Need to clarify current taxes for a used boat, trailer and gear.

C

chiroken

Member
Finding some conflicting info online and in various threads. I'm buying a 20-21' boat (private sale) with a main OB and a kicker on a trailer. There will be other items like chartplotter/fish finder and some fishing gear like rods and downriggers. I understand that the bill of sale should breakdown the total price into 1) boat and motor(s), 2) trailer and 3) accessories. From what I am seeing, EVERYTHING is subject to 12% tax so what is the purpose of splitting up the numbers? I thought the trailer tax was only 7% so you want to assign max value for it but it seems the trailer is also taxed at 12%. Used downriggers, fishing rods as well? When is tax paid on the accessories? Dumb when I can buy 2 downriggers off of marketplace and pay no tax.

Does ICBC still collect the tax on the boat as well or do they now only collect the tax on the trailer at the time of putting on insurance?

Is this the right process:

1) Separate the value for boat/motors, trailer, accessories. When I buy the boat package I get the trailer transferred to my name at an ICBC office so I can insure it and drive everything home. ICBC charges me 12% PST on the trailer value (which is broken down on the bill of sale) at the same time as I transfer it and put insurance on it.

2) I contact Transport Canada and have the boat licence registration number transferred into my name. At some point the BC gov will track me down to pay the tax on the boat and any accessories that came with the boat? They will pre determine the value and pre determine the tax payable? If their evaluation is greater than what I paid I show proof of purchase price with my bill of sale, they recalculate the tax due, and I pay it. What are the chances they value the boat less than what I paid? I assume zero...

So the only advantage of splitting the boat cost from the trailer cost is knowing the trailer cost lets me pay less up front (just the trailer 12%) and I pay the bulk of the taxes down the road once the Feds notify the BC gov and they send me a tax bill?

I read it can take 2 years+ for the BC gov to track me down to pay the provincial tax. What do I need for documentation on the boat in the event I'm stopped by DFO? Proof of the boat now licensed/registered to me and the bill of sale? I can't obviously show the provincial tax has been paid if I'm waiting around for the tax bill to arrive in the mail.

Thanks tons, I just want to get this all right before I pay and pick up the boat.
 
you mean the luxury tax ? i would just avoid it. buy everything separate and squeak by under the limit. if its sales tax they just bill it on the expected boat value not necessarily what you pay. if you bought it for $1 they would still charge 12% on the market value of the boat.
 
You could ask the seller to break out the accessories like rods and electronics. As you say, used stuff like that attracts no tax on day to day marketplace/Craigslist sales.

Example: you agree on $33,000 all in price. Make a bill of sale showing $15K for hull, $10K for motors, $5K for trailer. Make a separate bill of sale for $3K for used accessories: downriggers, rods, life jackets etc. Pay in 2 transactions, $30K and $3K. If you prepare the paperwork yourself and avoid inconveniencing the seller, they'll likely agree. You'd save the taxes paid on accessories, $360 in my example, and still have clear proof of sale on larger items like downriggers and electronics.
 
If it was me, I would simply ask the seller to come up with a number for the boat and trailer.
Have him write up the bill of sale for that amount with the understanding you will pay for the accessories
at a predetermined price in addition.
Too much screwing around breaking everything down.
 
I'm pretty sure it's up to you to submit the paper work for the transfer of the boat and taxes. If you don't pay it and the RCMP as for the paper work there is a fine.. around $300.. alot of people don't bother paying the taxes... Which is usually thousands and risk the small chance RCMP ask you for the paper work. If you want to do you the state's, you need it though.
 
JohnS said:
I'm pretty sure it's up to you to submit the paper work for the transfer of the boat and taxes. If you don't pay it and the RCMP as for the paper work there is a fine.. around $300.. alot of people don't bother paying the taxes... Which is usually thousands and risk the small chance RCMP ask you for the paper work. If you want to do you the state's, you need it though.
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Also a pain when selling. A buddy tried this, and a family member went to buy it for his commercial fishing business and just walked away shaking his head
 
A couple things with some comments from above.
DFO is responsible for fisheries management and related regulations, including vessel registration for commercial fishing vessels. They don't check registration for pleasure craft. I have never been asked from DFO for registration papers from DFO and a DFO acquaintance confirmed the same.
Anybody can insure any boat even if they don't own it. Boat trailers are different as they are 'on the road' and done through ICBC.
Only RCMP or Coast Guard check for ownership papers on pleasure craft vessels.
 
