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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 13344
Experience:  15years with H & R Block. Divisional leader, Instructor
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Does the luxury tax on boats apply to the size of the boat

Resolved Question:

Does the luxury tax on boats apply to the size of the boat or the value or both?
Submitted: 5 years ago.
Category: Tax
Expert:  Robin D. replied 5 years ago.

Hello and thank you for using JUst Answer.

A 3% State rate of sales or use tax applies to retail sales of aircraft and boats with a maximum tax of $1,500 per article.

If you purchase a boat and no sales tax was collected then you are responsible for paying the Use Tax in NC. The rate is 3% with a maximum tax due of $1500.00 per boat.

Customer: replied 5 years ago.
It is my understanding that a Luxury tax applies to boats over $100,000.00 in value. Is that the same as sales tax and does the size of the boat play a role or is it just purchase price.
Expert:  Robin D. replied 5 years ago.
The boat would be subject to sales (or use tax) when purchased but there is a personal property tax in NC and a boat would fall under that.

Personal property includes such items as mobile homes, untagged motor vehicles, boats, motors, farm equipment, aircraft, business machinery and equipment, or property rented to others as part of business. The tax rate for personal property is the same as the tax rate for real property.
Property is assessed at 100 percent of its appraised value. Although appraised value is intended to illustrate "full value," this standard is not always achieved for real property because it is required to be revalued only once every eight years.

I did not find any reference to a luxury tax in NC.

 

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