I guess I am venting, but also asking for any info.

I licensed my canoe in Mn today and they charged me for taxes. I thought since I bought it from Canada who didn't charge taxes on the purchase, I wouldn't have to pay them in MN. Guess I was wrong.
Then I made the mistake of not telling them to correct the amount to US dollars, so I paid an extra 30 bucks besides. 2,200 canadian compared to 1,600 US dollars.

In retrospect, I should have taken the receipt and whited out the pruchase price and made a copy of that, taking in that receipt, and told them I paid way less for it, but I hate lying.

Does this sound correct that if you purchase a canoe from a company that does not charge sales tax, you still have to pay it in MN?

30 years ago you might have been able to get away without paying Minnesota state sales tax on it but not anymore. People used to buy cars, motorcycles, boats, snowmobiles, etc.... out of state to avoid Minnesota taxes. In the 1990s the state cracked down and started to collect the tax upon registration. If you would have bought it in another state and paid sales tax there and could prove it you wouldn't have to pay Minnesota sales tax. Not sure about Canada.

I think they still want sales tax on it to license in their state, but it should have been on the American dollar equivalent, I'm thinking... This issue is also on a whole bunch of internet purchases... I won't go there...

All of the canoes I have in MN were bought there. However, this is pretty common for cars. When you first register it in a state, you pay sales tax to that state. At least that is true in CA. The idea is to prevent you from buying cars in another state just to avoid or get lower sales tax.

But, I'm about to import a canoe from CA to MN. Guess, I will be paying sales tax when I go register it. I might also have to make up a receipt. But fortunately, I only paid $300 for it.

When I bough a used canoe from an outfitter they charged sales tax and told me to make sure I kept the bill of sale that showed that or I would pay the tax when I went to transfer the title. How did you buy it in Canada and not pay GST tax? Private individual?

andym: "All of the canoes I have in MN were bought there. However, this is pretty common for cars. When you first register it in a state, you pay sales tax to that state. At least that is true in CA. The idea is to prevent you from buying cars in another state just to avoid or get lower sales tax.


But, I'm about to import a canoe from CA to MN. Guess, I will be paying sales tax when I go register it. I might also have to make up a receipt. But fortunately, I only paid $300 for it."

If you bought it used from a private party I don't think you have to pay tax on a boat. Different story if bought it used from a dealer.

Used car or airplane you have to pay Minnesota sale tax, even if bought from a private party.

Usually pay the difference. I bought from dealer in MN and pd sales tax. Registered it in IL and had to pay the 3% or so difference.

hobbydog: "When I bough a used canoe from an outfitter they charged sales tax and told me to make sure I kept the bill of sale that showed that or I would pay the tax when I went to transfer the title. How did you buy it in Canada and not pay GST tax? Private individual? "

I bought it from a dealer.
Western Canoe and Kayak in BC, and it was shipped to me in Alaska who does not charge sales tax.
Glad I'm a firefighter and has money to burn ;-)

Yikes, LT3!

That's not uncommon. Bought a canoe in WI and registered it in IL years ago. Paid the difference in sales tax to the state of IL.

ellahallely: "30 years ago you might have been able to get away without paying Minnesota state sales tax on it but not anymore. People used to buy cars, motorcycles, boats, snowmobiles, etc.... out of state to avoid Minnesota taxes. In the 1990s the state cracked down and started to collect the tax upon registration. If you would have bought it in another state and paid sales tax there and could prove it you wouldn't have to pay Minnesota sales tax. Not sure about Canada. "

This is almost right. If you can prove you paid tax in another state, they charge you the difference between what you paid and what you would have paid if you purchased it in Minnesota, if it's less. If you paid more, they don't refund you the difference, of course.

When I just registered mine, they verified that my receipt showed MN tax paid. They also told me to keep the receipt in case I have to prove that I paid sales tax.

You can't escape the tax man by purchasing out of state if it's a product that gets licensed.

I thought the requirement to license canoes in MN had changed and you are no longer required to do so.

LindenTree3: "I guess I am venting, but also asking for any info.

I licensed my canoe in Mn today and they charged me for taxes. I thought since I bought it from Canada who didn't charge taxes on the purchase, I wouldn't have to pay them in MN. Guess I was wrong.
Then I made the mistake of not telling them to correct the amount to US dollars, so I paid an extra 30 bucks besides. 2,200 canadian compared to 1,600 US dollars.

In retrospect, I should have taken the receipt and whited out the pruchase price and made a copy of that, taking in that receipt, and told them I paid way less for it, but I hate lying.

Does this sound correct that if you purchase a canoe from a company that does not charge sales tax, you still have to pay it in MN?"

Did you happen to license your canoe within the city limits of Duluth??? If so, there's your answer.

Link to new Law for canoe registration

I have zero idea,but could you have registered somehow in Alaska first?

Thanks, Elle. It was from a private party and no receipt as canoes don’t get registered here. My canoes in MN already were all from dealers and so I paid sales tax and had receipts.

