Thursday, December 17, 2015

Darn legalities

I was down at a Department of Motor Vehicles office yesterday getting a license plate for my new trailer, which went smoothly - yay.

On the spur of the moment, I asked the clerk about licensing requirements for homemade boats.   The answer was unpleasant - the state expects you to present receipts for all materials used to build the boat, so that they can verify that you paid state sales tax (which is what we have in Washington state anyway - hey it beats an income tax!) on everything.   Lacking receipts, you must declare a fair market value for the boat, and the state immediately makes you pay the full sales tax rate for that amount before you can get your hull identification #.    Furthermore, you do not get a real title until three years after that point.   I suspect the implication of that policy is that you can use but not sell the boat - not that I am intending to! :) - until that three year period is expired.   

A long time ago, I remember saying something about how I didn't want to be tied down in the financial details while building this boat - i.e., the "plan" was to just get what I needed when I needed it, and not get lost in budgeting details.   (Also, this may have been motivated by a subconscious fear of just how much money I was going to spend in total...)  I am now kicking myself for that attitude, because it's going to cost me a significant amount of money depending on what fair market value I eventually declare.   Worse, I just hate the idea of the state double-dipping into me on taxes!

May be it won't be so bad though - this is a real crappy boat I've built here, really no more valuable than some old wooden rowboat if we're all being honest with each other, right?   ;-)

Joking aside, I'd urge other home boat builders to look into the licensing requirements for their state at an early stage, ideally before you even start building.


Dart18 said...

Then why license the boat?
Here, if under 10hp the boat doesn't require a license. And if you sell the boat the new owner pays sales tax on "FMV" if he wants to license it.
Trailer is different, its considered a vehicle and he must pay sales tax to get the plate.

Jay said...

Unfortunately after looking into the relevant state laws, my boat is not exempt from the licensing requirement. The two basic exemption classes are for 1) strictly human-powered vessels (canoes, kayaks, etc), and 2) under 16 feet AND under 10hp. My boat will be under 10hp but at 22' doesn't meet the length requirement. Darn - but thanks for your suggestion, it got me really excited for awhile. :-)

Dart18 said...

Oh too bad. I looked and here it doesn't mention length in the 10 horse rule.
Explains why some of the 18 foot catamarans that come up from the States have numbers stuck on them and no motor.
You have a nice boat.

Dave Harman said...

Up here in Canada I had to have a signed Declaration from a notary public stating that the boat was a home build and the
taxes were payed on materials as it was built. No additional taxes were payed to license my F-32AX.
Maybe you can do something similar in your State.