• "Maritime Museum Celebrates Anniversary"

• "VT Removes Barrier to Out of State Boaters""

• "Dockside Memorial Dedicated"

"VT Now User Friendly"

by Vaughn Clark & Ken Signorello

he Vermont Legislature passed a revision to the use tax law that should have a significant impact on Vermont marinas and out of state boaters from New Hampshire that spend large amounts of time in Vermont waters. House bill 805 altered 32 V.S.A. §9744(2) which previously listed properties that were not subject to compensating use tax. Vessels were specially excluded from this list, making them subject to the tax.

According to Val Sangiucomo, Ways and Means Committee Chairperson, Vessels used in Vermont waters for 30 days or more are no longer subject to the tax. Sangiucomo explained that when his committee looked at the revenue brought in by the tax versus the lost business to Vermont businesses they decided it wasn’t worth it. Sangiucomo noted that the change goes into affect on June 30, 1996.

Before this change out of state boaters that remained in Vermont waters for more than 30 cumulative days per year were required to apply for a “Vermont Validation Sticker”. The fee schedule is very similar to registering your boat. The fee schedule for the “Validation Sticker” remains unchanged: boats <16' $10; 16 to < 26' $20; 26 to < 40' $40; and 40' and up $100. If you paid no sales tax when you purchased your boat you would be assessed 5% of the value, just as though you were registering. New York residents that kept their boats in Vermont will see no real change since they have already paid sales tax in NY. However, New Hampshire and Canadian registered boat owners will see a big change.

Now the only difference between Vermont and NY is the 30 cumulative day “Vessel Validation Sticker” law and fee schedule. One look at NY and VT marinas near the Canadian border shows the effect of the prior policy. NY marinas are full of Canadian registered boats and Vermont marinas are not.

Sergeant Buck of the Vermont State Police had not yet been informed of the change, however his department’s policy has been to enforce the possession of the “Validation Sticker” part of the law, not the payment of the use tax. The Vermont Tax Department is responsible for the collection of the use tax. So many out of state boaters were happy to get a $60 ticket for not having a “Validation Sticker” rather than pay 5% of the value of their boat.

Chauncy Liefe, hearing examiner at the Vermont Motor Vehicle Department, explained that since his department is collecting the tax on behalf of the tax department, the tax department must initiate any changes to motor vehicle policies. To date no plans to change policies or forms have been made.

Still in effect is another law requirement that vessels in Vermont waters 90 consecutive days or more register. However with three separate jurisdictions just a few minutes away it is relatively easy to break a consecutive stay into two shorter periods, as New York State has found when trying to enforce its 90 day law. It is not clear whether use tax is still going to be assessed on regular registration although for out of state registered vessels it is probably a moot point, since they can easily limit their consecutive stay length.

Peter Hill, co-owner of The Moorings, a Malletts Bay marina is enthusiastic about the repeal. “It will mean more business for Vermont marinas. We’ve seen a decline in Canadian vessels over the last six or seven years since the tax was enacted” said Hill who hopes to see more publicity about the repeal. “A big problem now is that Canadian boat dealers are still telling their clients to go to the New York side of the lake to avoid the tax. We hope to see the return of Canadian clients once the word gets out.”