Thanks for the heads up. I’ll just keep my canoe in Alaska.

airmorse: " Link to new Law for canoe registration "

Yeah, but he's now a resident of the great state of mn...

I've bought a number of used canoes and never paid a sales tax, with or without supporting paper work. Maybe it depends on the local registrar you use. I always fill out the registration transfer form on the DNR website and leave the seller side blank. never asked about it.

This message has had HTML content edited out of it.

The MN clerk should have done the math--USD to CAD conversion--assuming you had the bill of sale in hand showing a sales transaction in Canada. A no-brainer there. I would call'em on it.

firefighter with money to burn, eh? punny.

LindenTree3: "Does this sound correct that if you purchase a canoe from a company that does not charge sales tax, you still have to pay it in MN?"

Yes, its called a use tax. Individual cities and counties may have these taxes too. You are only supposed to pay the difference between the rates.

jhb8426: "

airmorse: " Link to new Law for canoe registration "

Yeah, but he's now a resident of the great state of mn...


I've bought a number of used canoes and never paid a sales tax, with or without supporting paper work. Maybe it depends on the local registrar you use. I always fill out the registration transfer form on the DNR website and leave the seller side blank. never asked about it."

In Illinois at least, if you buy a boat used from a dealer, like an outfitter, sales tax is to be collected. If you buy from a private owner, no sales tax. Like purchases from garage and tag sales are exempt. Cars are not exempt.

Kind of reminds me of an old andy and Barney show.....
Aunt bee's freezer broke... all I can remember is andy saying.....

Just pay the man aunt bee, just pay the man.

Kind of reminds me of an old andy and Barney show.....
Aunt bee's freezer broke... all I can remember is andy saying.....

Just pay the man aunt bee, just pay the man.

TGO,
I registered it in Detroit Lakes.
Pinetree,
I think I could have registered it in Ak even though they do not require it. That was my thought as well, and it may have worked.

It appears that the key inquiry is whether at the time of purchase you intended the item to be ".... purchased for use, storage, distribution, or consumption in this state,...." MN Statue 297A.63. I am pretty sure that personal property that was purchased without an intent of any of the above later brought into the state is not subject to the tax. The burden is on you to establish that however. Probably the best example would be property purchased while a resident of one state and later brought to MN when you move here. Remember, this is worth what you paid for it.

You should be able to file for refund of the incorrect amount paid on your taxes.

When I bought my SR direct from the maker 6-7 years ago and did not have to pay sales tax on it. Looking at this thread I'm not sure why, maybe they thought it was used? I assumed at the time that there was possibly some NAFTA tomfoolery at play as the boat was from Canada. Maybe the trick is to go to a DMV in the city where the people don't even know what a canoe is.

Quote from, MN Sales and Use Tax
"While sales tax is collected by the seller
and paid to the state by the seller, use tax
is self-assessed and paid by the purchaser
(end user). The purchaser pays the tax
directly to the state.
Here are some cases when use tax is due:
• You buy taxable items by mail order,
from a shopping channel, over the Internet,
etc., and the seller doesn’t collect
Minnesota tax from you.
• You buy something exempt intending
to resell it in your business, but instead
take it out of inventory for business or
personal use.
• A seller in another state or country does
not collect any sales tax from you on a
sale of an item that is taxed by Minnesota’s
law.
• A Minnesota seller fails to collect sales
tax from you on a taxable item.
• An out-of-state seller properly collects
another state’s sales tax at a rate lower
than Minnesota’s. In this case, you owe
the difference between the two rates."

In every case I've looked at If your state has sales/use tax it is applied to covered purchases no matter where bought. Even internet sales are taxed, it is just very difficult for states to access private purchase records, that is why there is a line on state tax forms for calculating unreported purchases, an honor system. Until a way to charge is made legal, as when registering a new to you canoe.

butthead

Yeah, this stinks, but unfortunately it’s the law. When I bought a used aluminum 7 or 8 years ago, I had to pay the tax when I registered it a year and a half later (the old license was good for the following year). When I bought my Northstar a few years ago, I needed to bring in the receipt to prove I had already paid Sales tax. Now, with more expensive composites out there which are obviously spendier, the state really wants their share. I don’t think it’s a big deal, but I’m not buying a new boat very often.

Tony

Wow !
I have 3 canoes licensed in MN.
Never paid sales tax to MN, just renew the 18 dollar sticker, every 3 years.
I bought one new in IL in 1979 and paid sales tax there.
the other two, were used & I paid cash.

Got my renewal notice from Mn. last week and owe $21.50 for 3 years. I think I will hurry up and pay it by mail. I bought in Missouri from a dealer and paid sales tax then. but never have taken proof of that on my trips where I usually purchase the sticker from an outfitter.

bwcadan: "Got my renewal notice from Mn. last week and owe $21.50 for 3 years. I think I will hurry up and pay it by mail. I bought in Missouri from a dealer and paid sales tax then. but never have taken proof of that on my trips where I usually purchase the sticker from an outfitter. "

I'm confused bwcadan,
Are you saying you purchased a MN watercraft sticker from an outfitter, or some other sort of sticker?

