Boat registration

[rob v]

I just bought a used boat, motor and trailer as a package privately. I know what I'm supposed to do now. 1) take my bill of sale for the whole purchase price (boat, motor and trailer) to the ministry of transportation office and pay PST on the whole thing. 2) transfer the registration of the boat with transport Canada from the former owner to me. Eventually they'll ask me to prove that I've paid the sales tax on the boat.

 

My question, the boat and trailer make up about half the value of the package and the motor the other half. Would I be smart to draw up two bills of sale ... 1 for the boat and trailer and the other for the motor ? Then take the boat and trailer registration to the licencing office and pay tax on that portion. It's the portion transport Canada is going to ask me to prove that I've paid sales tax on as far as I know. As far as the motor goes - I might just forget to pay sales tax on it. When I called the licence office and told them I was going to buy a boat and trailer and then the motor seperately at a later date (privately) I was told that I would pay the tax on the boat and trailer when I transferred the trailer registration to me and I would have to call the tax department and volunteer to pay the tax on the motor when I bought it. Like someone would do that ???

 

Anyone have any input on this issue ? What risks would I be taking ? I think it's ridiculous to have to pay sales tax on this - they've already collected it once and I'm not in the business of buying and selling boats - or anything else for that matter.

 

I'd appreciate anyone else's experience and/or input on the matter.

 

Thanks. Rob V

[ccmtcanada]

I didn't have to pay any tax on the boat and motor...just the trailer for the registration/plates to the MTO. I also didn't have to pay to transfer the registration number through the government.

[Gerritt]

Yes you can skirt the system.... but the system bites back... People have gotten letters YEARS later....

 

Do the right thing pay the tax and sleep well at night.

 

G

[rob v]

I hear you about sleeping better, and my intention is to pay the tax on the trailer and the boat. When I get my confirmation request from Transport Canada (you"re right there is no cost to register the boat into my name .... but they then follow up later ... somtimes years later to ensure you paid the sales tax on the boatl) I'll have the tax certificate showing I paid tax on the boat.

 

How big a risk am I taking by not paying the tax on the motor ?

[Gerritt]

Not sure to be honest Rob.... but if they contact the seller? which they can based upon your receipts... and the info you gave Transport Canada.... not sure how much cash we are talking about here.... the safe thing to do is be straight forward and pay what is due to them.. I know we all like to save a buck... but this could bite you in the butt later..

 

G

[rob v]

Not paying tax on the motor would save me about $500. I could think of a lot better places to use that money ! Anyways, I know what you're saying Gerritt. Just a tough pill to swallow.

[Gerritt]

hell for 500.00 I will burn their records for you!

 

Good luck!

 

G

[lookinforwalleye]

Well I am not sure but if you only pay tax on half the purchase price and if there is a legal issue in the future I think you can only sue for the amount you paid tax on.

[POLLIWOGG]

Take the motor off the boat and buy it separate, as far as I know there is no tax on the private sale of a used motor, is there?

[irishfield]

Would I be smart to draw up two bills of sale

 

No you wouldn't. You should have had the guy you bought it from write a bill for each item seperate...if not too late call him up and ask him to do exactly that and there's no fraud involved and you'll both be on the same page.

 

Fine for false declaration to the MOF is the balance of the tax you should have paid.. on top of the tax you paid.. PLUS the entire tax on the true value. Ie you pay the full amount twice.

 

I have the bills to prove it from when I used a second bill for the 'vette I bought Leah for our Tenth Anniversary. Guy wrote me the 2nd bill.. but of course the MOF got his wife when they called to ask how much it sold for.

Edited April 2, 2008 by irishfield

[rob v]

When I asked should I have two bill of sales written up, I meant one for the boat and trailer and the other for the motor (adding up to the total purchase price). That way I could take the one for the boat and trailer & pay my tax. The second bill of sale would be for the motor - and I could conveniently play stupid and claim I didn't know I had to pay tax on the motor ( in my original post I mention that the MOT office told me if I bought the motor seperate I was "supposed" to contact the "tax office" directly to arrange to pay the tax on the motor ... I couldn't do it through them !)

