SOUTHERN CALIFORNIA — The dreaded “T” word – yes, we’re talking taxes – is one of life’s two guarantees. So it’s no surprise boaters are subject to filling Uncle Sam’s coffers while docked at any of California’s marinas or harbors. One of those levies imposed upon boaters is the possessory...
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Glad to see this article. I have been outspoken about this very subject since being in a Dana Point slip. These are my thoughts: (1) The person occupying a slip on Jan. 1st. of the year pays the tax for the entire year—even if he moved out the next month. (1) who pays the tax for temporary use of the slip, i.e. summer only renters and guest slips? (3) this is the most absurd and unfair tax system I have ever heard of. It is the very definition of “taxation without representation”. I attempted to organize a group to fight this egregious rip-off of boaters but apparently no one was interested so I gave it up. I’ve sold my boat now (got too expensive) so I don’t have to worry about it anymore; however, I’m glad the Colonists had more courage and fought for their rights; and, had their “Tea Party” to stand up to a corrupt Government.
Solution: Go sailing the day they check the slips, in some places Jan 1. Just ask around.
This tax will it be the same for keeping the boat in boat storage its like keeping in a dry dock??
I left CA back in 2013 because CA is a tax slave state.
Case law supports the assessment of possessory interest going back 150 years, so you need to get over the legal issues and move on to valuation. And yes, if you are reported as the lessee on Jan 1 you are 100% responsible for the following year’s taxes, July 1 to June 30, even if you leave and someone else slips in (this is known as concurrent use PI – crazy but valid – don’t blame the Assessor, blame the dems in Sac.). There is NO proration process for possessory interest like there is with all other real property under Prop 13. And, your boat is personal property subject to its own bill. For valuation, a PI is based on the present value of the rent and term. So $200/month for 2 years at an 8% discount rate is $2400 + $2376 = $4776 (the assessed value). Pretending a tax rate of 1.3% (to include specials) the annual tax bill would be $62.08. Really not that bad. And, some counties have a low value ordinance of $5000 so it can be very important to negotiate rent and term. If you did $200/month for a 10-year lease your assessment could be $15,943 with a bill of $207.25 per year (using the same assumptions). So do the math, and keep your term short, but not too short; if you sign a month-to-month lease the Assessor gets to use any term he/she can justify as anticipated. Two years is the best to be safe. Happy sailing and taxation!