Tax Information for LIS Boaters

If you do any boating in NY state waters, there are some important developments in how the state is collecting taxes that could effect you, no matter where your boat is registered.

It is very common for residents of New Jersey and Connecticut to keep their boats in New York, and in this situation owners are expected to report to the NY state DMV and pay the difference between the sales tax they already paid (in, say, Connecticut) and what the sales tax would be in New York. In practice, very few owners did this or were even aware that this was required, and the state made little effort to chase down the extra revenue.

But the massive revenue shortfalls have motivated a crackdown, and the state has begun auditing marinas, yacht clubs and even boatyards. If they find a boat that hasn't paid sales tax in NY state, the owner receives a bill that includes interest and penalties. It's doubtful that they will catch everyone this way, but if they catch you it will be an unwelcome surprise. **Note that owners who have responded proactively to this bill have, in some cases, been able to negotiate down some of the penalties.

Stay tuned for an update on Governor Paterson's additional 5% "luxury tax" on yachts over $200,000.