[irishfield]

Notice I said MOF.. not MOT. Ministry of Finance/Oshawa. Go back to the guy and get a bill of sale for the trailer.. minimal $250. Get a bill of sale for the boat.. as minimal as would be believed for make model and a bill of sale for the motor..for the balance. You pay tax at the licence bureau for the trailer on it's value and it's value alone. They have NOTHING to do with boats. When the boat is registered Transport Canada/Services Canada is mandated to hand over new registrations on a month end basis to the applicable provinces tax office. One day in the mail you may get a "please show where you paid tax" on the boat that you just registered. You may never get this letter.. but you might as well...it's a crap shoot. You mail them 8% on the boat bill. The motor.. NEVER.

 

This is all provide you bought this from a private citizen and not a dealer. If you bought it from a dealer he should have taken care of all taxes.

[HTHM]

Render unto Ceaser what is due.

[Big Cliff]

So, I assume you are going to insure this package so what happens down the road if it gets stolen or damaged and the insurance company wants to see copies or receipts or anything to prove what you paid for it? Personally I'd do it right and never have to worry about it again but that's just me.

[pikehunter]

Yep like Wayne said. Get 2 receipts from the seller, one for the trailer, one for the boat and motor as a package.

 

Go back to the guy and get a bill of sale for the trailer.. minimal $250. Get a bill of sale for the boat.. as minimal as would be believed for make model and a bill of sale for the motor..for the balance. You pay tax at the licence bureau for the trailer on it's value and it's value alone. They have NOTHING to do with boats. When the boat is registered Transport Canada/Services Canada is mandated to hand over new registrations on a month end basis to the applicable provinces tax office.

 

I am assuming that the motor is 10 hp or greater because you are willing to register it. If 9.9 or less don't register it and pay no tax! You don't register boats with smaller hp rated motors.

[aplumma]

If you decide to try to make the motor appear as a second item or purchase make sure that it is the guy who sold you the boat that writes out 2 bills of sale. If you do it even though you are not changing the amount then you are committing fraud. That will give them the chance to get the taxes and prosecute you in the court of law. while $500 dollars seems alot now if you have to go to court and defend your self it will be a bargain. I also think that if I were the seller and I was contacted by the officials I would fess up to the 2 receipts right away to keep my butt from getting into trouble for someone he doesnt know beyond the sale. ( called throwing your butt under the bus)

 

Art

[charlesn]

There is no tax on a used motor private sale from what I understand. There is no registration or licensing for the motor either (although you probably need to inform the manufacturer if there is any warranty left for a warranty registration transfer). You get the trailer registered and plated and the boat needs a small vessel license but the motor does not have any registration requirements on it.

 

Do not lose any sleep over this. You're not doing anything wrong or cheating the gov't out of anything. If you are unsure, the best thing to do is look up their number and ask. Getting separate bills is a good idea, I'm sure the seller will work with you for that.

 

Why pay more tax than you need to? $500 buys a lot of gadgets and baits for the boat.

 

Charles

[brickNblock]

Gary, Im in the same position as you at the moment and deff., cannot afford to have RevCan anywhere near me for any sort of fraud.

I registered and plated my trailer..(taxes on $2500)

Thats it so far.......

From what Ive been told by my seller:

Have the boat registration transferred to my name..NO COST.

This is all I understood to take place...

If taxes are to be paid on the boat then...I'll make them at the (1bill of saLE)..purchase price...when asked for it.

Anything happens that requires insurance involvement I wil make sure I get the full coverage Im paying for.

I like where I am with this..Paid $15k..Insured @ replacement $58k

Want to have all my ducks in a row for this...and therefore..

ALL TAXES PAID.

[Blue_Axela]

Wow, you paid 8% of $2500 on a boat trailer in taxes? Thats a pretty expensive and nice trailer. I think you could have had the trailer at $500 to $1000 and it would have worked out.

