Do I have to pay luxury taxes every year?

July 16, 2001

Subject:  Tax on Boat Purchase
Date:  Fri, 19 Jan 2001
From:  Darlene

A friend told me that we may have to pay a 7% luxury tax on our boat every year because the value is over $50,000.00 Is this true? I figured we would have to pay personal property tax based on the boat's value, but I thought that was charged at 1.5 % of the value.



Date:  09 Feb 2001

Hello Darlene,

I think your friend is having some fun messing with your mind.

The federal luxury tax for boats was repealed several years ago, and only applied at the time the boat was sold. The dealer was responsible for collecting the tax.

There may be other taxes that apply to boats; this isn't one of them.

Good luck!
Mike Gray

For answers to new questions, subscribe to our newsletter, Michael Gray, CPA's Tax & Business Insight by filling out the form below.

Home    Newsletter Archive    Introducing Michael Gray, CPA    Articles    Tax FAQ   Need Help?    Other Links

Michael Gray, CPA
2482 Wooding Ct.
San Jose, CA 95128
(408) 918-3162
FAX: (408) 938-0610
Hours: 8am - 5pm PDT Monday - Friday

Find us on Facebook
Follow me on Twitter
Connect on LinkedIn
Connect on Google+
Our Blog

Subscribe to Michael Gray, CPA's
Tax & Business Insight

We respect your email privacy