I don't have a boat yet, but definitely hope to in the next few years. Along with routine expenses of ownership, I am interested in the tax aspect. I don't have a complete understanding, but I realize that there is a wide variance in East Coast states on sales tax at purchase time, and also annual "personal property tax". I think that a boat (or RV) that is stored or at a marina in Prince William County, VA is not subject to personal property tax. For cruising and spending significant time in ports other than your home port, there are other possible tax consequences, as explained at the end of this online article Avoid Blunders that Can Cost you Money. See "The Taxman Cometh" portion of the article.
Please consider sharing information about the tax burdens of boat ownership where you bought and dock/store your boat.
The information to share would include the percentage used to calculate the tax, if there is any maximum or minimum tax, the location of your boat, if you have been taxed for having your boat in another state for a certain period of time, etc.
You generally have taxes at purchase to include sales tax, title transfer and registration. After the purchase the only taxes are your documentation/registration and use fees...all of which are minor. The exception would be personal property if the boat is registered in one of those weird Virginia counties that do that, which can be solved by documenting/using it in another location.
If you are trying to use a boat as a tax write-off as a second home, you need to make sure it has both a functioning head and functioning galley. The rules around using a boat as a business are outside of my experience, but people do make that work somehow.
From your post, it sounded like you are considering at a cruising sailboat. I believe that PW county may not have personal property tax on boats but I am not aware of many locations in PW county that can accomodate the draft and/or mast clearance of a cruising sailboat. We once considered Fairfax Yacht Club but you will likely be subject to annual personal property taxes. Lastly, there are limited cruising destinations in the northern Potomac.
I'm a PW resident and boats don't incur any personal property tax for PW county. Here is the documentation on that.
Thanks for the replies, I appreciate any information and not just limited to my current location. Since I recently retired, I am looking at all options, including possibly moving to another state in consideration of taxes and weather, etc.
In your experience, is either tax at purchase time or recurring personal property tax based on the address of the registered owner or the location where the boat is primarily located?
I understand that any responses are not to be taken as professional tax or legal advice.
We bought our boat in Maryland, so the sale was subject to Maryland taxes. In addition to that, we paid title/decal fees for the boat to be titled in Maryland. Depending on the state you reside in, its likely that you may have to pay some type of tax if you plan to title a boat in your home state. I would definitely recommend talking to a tax professional regarding this matter and include taxes in your cost estimates.
Although the cost of state registration is relatively small, a mistake some Virginia residents make is registering their boat in VA when they plan to sail primarily (or exclusively) on the Potomac. The MD/VA border runs along the VA shoreline, hence the Potomac River is navigable waters of MD--so if that is where the boat will primarily be operated, MD registration is required. If it is a trailerable boat stored in your backyard in VA, this can mean that the trailer is registered in VA, but the boat is registered in MD. Weird, but that's how it works. So unless you plan to sail primarily on lakes and inland VA waterways, you might need to register the boat in MD.