PS, all thanks for the info provided here.
I was pretty much just venting, and never expected to get this sort of resoponse or good info. One peice of good info came from TGO. I will avoid renewing anything in Duluth due to the extra taxes, if I am understanding things correctly.
Hermantown is only 2 miles away. and is where we do 90 percent of our buisness anyway,

butthead: "Quote from, MN Sales and Use Tax
"While sales tax is collected by the seller
and paid to the state by the seller, use tax
is self-assessed and paid by the purchaser
(end user). The purchaser pays the tax
directly to the state.
Here are some cases when use tax is due:
• You buy taxable items by mail order,
from a shopping channel, over the Internet,
etc., and the seller doesn’t collect
Minnesota tax from you.
• You buy something exempt intending
to resell it in your business, but instead
take it out of inventory for business or
personal use.
• A seller in another state or country does
not collect any sales tax from you on a
sale of an item that is taxed by Minnesota’s
law.
• A Minnesota seller fails to collect sales
tax from you on a taxable item.
• An out-of-state seller properly collects
another state’s sales tax at a rate lower
than Minnesota’s. In this case, you owe
the difference between the two rates."


In every case I've looked at If your state has sales/use tax it is applied to covered purchases no matter where bought. Even internet sales are taxed, it is just very difficult for states to access private purchase records, that is why there is a line on state tax forms for calculating unreported purchases, an honor system. Until a way to charge is made legal, as when registering a new to you canoe.


butthead"

You say no matter bought. Not sure if you mean what state or from who. But as far as i find, sales tax is not normally due on "isolated or occasional" sales. Check out this MN tax dept Fact sheet . This would explain some of the discrepancies between having to pay or not taxes on a used canoe.

billconner: "You say no matter bought. Not sure if you mean what state or from who. But as far as i find, sales tax is not normally due on "isolated or occasional" sales. Check out this MN tax dept Fact sheet . This would explain some of the discrepancies between having to pay or not taxes on a used canoe. "

It looks like you are confusing sales tax with the use tax. The linked pdf spells out exemptions for a seller not to have to collect sales taxes on a transaction. The use tax applies to the buyer, and is based on the difference between sales paid where the transaction took place, and what the sales tax rate is at the place where the product will be used.

In Linden’s case, he owes the amount of taxes that would have been collected in Detroit Lakes if the transaction had occurred there, because none was originally collected. In other words, the difference between zero and 7.375%. (6.875% state + 0.5% Becker County)

LindenTree3: "

bwcadan: "Got my renewal notice from Mn. last week and owe $21.50 for 3 years. I think I will hurry up and pay it by mail. I bought in Missouri from a dealer and paid sales tax then. but never have taken proof of that on my trips where I usually purchase the sticker from an outfitter. "

I'm confused bwcadan,
Are you saying you purchased a MN watercraft sticker from an outfitter, or some other sort of sticker?


PS, all thanks for the info provided here.
I was pretty much just venting, and never expected to get this sort of resoponse or good info. One peice of good info came from TGO. I will avoid renewing anything in Duluth due to the extra taxes, if I am understanding things correctly.
Hermantown is only 2 miles away. and is where we do 90 percent of our buisness anyway,"

Welcome to my world of confusion, on occasion.

I have previously purchased the expiration stickers from an outfitter. My current sticker expired in "17". If I remember right, they gave me a receipt and the actual sticker was mailed to the house. May have been 3 or 6 years ago, or both.

I think some of the confusion is that the tax is paid on a title/registration transfer. If you are just purchasing tabs for a canoe registered in your name another state then tax does not apply. In other words, the tax is collected when ownership changes.

inspector13: "

billconner: "You say no matter bought. Not sure if you mean what state or from who. But as far as i find, sales tax is not normally due on "isolated or occasional" sales. Check out this MN tax dept Fact sheet . This would explain some of the discrepancies between having to pay or not taxes on a used canoe. "

It looks like you are confusing sales tax with the use tax. The linked pdf spells out exemptions for a seller not to have to collect sales taxes on a transaction. The use tax applies to the buyer, and is based on the difference between sales paid where the transaction took place, and what the sales tax rate is at the place where the product will be used.

In Linden’s case, he owes the amount of taxes that would have been collected in Detroit Lakes if the transaction had occurred there, because none was originally collected. In other words, the difference between zero and 7.375%. (6.875% state + 0.5% Becker County)

"

Of course you're correct. It just seems that use tax on used items bought from private sellers not required to collect sales tax are often not collected, not to mention tax on amazon sales prior to them having a nexus in illinois.

If there is a sales tax exemption by law there would be no use tax. I have no idea how the use tax works if state (or national) laws differed in their sales tax exemption. For instance, I see that Illinois also has a use tax. Minnesota law exempts clothing from sales tax. If you were to purchase clothing here, would you be required by Illinois law to pay your use tax?

Like Butthead wrote, it is very difficult for the state to know what anyone has purchased unless it is for a business, or when you first register that purchase with the state for whatever reason.