Herring Aid said:
A couple things with some comments from above.
DFO is responsible for fisheries management and related regulations, including vessel registration for commercial fishing vessels. They don't check registration for pleasure craft. I have never been asked from DFO for registration papers from DFO and a DFO acquaintance confirmed the same.
Anybody can insure any boat even if they don't own it. Boat trailers are different as they are 'on the road' and done through ICBC.
Only RCMP or Coast Guard check for ownership papers on pleasure craft vessels.
Click to expand...
And they do joint venture all the time, the reason I bring this up is when I bought the Wellcraft from Washington , insurance companies would not insure me until I add proof of ownership registrations, bill of sale and title paper in hand was not good enough,maybe just my insurance provider was difficult
 
I just asked my insurance broker about insuring a boat I plan to buy in the US. I asked for insurance while it was in transport across the US to Vancouver. They just sell you your annual Canadian policy. They said the following;

1.0. The boats insured while being towed anywhere on a road in the US. But not while it’s in the water in the US.
2.0. The transport companies insurance is primary and my annual policy would be secondary.
3.0. They know I wouldn’t have the boat registered in Canada yet and that I would only provide the US title and bill of sale breaking down motors and hull cost separately in order to buy the insurance policy.
4.0. I didn’t get the sense they need the boat to be registered in Canada to buy the annual insurance policy at all. Although it wouldn’t surprise me that changes at some point with all the Government taxes and controls we have.
 
brutus said:
And they do joint venture all the time, the reason I bring this up is when I bought the Wellcraft from Washington , insurance companies would not insure me until I add proof of ownership registrations, bill of sale and title paper in hand was not good enough,maybe just my insurance provider was difficult
Click to expand...
You are correct that they do joint ventures but I have only ever experienced that on the fresh water systems and rivers. To be clear, I will always say play by the rules and you have nothing to worry about.
Yes you are correct that when importing boats from the USA you will need taxes paid, and ownership transferred with Transport Canada along with the bill of sale to insure it in Canada. I have imported 3 boats from Washington over the last 15 years. That has been my experience.
 
Herring Aid said:
You are correct that they do joint ventures but I have only ever experienced that on the fresh water systems and rivers. To be clear, I will always say play by the rules and you have nothing to worry about.
Yes you are correct that when importing boats from the USA you will need taxes paid, and ownership transferred with Transport Canada along with the bill of sale to insure it in Canada. I have imported 3 boats from Washington over the last 15 years. That has been my experience.
Click to expand...
I'm not playing by the rules when the rules are ********.. why should I pay the government 8k to buy my neighbors boat.
 
JohnS said:
I'm not playing by the rules when the rules are ********.. why should I pay the government 8k to buy my neighbors boat.
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I totally agree that the rules suck. Taxes on already taxed items is criminal IMO. I know of people who don't pay the taxes on used boats and just say that they will deal with it when it comes up or if they get stopped. Just have a copy of the 'previous' owners bill of sale and matching Transport Canada papers on board for when you do get stopped. You are just using your neighbors boat right? It's up to you how you want to do it I suppose. But I still recommend following the law. Good Luck!
 
JohnS said:
I'm not playing by the rules when the rules are ********.. why should I pay the government 8k to buy my neighbors boat.
Click to expand...
lol why do I pay 50% income tax ???, hey you do what floats your boat, I know if I need an insurance claim my s…. Is in order, do I think that paying tax on used good is gestapo, god dam right i do, i just paid 10k in tax on a used truck
 
brutus said:
lol why do I pay 50% income tax ???, hey you do what floats your boat, I know if I need an insurance claim my s…. Is in order, do I think that paying tax on used good is gestapo, god dam right i do, i just paid 10k in tax on a used truck
Click to expand...
and if you take real good care of that truck and pay taxes on that maintenance, hopefully the next owner will pay 10k in taxes on it too.
so sad...
 
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