Boat / Trailer Sales Tax – bologna

  • LazyEyez
    Arcadia, WI
    Posts: 353
    February 7, 2006 at 11:38 pm #1248825

    Question: I recently purchased a new boat in MN and am a WI resident. In MN you only get taxed on Boat / Motor and not the trailer whereas in WI you get taxed on Boat / Motor / Trailer. Here is my scenario as I was told by the WI DNR I have tax due…

    Purchase Price: $25K ($5k = Trailer)

    MN Tax = $20k * 7% =$1400 (includes .005 City Tax)
    –whereas–
    WI Tax = $25k * 5.5% = $1375 (Tremp Cty)

    I was told by the WI DNR that I owe an additional $275…There rationale was that they can only collect from MN the 5.5% of the purchase price of the boat (not trailer) and that they cannot help that I had to overpay taxes in MN.

    This means WI collects from MN $20k * 5.5% = $1100 showing $275 due to the State of WI.

    Has anyone else had this happen or can validate its authenticity? I find it hard to believe that WI cannot collect excess tax a person paid into the state of MN.

    Any Help would be appreciated.

    nick858
    Eldora, Iowa
    Posts: 367
    February 8, 2006 at 1:43 am #418724

    I bought a boat on the edge of the county line here. The dealer is in a different county by about 20 feet, I had to pay 8% because thats what their county charges, but my county was 6%. On 15000, that is a $300 difference. I dont understand why cars are a flat 5%, and boats are not.

    cougareye
    Hudson, WI
    Posts: 4145
    February 8, 2006 at 2:29 am #418732

    I’d like to compare notes on this with you. I’m in a similar situation and have even gone through an appeal with the State of WI. I think now that they’ve explained it to me twice, I understand, but I was pretty upset. I’d like to know if we have the same boat dealer to see if its limited to one dealer consistently messing this up. I have a copy of my appeal at work and I’ll send it to you via pm tomorrow.

    The reasons I was given were slightly different than yours and from a different government entity. I phoned them and they were very polite and understanding but it did take them two tries to explain it to me.

    Look for a pm tomorrow! Send me a pm with your MN dealer!

    Eric

    LazyEyez
    Arcadia, WI
    Posts: 353
    February 8, 2006 at 2:38 am #418738

    It is not a dealer issue at all as they collected tax as guided by the law of MN, it is related to what the State of WI can collect from MN is what the answer was that I received from the state. I will look for your PM. Thanks

    Bassn Dan
    Posts: 973
    February 8, 2006 at 4:12 am #418775

    It’s been a while since I bought a boat in MN, but shouldn’t this work the same as buying a car or truck in that the MN dealer collects tax at the WI rate NOT the MN rate and then that tax is passed on to WI?

    If this is correct, the dealer owes you a refund for collecting excess sales tax.

    One other thing. $5000 of the boats price being allocated to the trailer seems quite high to me. Is this the dealer’s cost break down, or is this the WI DNR’s estimate? If it’s the WI DNR, I would get a cost break down from your dealer because this sounds WAY too high for the trailer’s cost and is another way that the DNR tries to grab more money for this.

    Good luck.

    Dan

    cougareye
    Hudson, WI
    Posts: 4145
    February 8, 2006 at 6:07 pm #418969

    I can’t attach anything to a PM so I’ll summarize here. I don’t have my original receipt in front of me but here is what I can piece together.

    My original purchase price was $19350, package deal for boat, motor, trailer, and package equipment such as depth finder, trolling motor, and some other boat options. I paid taxes of $1172.60.

    In November I got a letter from the WI Department of Revenue telling me that I owe an additional $176.83 plus interest, which put the total around $205. What had triggered this with WI was that in addition to the package deal, I had purchased a Boat Cover, extra battery, and paid a boat document fee that together cost $265. The tax they said on this portion was either not included or understated, I’ll need to find their letter again for sure. What made me mad was that they said the total tax I owed on the purchase including the additional $265 was $1078.83. Remember, I had paid $1172.60 in taxes.

    Their reasoning for the extra amount owed was that they could only credit me for $902 in previously paid taxes as that should have been the rate in WI and St. Croix County. So I now owed them $176.83 plus interest. I appealed and lost!! I now owe more as interest is running each day.

    Should I be recouping the $93.77 ($1172.60 – $1078.83) from my dealer? Or from the financing company? Or am I stuck. Regardless, I owe WI over $220.

    What I noted as differences in the answer you got and mine were:

    1) You talked to the WI DNR? I talked to Dept. of Revenue.
    2) You mentioned something about the trailer not being taxable? I was taxed on my entire package.
    3) You don’t have the issue of extra items added to your package price, at least you didn’t indicate as such.

    Appreciate any feedback on this! I lost some sleep again last night over this damn thing!

    Eric

    PoppaWolf1
    River Falls, WI
    Posts: 12
    February 8, 2006 at 11:08 pm #419089

    How does a person get this correct the first time? I’m in the process of buying a boat in MN and I live in WI too. I don’t need this kind of mess to deal with. Any guidance would be appreciated.

    eyejacker
    Hudson, Wisconsin
    Posts: 1890
    February 8, 2006 at 11:29 pm #419092

    I bought my boat in MN last spring and recently got a bill from The State of Wi, where I reside, for an additional $149.63 in sales tax. I did not want a hassle so I had I Da’ Woman cut them a check! Ain’t love grand!

    LazyEyez
    Arcadia, WI
    Posts: 353
    February 9, 2006 at 12:20 am #419107

    Quote:

    How does a person get this correct the first time? I’m in the process of buying a boat in MN and I live in WI too. I don’t need this kind of mess to deal with. Any guidance would be appreciated.

    If the dealer has a sales and use tax number in Wisconsin then they can with-hold WI Sales Tax and remit too Wisconsin. If the dealer does not have a WI Sale Tax # then you will be in the same boat as the rest of us.

    Or, play the game and have the dealer create 2 invoices, one for the trailer and one for the boat. When you go to license your boat the sales receipt is required and since you wouldn’t have to show the trailer receipt (and related cost) you would be good to go. However, as a reminder this is illegal but it would get around the situation. Basically a mini tax shelter.

    Good fish’n

    LazyEyez
    Arcadia, WI
    Posts: 353
    February 9, 2006 at 12:24 am #419109

    Quote:

    It’s been a while since I bought a boat in MN, but shouldn’t this work the same as buying a car or truck in that the MN dealer collects tax at the WI rate NOT the MN rate and then that tax is passed on to WI?

    ONLY IF THEY HAVE A WI SALES AND USE TAX #…

    If this is correct, the dealer owes you a refund for collecting excess sales tax.

    CORRECT, IF THEY HAVE A WI SALES & USE TAX #

    One other thing. $5000 of the boats price being allocated to the trailer seems quite high to me. Is this the dealer’s cost break down, or is this the WI DNR’s estimate? If it’s the WI DNR, I would get a cost break down from your dealer because this sounds WAY too high for the trailer’s cost and is another way that the DNR tries to grab more money for this.

    GOOD POINT, BUT THE COST IS ACCURATE AS THE TRAILER IS “RANGER TRAIL”

    Good luck.

    Dan

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