State threatens suit against boat hobbyists
Posted: Feb 08, 2012 6:27 PM EST Posted by Nancy Amons
The state says that makes him a boat dealer and subject to paying extra taxes.
The boat is 14 feet long and made of wood. The family ordered the plans over the Internet because 7-year-old Carter loves to fish with his dad.
But when the Kings registered their boat and paid the boat registration fees, the nightmare started.
Letters from the Tennessee Department of Revenue say that because the Kings are boat dealers and manufacturers, they have to pay $539 dollars in taxes on the boat.
Johnathan King thought there was a mistake, so he called the auditor assigned to his case.
“I explained to them that this is just a wooden craft built in the garage, and they indicated that they knew that that was what this was,” King says.
Revenue didn't back down from insisting they were dealers, and warned the family the state could get injunctions or even pursue misdemeanor charges if they didn't pay the taxes.
“If we don't, they could file liens and levies against the craft,” King says.
“To say it politely, I think it's quite silly,” he says.
How could something you build in your own garage for your own use make you a dealer?
We asked the Department of Revenue for an interview. They said they couldn't discuss the cases of individual taxpayers, and said that no one was available to speak about the issue, even in general terms.
Johnathan King says there's no way he's a dealer; this boat is intended to be a family heirloom that will be passed to his son's children.
“It'll never be for sale,” he says. “He would be very upset, yes.”
Our view from the helm: We all know how this story will end. The Tennessee Department of Revenue will back down from their ridiculous position and the King family will not face any legal action from the state.
What we always wonder about with stories like this is what government nimrod thought that they would actually get away with trying to enforce a law that is clearly intended for situations other than a family building their own boat from a mail order kit and using it for their own personal enjoyment?
I’d like to see he math and accounting being used by the department to figure out the tax! Let’s see, the boat was built in the garage which is owned by the “Dealer” cost= $0.
The boat has not been sold and thus no revenue generated= Taxable income $0
Thus, asusming a 13% tax (heck, assume its 100% for what it matters) then the tax owed by the “Dealer” would be as follows:
$0.00 X 100% = $0.
I have been out of school for some time but doesn’t anything multipled by 0 still equal 0?
If there was a tax for stupid the Department would be up the creek!!