SALT Report 1886 – The Ohio Board of Tax Appeals ruled that a taxpayer that resided in Kentucky and purchased a boat in Indiana was liable for Ohio use tax because she registered the boat in Ohio.
The Taxpayer purchased the boat from a private seller and when she registered it with the U.S. Coast Guard she listed the Hailing Port as Cincinnati, Ohio and obtained an Ohio Watercraft Registration certificate. However, according to the Taxpayer the boat had been docked in Indiana since its purchase and only in Ohio waters ten times in all the years she owned it.
The Taxpayer further noted that the decision to register the boat in Ohio was simply to make travel on Ohio’s waterways easier, and that any use of the boat in Ohio was a transient use that is exempt under R.C. 5741.02 (c)(4).
The regulation states that the, “Transient use of tangible personal property in this state by a nonresident tourist or vacationer, or a nonbusiness use within this state by a nonresident of this state, if the property was purchased outside this state for use outside this state and is not required to be registered or licensed under the laws of this state” qualifies for the transient use exemption.
Though it was undisputed that the Taxpayer was a nonresident who purchased the boat outside the state for primary use outside the state for nonbusiness purposes, the transient use exemption did not apply because the Taxpayer failed to prove that:
- The boat was registered in another state, or
- The boat was used in Ohio less than 60 days
Therefore, because the taxpayer could not provide any documentation from the U.S. Coast Guard that verified that the boat was “temporarily transiting” in Ohio the Board of Appeals ruled that the Taxpayer’s use of the boat did not qualify as an exempt use pursuant to R.C. 1547.531.
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