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Sales Tax Question

Old 02-06-2020, 08:37 PM
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If I am a resident of NC, but buy a new boat from a dealer in SC, what sales tax to I pay?

NC has a max sales tax of $1500 on a new boat, and SC appears to have a max tax of $500.

How does that work?

Thanks!
Old 02-07-2020, 05:24 AM
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Not certain in SC and NC, but I bought a boat in Maryland and lived in New York State, no sales tax was levied at the time of and in the state of the purchase, but had to pay the tax on the purchase in NY State. In the case of Maryland, tax is levied when the vessel is registered, and since I did not register the vessel in Maryland no sales tax was paid. When I registered the vessel in NY State I paid the sales tax fee to New York.

Twenty-five years ago I bought a boat in New Jersey and tax was levied on the sale in NJ, but the sales tax at the time was less than New York’s 8%, but when I registered the boat in New York State I had to pay the difference between the lower New Jersey sales tax and the New York sales tax.

If you are buying from a dealer they will know how to handle the sale and the tax situation. If you are buying from a private individual you should check by calling your state DMV office or tax authority.
Old 02-07-2020, 05:33 AM
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You pay NC tax when you register the boat.
Old 02-07-2020, 05:37 AM
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Correct. The SC dealer should not collect tax if the boat will be kept in NC.
Old 02-07-2020, 05:39 AM
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SC dealer should not charge tax, but probably will by default. Make sure they know up front that you are immediately taking it out of state.
Old 02-07-2020, 05:57 AM
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Thanks for the replies, gentlemen. They would be delivering it to me in NC, so they certainly are aware of that arrangement. (Not purchasing trailer).
Old 02-07-2020, 08:44 PM
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Here is the link about USE TAX on boats in NC:

https://www.ncwildlife.org/Portals/0...-03-155816-817

I just bought a new boat in SC last November and registered it in NC. They will not collect the Use tax when you register the boat with NC Wildlife and apply for your title. You will need to pay your tax directly to the NC Department of Revenue. Use Form E-555, Boat and Aircraft Return, which is available on the web or through the Department. The return and payment of the tax due should be submitted by the end of the month in which the purchase was made to the North Carolina Department of Revenue.

If you fail to pay the tax, about 2 years from now you will get a bill from the NC Dept of Revenue for the tax plus all kind of late listing fees plus interest. Why it takes them that long to contact you, I have no idea, but they sure do get to collect a whole lot more money. I know this from personal experience.
Old 02-09-2020, 05:21 PM
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Originally Posted by Holy Smoke View Post
You pay NC tax when you register the boat.

Yep. Dealer will list it as out of state sale. No SC sales tax
Old 02-19-2020, 05:38 PM
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If you purchase a boat from a dealer in South Carolina and take delivery of the boat on South Carolina soil YOU DO have to pay the SC Sales Tax on the boat & motor which is capped out at $500 once that cap is reached along with the local county sales tax rate on the trailer if you are purchasing one. If the dealer is delivering the boat to you out of the State of South Carolina you do not have to pay SC Sales Tax.

If you're taking care of your own registration and titling for the boat & trailer and the dealer gives you the paperwork the South Carolina sales tax you pay (If you take possession of the boat in SC) on the boat & motor is credited to you in North Carolina. You will have to fill out and send the NC E555 Form along with the Bill of Sale or Perchase Agreement and a check or money order for the remaining taxes due (if any) to the NC DOR using the address listed at the bottom of the E-555 Form. If you look at the NC E555 Form that I have attached to this reply you will see that on line "4" the sales tax paid in SC for the boat and motor is credited to you in NC. These taxes are not collected on registration by the Wildlife Office or any Wildlife Agent at time of registration, and it is up to YOU to file the NC E-555 Form on your own and send in the money to the NC DOR.

Hearing horror stories from previous customers over the years that purchased boats out of state from individuals and other dealers the State of NC seems be pretty behind on how they match up boat registrations and the NC E555 Tax Forms. The NC DOR will find out if you don't file the E-555 Form, and will charge penalties and interest to the amount you owed. To prevent any issues with the State of NC, and the NC DOR if we have a NC customer that wants us to handle their boat & trailer registrations, and NC E555 paperwork for their new boat purchase I am more than happy to collect whatever fees are due and remit it to NC on their behalf. No one likes a surprise tax bill with penalties and interest calculated in years later...
Old 02-19-2020, 05:48 PM
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It wouldn't let me post a picture of or link the NC E555 Form since I'm under 10 post, but if you google "NC E555 Tax Form" It'll pop right up. Hopefully this helps!
Old 02-19-2020, 05:56 PM
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Originally Posted by PalmettoBoatCenter View Post
If you purchase a boat from a dealer in South Carolina and take delivery of the boat on South Carolina soil YOU DO have to pay the SC Sales Tax on the boat & motor which is capped out at $500 once that cap is reached along with the local county sales tax rate on the trailer if you are purchasing one. If the dealer is delivering the boat to you out of the State of South Carolina you do not have to pay SC Sales Tax.

If you're taking care of your own registration and titling for the boat & trailer and the dealer gives you the paperwork the South Carolina sales tax you pay (If you take possession of the boat in SC) on the boat & motor is credited to you in North Carolina. You will have to fill out and send the NC E555 Form along with the Bill of Sale or Perchase Agreement and a check or money order for the remaining taxes due (if any) to the NC DOR using the address listed at the bottom of the E-555 Form. If you look at the NC E555 Form that I have attached to this reply you will see that on line "4" the sales tax paid in SC for the boat and motor is credited to you in NC. These taxes are not collected on registration by the Wildlife Office or any Wildlife Agent at time of registration, and it is up to YOU to file the NC E-555 Form on your own and send in the money to the NC DOR.

Hearing horror stories from previous customers over the years that purchased boats out of state from individuals and other dealers the State of NC seems be pretty behind on how they match up boat registrations and the NC E555 Tax Forms. The NC DOR will find out if you didn't file the E-555 Form, and will charge penalties and interest to the amount you owed. To prevent any issues with the State of NC, and the NC DOR if we have a NC customer that wants us to handle their boat & trailer registrations, and NC E555 paperwork for their new boat purchase I am more than happy to collect whatever fees are due and remit it to NC on their behalf. No one likes a surprise tax bill with penalties and interest calculated in years later...
I agree with everything you said, except in my case the dealer didn't collect any SC tax (see my post #7 above). When I bought my new boat in Charleston last Nov, I made two trips to the dealer. First trip to look and buy, second trip to take delivery.
Old 02-20-2020, 07:29 AM
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Originally Posted by TOO MUCH STUFF View Post
I agree with everything you said, except in my case the dealer didn't collect any SC tax (see my post #7 above). When I bought my new boat in Charleston last Nov, I made two trips to the dealer. First trip to look and buy, second trip to take delivery.
That dealer should have collected SC Sales Tax if you took possession of the boat in SC. Either way your amount of tax collected for the boat and motor would have been the same in NC if you capped out at the $1,500 max tax. You paid $1,500 in taxes on the boat and motor when you got back to NC and filed your E555 Form. If the SC Dealer would have collected the SC Sales Tax you still would have paid $1,500 in taxes total on the boat and motor when you filed the NC E555 form. $500 would have been collected at the dealership for SC Tax on the boat and motor, and when you got back to NC and filed the E555 Form you would have sent the NC DOR a copy of the Bill of Sale showing the $500 SC Taxes Paid, and a check for the remaining $1,000 taxes due. Same amount regardless.

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