 

When the boat is transferred to your name, that is when you are "recorded" as purchasing the boat. Eventually they will send you a tax receipt asking you to pay taxes on the boat.

 

There is a lot of confusion on what the "boat" means. Like many have said here, there is no taxes on the outboard if you are buying used. So when I say the "boat", it means the actual watercraft and not the outboard or trailer.

 

I am picking up my new/used boat this weekend and plan to have the seller break down the sale to: Trailer, Motor and Boat.

 

I will be paying taxes on the Trailer when its plated and on the Boat. I will not be paying taxes on the motor sicne there is no tax on used outboards.

[rob v]

Some interesting opinions here. I've called the local MOT office, and I've called the retail tax office. The MOT people told me they collect tax on the whole thing i.e. boat, motor and trailer if it's purchased as a package. When I asked the MOT if i buy the motor seperate from the boat and trailer they told me I'm supposed to contact the retail sales tax office and arrange to pay tax there.

 

When I contacted the retail sales tax office they told me I'm supposed to pay tax on the boat, trailer AND the motor. They referred me to their website and while I had the person on the phone we read through the definition of what needs to have tax paid on it... it read trailer and boat. Never said anything about motor. After consulting with someone on the her end of the phone she came back to me and said "their" interpretation of boat was that it included the motor - even if it was an outboard.

 

Obviously it's not a question/issue they deal with often, in other words my guess is not many people bother paying tax on their used, privately purchased out boards. I don't think I will either. I,ll print that page of their website off that says boat - and "my" interpretation will be boat doesn't mean motor.

 

Two seperate bills of sale will be drawn up between myself and the seller ... one for the boat and motor that I'll be generous enough to pay McGinty's tax on the boat and trailer, the other will be for the motor that as far as I'm concerned doesn't need to have the tax paid.

[rob v]

Some of you may find this publication interesting - # 207 - in the Retail Sales Tax guide.

 

www.rev.gov.on.ca/english/guides/rst/pdf/207.pdf

Edited April 2, 2008 by Rob V

[camillj]

I hear you about sleeping better, and my intention is to pay the tax on the trailer and the boat. When I get my confirmation request from Transport Canada (you"re right there is no cost to register the boat into my name .... but they then follow up later ... somtimes years later to ensure you paid the sales tax on the boatl) I'll have the tax certificate showing I paid tax on the boat.

 

How big a risk am I taking by not paying the tax on the motor ?

Or years from now .. when you run for Prime Minister .. you'll have to explain to your kids why you thought it was ok to cheat ... while they drag your name through the mud ... just pay the piper ... then you'll be able to play all high and mighty like I do

[camillj]

Ya know .... 'the right thing' ... is what decent folks do ... even when they believe nobody will find out.

[smally21]

well put camillj, I'm not sure why we're so helpful giving advice on skirting taxation, you got your answer from the govt now pay the man. nobody likes paying taz and it never seems fair. good on you if you dont think you have to pay it just no more complaining bout bad roads and crowded class rooms and hospital wait times.....

[Fish Farmer]

So, I assume you are going to insure this package so what happens down the road if it gets stolen or damaged and the insurance company wants to see copies or receipts or anything to prove what you paid for it? Personally I'd do it right and never have to worry about it again but that's just me.

 

Big Cliff has it right.

Believe me because I got caught and it wasn't nice. The MOT and Canada customs aren't stupid, They've heard it all and know all. At one time the two weren't linked together, but now they closed the door on the tax dodgers. A friend told me that just pay the tax on the trailer and that was it, so I did . WRONG! A few years later I received a letter They had contacted the seller and asked him if he sold his boat package and asked how much he sold it for . If you want to save a little on the tax, do the bill & story straight thing and your the bills better jive.

But remember think about what Big Cliff said. Don't forget you have the bill and what you paid the tax on. The loops are smaller

Good luck on your saving, I like to save a few bucks like the next guy, but be carefull.