"Courtesy" Trade?

[basshole51]

I have entered into a verbal agreement to buy a boat for $33,000.00

The seller wants to do a "courtesy trade" as he wants to buy a new boat from a dealership and save on taxes....the boat I am planning on buying and the boat seller wants to buy are both located in Louisiana. I am located in Wisconsin.


I will be taking out a loan of about 50% of purchase price for the boat and was planning to write a cashiers check to sellers bank/himself (as he still has a loan on the boat) at which point his bank and himself would release titles and boat to me.

I am not familiar with a Courtesy trade but how would this process change/ would it negatively affect me?


When I get boat home to WI I need to register and pay 5.5% sales tax...through a courtesy trade would there be more fees?

I just want to make sure I am headed home with clear titles for boat, motor, trailer.

Thanks!

[Mark Perry]

Sounds like an "in and out".....pretty painless this way as dealership handles all paperwork. You will end up paying the same as long as they are not adding a documentation fee etc. Buying from out of state it could possibly make things easier on you provided they are a good, reputable dealer.

[PsuHntr]

sounds suspicious to me....

[Bullet 250]

Never heard of a Courtesy trade, but in Arkansas and Oklahoma there is no tax on a used boat purchase if you buy it from an individual, may just be what he calls it, probably just trying to get the tax credit, no problems with that

[dean c]

They do that all the time around here. Pretty sure it benefits the buyer..since you only pay sales tax on the difference of purchase price minus trade.

rereading your post..I realize he wants to show your boat (from him) as a trade. Only benefits him and be careful because now your buying from that dealership and not the individual. It could go smooth but also If you have an issue he could tell you to pound sand..and the dealership might as well.

[Quillback]

I'd call the guy and ask him what a "courtesy trade" is.

[bronze_back_hunter]

It will save him on taxes and make paperwork and title work easier on you.

[janky]

It is not a big deal. He will get the benefit of only paying sales taxes on the difference between the new boat price and price he is selling to you.

In LA if you buy a used boat from a dealer you have to pay sales tax, if you buy from an individual you do not. Not sure if this would impact you.

[Locknload59]

I did this when I bought my boat used in Kentucky and I am from IL. It actually made me feel more secure because all my documentation came from the dealer.

I had to pay IL sales tax when I registered the boat. I did not pay any tax to Kentucky.

Not sure if this is everywhere but the dealer actually had the titles transferred to them and they reissued them to me. It was about a 3 week process to get my titles.

[T Dub]

I'd call the guy and ask him what a "courtesy trade" is.

[basshole51]

He said it will cost me "nothing more" ...I just want to make sure since I will be technically buying it form the dealer that I will not have to pay LA sales tax on the boat...then have to pay WI sales tax on the boat when I register it in WI.

The dealer would be Town & Country Marine in Trout, LA I believe

I also want to make sure that the dealer doesn't have to hold the titles and I will have titles in hand before a long drive home.

I know this will not benefit me in anyway but it would save him on sales tax and is 100% legal to my knowledge

[barbarian]

Common on vehicles. He saves tax value of boat your buying since it's considered a trade in now. You are technically buying from dealer now so you'll have to confirm who to pay, but should have more peace that'll be done correct. Tax isn't collected by dealers for out of state buyers so it shouldn't affect you. Paperwork may be delayed a bit just because you won't be dealing with it directly - dealership will. I would call dealership and ask them details.


Almost zero chance you leave with titles since the bank has them. And you should confirm, but the dealer definitely should not collect sales tax from you.

[Mark Perry]

He said it will cost me "nothing more" ...I just want to make sure since I will be technically buying it form the dealer that I will not have to pay LA sales tax on the boat...then have to pay WI sales tax on the boat when I register it in WI.

The dealer would be Town & Country Marine in Trout, LA I believe

I also want to make sure that the dealer doesn't have to hold the titles and I will have titles in hand before a long drive home.

I know this will not benefit me in anyway but it would save him on sales tax and is 100% legal to my knowledge

Check for any documentation fees as well.

[janky]

I don't know about leaving with titles in hand since you are financing part of the boat. Technically, the bank would hold the title until paid off. It is not a shady deal at all.

[Locknload59]

He said it will cost me "nothing more" ...I just want to make sure since I will be technically buying it form the dealer that I will not have to pay LA sales tax on the boat...then have to pay WI sales tax on the boat when I register it in WI.

The dealer would be Town & Country Marine in Trout, LA I believe

I also want to make sure that the dealer doesn't have to hold the titles and I will have titles in hand before a long drive home.

I know this will not benefit me in anyway but it would save him on sales tax and is 100% legal to my knowledge

It is 100% legal and you should not pay tax until you register it with your home state. I did not get my titles in hand because the dealership had to send them off to the state of Kentucky to make them the legal owners. Once they received them back from the state they signed off and sent them to me. I sent you a PM explaining how my transaction was handled.

[janky]

I would call the dealer and asking about the payment of taxes. You should only pay WI taxes. My only question is does the dealer collect them and submit them to WI or do you just pay them all once you register the boat. I bought a truck in TX and paid taxes at the dealership. Then when I registered the truck I had to pay a bit more because they did not use the correct parish tax rate. This may not be how it works for boats, but I would hate for you to drive down and not be prepared to pay taxes if that is how it is done.

Now, with that said......whatcha gettin?

[west_tn]

I would use it as a bargaining tool for yourself. Tell him you will gladly do it if he will knock a little more off of the price. I mean by doing it you are saving him roughly $3000 in taxes he no longer will have to pay. Tell him to knock $500 to a grand off.

[gambler4]

Never heard of a Courtesy trade, but in Arkansas and Oklahoma there is no tax on a used boat purchase if you buy it from an individual, may just be what he calls it, probably just trying to get the tax credit, no problems with that

What? I bet there are a lot of Okies running around trying to get there excise tax back from the tax commission when you say stuff like that. You pay an excise tax when you transfer the title plus your boat and a separate tag for the motor. After that you buy the tags yearly. A used boat is 3 or 3-1/2 percent tax a new boat is slightly higher I believe

[squib]

Sounds like an "in and out".....pretty painless this way as dealership handles all paperwork. You will end up paying the same as long as they are not adding a documentation fee etc. Buying from out of state it could possibly make things easier on you provided they are a good, reputable dealer.

I agree with all of this. Might make your life much easier.

[Garage Dog]

I'd call the guy and ask him what he is trying to pull.

^^^^^FIFY^^^^^