! I called WI DNR and they told me it doesn't matter where you live, if you buy the boat there and keep it there, you pay taxes there at the time you register it, online. Nothing else is needed. 

Thanks for all the comments. I learned a lot.

Link to post
Share on other sites
22 hours ago, Migus said:

I live in Illinois and am buying a boat in Wisconsin. The boat will be in Wisconsin 100% of the time (slip and winter storage).

Your question is answered in the Code of Federal Regulations....I bolded the Federal as this is a federal regulation that takes precidence over the States.  Specifically it's 33CFR - 173.

§ 173.15 Vessel number required.

(a) Except as provided in § 173.17, no person may use a vessel to which this part applies unless:

(1) It has a number issued on a certificate of number by the issuing authority in the State of principal operation; and

(2) The number is displayed as described in § 173.27.

I was a resident of Minnesota, purchased a boat in Florida, but did not pay sales tax in Minnesota or Florida.  Florida gave me 90 days from purchase to move the boat out of state which I did.  The boat was moved to Rhode Island where I paid the taxes due.....$0.00 and registered the boat in Rhode Island which is where I stored and used the boat.  

Link to post
Share on other sites

My son just did the same thing.  Lives in Illinois, bought his boat in Wisconsin.  It is titled and registered in Wi.  Paid the 5% WI Sales tax at the time of titling/registration.  Easy peasy.

To put it another way,the boat is titled/registered where it lives, not necessarily where you live.

Link to post
Share on other sites

Save your paperwork so if you decide to ever move the boat to IL, you'll be able to register without paying another round of sales tax (at least that's how it is in MI).  

Link to post
Share on other sites
4 hours ago, Cal20sailor said:

Save your paperwork so if you decide to ever move the boat to IL, you'll be able to register without paying another round of sales tax (at least that's how it is in MI).  

He will pay the difference between the WI tax rate and the ILL tax rate

Link to post
Share on other sites
30 minutes ago, jerseyguy said:

He will pay the difference between the WI tax rate and the ILL tax rate

Didn't know that, in MI, I think you just have to have used the boat in that original state for at least 6 months.

Link to post
Share on other sites
50 minutes ago, Cal20sailor said:

Didn't know that, in MI, I think you just have to have used the boat in that original state for at least 6 months.

Don’t know been too many years since I was in the business

Link to post
Share on other sites
9 minutes ago, jerseyguy said:

Don’t know been too many years since I was in the business

I paid tax to another state/country on items purchased there. Is tax still owed to Michigan?

Items brought into Michigan for storage, use or consumption may be subject to 6% Michigan Use tax. Use tax is required to be remitted by law when the purchase of a taxable item occurred out-of-state and the retailer hasn't charged sales tax in their jurisdiction. However, credit is given for any sales or use tax that is legally due and paid in another state at the time of purchase.

Michigan provides an exemption from use tax on items purchased for personal use that are purchased outside of this state and that is not an aircraft.

For non-resident of this state, this exemption applies to property brought into this state more than 90 days after the time of purchase.

For residents of this state, this exemption applies to property brought into this state more than 360 days after the time of purchase.

Link to post
Share on other sites
On 3/10/2021 at 1:56 PM, Migus said:

The seller will sign the title over to me in WI. My plan was to register online in WI and I assume I pay taxes when I do that, online.

if you are not keeping the boat in Wi why would you title it there?   you would take the signed title to I'm guessing IL. tax office and do a title transfer / registration there at which point you'll be paying whatever IL requires..  

Link to post
Share on other sites
4 minutes ago, Grande Mastere Dreade said:

if you are not keeping the boat in Wi why would you title it there?   you would take the signed title to I'm guessing IL. tax office and do a title transfer / registration there at which point you'll be paying whatever IL requires..  

From his original post:

The boat will be in Wisconsin 100% of the time (slip and winter storage). 

Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

×
×
  • Create New...