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  1. #1
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    Need help with sales tax on used boat purchased in Illinois, to be registered in MS.

    My wife and I are looking at a used boat, currently in Illinois.
    it is a privately owned boat, being sold through a broker.
    The broker is saying he has to collect 7.25% sales tax, but I had always been told that a used boat purchased and titled in MS is not taxed. Does the broker in the deal change this?

    Want to be sure I get this right, before I sign papers.

    Thanks!

  2. Member
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    #2
    I would think you pay MS tax if there is sales tax when you register it.
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  3. Member Jason Hale's Avatar
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    #3
    From my years in the boat business you always paid taxes in the state of residence and/or registration

  4. Member
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    #4
    I’ve bought more used boats than I care to count or admit and my guess is at least 1/2 were from out of state. I’ve bought them from individuals, dealers, and a bank - I’ve never paid sales tax until I got back to my state and paid them directly. No way I’d trust them to pay it for you. IMO, you’ll end up paying it twice.

  5. Member
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    #5
    Ask him to show you the law. If it’s legitimate it should be very easy to prove. Typically state sales taxes are collected where the boat is registered as long as you have a residence there.

  6. Member
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    #6
    Quote Originally Posted by Jason Hale View Post
    From my years in the boat business you always paid taxes in the state of residence and/or registration
    I agree, if you buy from dealer or individual you pay taxes in your home state.

  7. Member
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    #7
    If it's true you don't pay sales tax in MS, It looks like to me the broker is trying to scam sales tax from you.

  8. Roachboat
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    #8
    No sales tax on a used boat in MS. I've also had them delv. across state line

  9. Member
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    #9
    Depends on sourcing rules. For instance in AR you pay sales tax to the dealer, if the dealer took the boat in on trade then he would collect full tax on the new boat he sold so no tax is due on the trade in once its sold because we give no trade in tax credit. Now if a dealer goes and buys a used boat himself whether it be through auction or he drives by a house and sees one for sale in a yard and buys it, when he sells it through his business its taxable. Your guy being a "broker" is probably buying the boat from the individual once you commit to the purchase then taking your money to cover his expense and pocketing the rest. In Arkansas that would be a taxable sale if he held a boat dealer license and like I said you pay tax to the dealer here and there is no "drive out" exemption meaning even if you dont live here and the boat never sees Arkansas waters you still pay tax to the dealer. But that's Arkansas I have no clue of Illinois laws.

  10. Member
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    #10
    I bought my boat from a dealer that got it from Auction in Texas back in 2010. I did not have to pay any sales tax at time of purchase because it came from out of state. But when registering the boat and tag I had to show where I paid the state sales tax, or they collected at the time of registration and tag purchase. For the tag they only wanted to show tax on the trailer purchase, not the boat. The boat would only be taxed if I got a title for it. If I had of bought it from an individual and not through a business then there is no tax.

    Also, the sales tax, if you were to pay it, is 7%.

    The broker, if he is in the state of MS, acts like a business that is selling you the boat himself. He has to collect sales tax. I bet that .25% extra tax is his fee for paperwork and such.

  11. Ya, I Live on Rainy Lake! basscla's Avatar
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    #11
    It's IL, run away.

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  13. Member
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    #13
    Quote Originally Posted by basscla View Post
    It's IL, run away.

    X2. They are going to screw you any chance the get!!!!
    I'm not dead yet.....competition is the life blood of any human being

  14. Electrical/Wiring/Trolling Motors Moderator CatFan's Avatar
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    #14
    It's normal for a dealer to collect sales tax at time of sale, and usually required by law. A commercial seller is required to remit sales tax on all sales unless there is a tax exemption of some kind.

    You'd generally be credited with the tax paid when you go to register the boat in your home state. If the state where you bought it has a lower rate than your home state, you'll have to pay the difference. If the state where you bought it has a higher rate, you are just out the extra.
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  15. Member
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    #15
    Quote Originally Posted by wildturkey View Post
    I would think you pay MS tax if there is sales tax when you register it.
    Id try to get out of it, but your state will subtract what you paid . Call the license branch.
    In ILL that could be a chunk of change compared to your state