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TAX ON BOATS


FishOn

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Hi all. I got my Ministry of Finance Ontario letter today. Asking me to provide a copy of the bill of sale showing purchase price and remit a cheque or money order. Calculating tax on the full purchase price (tax rate of 13%).

 

I have no problem paying my tax. The boat package was $13,000 including Boat, Motor and Trailer. I paid my tax on the trailer that was valued at $1,000 at the time of transferring the ownership at the MTO.

 

My question is;

 

Do I have to pay tax on the motor, or just the boat? They are asking me whats the purchase price of the Boat/Watercraft.

 

We all know most boats are worth a lot more less than the outboards these days. Should I split the value and show only what the boat is worth and not include the motor here?

 

 

 

Thanks.

 

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What ever bill you have... you are stuck with that. If you didn't get separate invoices for boat, motor and trailer you are outta luck with the Minister of Finance and they will want taxes on what ever you can "prove" that you paid. I advised before to do this boat stuff with an Ontario Corp number and you'd be exempt from taxes (on a pay/claim/refund bases) as a "dealer"...

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One thing I have learned in crossing the 'line' over many years.

"Answer their questions" and nothing more, since it only gives them an edge to ask another question.

They want to know what the value of the boat is. If your receipt clearly shows what that value is, then submit it.

If it doesn't, then get one that does.

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What ever bill you have... you are stuck with that. If you didn't get separate invoices for boat, motor and trailer you are outta luck with the Minister of Finance and they will want taxes on what ever you can "prove" that you paid. I advised before to do this boat stuff with an Ontario Corp number and you'd be exempt from taxes (on a pay/claim/refund bases) as a "dealer"...

and then claim expenses and pay taxes on the profits seems fair!!!

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If your receipt clearly shows what that value is, then submit it.

 

If it doesn't, then get one that does.

 

Exactly... but make sure the guy on the other end, that you bought if from, is in the loop as they make calls, and they really love when they get the wife and she tells the real sale value. I can show you the fines and bills for one of those!

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As for the boats coming from the US, they simply collect the tax (13%) at the boarder. No way around that. Never lie on your purchase price if you do bring one in. Always, tell the truth because fines are huge. They will investigate if they feel that you have lied to them.

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That was what I wrote on their request for PST payment on an airplane I registered, complete with the guys name and phone number that I traded the three boats with 9.9's on them.... they never called me back or sent a follow up request. As I mentioned earlier you have to have all your ducks in a row. They didn't call him either..

 

Not any different than trading in a vehicle at the car dealer. You pay tax on the difference, but only if it's a single transaction. Why can't you trade even dollar value for even dollar value...

Edited by irishfield
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I bought a new boat back in '99 and payed cash in full including taxes. Over the next 4 years I received 3 letters asking for a copy of the bill of sale to prove I payed the tax. First 2 letters I complied with but when I received the 3rd letter I just ignored it and never heard from them again.

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Pay the the tax on everything, if you don't, better not get caught. Don't forget to change the name on the vessel license. The ministries are linked together now.

The MAN will get you sooner or later.

 

What happens if you register the trailer in your name, but forget to transfer the boat ownership into your name?

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