Marine surveyors’ primary product to the boating community is a vessel condition and valuation report. By default marine surveyors have become the de-facto vessel appraisers in the United States. Due to the falling value of vessels, Christian & Company has received numerous requests for appraisals in order to lower the basis for property tax assessment. As a result, we did some research to educate ourselves and to share what we learned with others who may be interested.
In California there is a state personal property tax of 1% per year. The research we did was primarily through the San Diego Tax Assessors office; they are extremely helpful. They appraise vessels and assess taxes, which include the 1% state personal property tax and may include slightly more taxes depending on geographic location for items such as retiring bonds. The additional localized taxes seldom are more than .2 percent. The address for the San Diego marine and aviation tax assessor’s office is 9225 Claremont Mesa Blvd. 1st Floor, San Diego, California 92123. Phone numbers for San Diego, Orange County, Los Angeles and Ventura counties are included at the end of this document.
All vessels located within the county on January 1st of each year are subject to the tax. A list of all vessels registered in the state of California is provided to the tax assessor’s office by the California Department of Motor Vehicles. The DMV does not collect the property tax on vessels; it is collected by the County Assessors office. Marina operators provide a list of slip renters and the assessors office has a team of four who “walk the docks”, collecting information on vessels to supplement the information provided by marina operators. This is the method for obtaining a list of U.S. documented vessels that are subject to the tax.
When the vessel first appears on the tax assessor’s roll, it is appraised. The assessor appraises the value as of January 1st of each year. The initial value may be determined by the purchase price or through appraisal techniques. Among tools available and used by the assessor’s office are value guide books including A.B.O.S., N.A.D.A. and B.U.C. and value data bases available on the internet. Due to the number of vessels which require appraisal and the limited personnel, the value of an individual vessel is not thoroughly and extensively researched by the tax assessor’s office and vessel inspections are not performed. They appraise thousands of vessels and thus are unable to spend too much time on each appraisal.
After an initial value of a vessel is established, the subsequent value is adjusted annually per a depreciation scale determined by the tax assessor’s office. A higher depreciation percentage is applied to new vessels and the percentage of depreciation decreases with age.
Based on our experience, vessel values have suffered a significant decrease in the last two years and are currently trending rapidly downward. We recommend you take a few moments to review the appraised value of your vessel and feel free to call or email us if you would like a free verbal approximation of its value. Perhaps a formal appraisal of your vessel will allow a reduction in taxes for the immediate tax bill and for years to come.
The tax assessor’s office has no firm or written guidelines as to what they will accept as proof of value for your vessel. There is a handbook available through the State Board of Equalization. A marine survey is one of the options available for you to document the current value of your vessel. The tax assessor’s office will consider any documentation and if they agree, they will change the appraised value and the tax accordingly. If they disagree with your value an appeal can be made. Appeals are initially addressed with a second consideration of the value and are followed with a board review if the vessel owner and the assessor’s office still disagree on valuation.
Christian & Company Marine Surveyors, Inc. would be happy to provide a written valuation of your vessel and our fee is often less than the tax savings in a single year, with additional financial benefits in the years to follow.
County Tax Assessor – Marine and Aviation contact telephone numbers:
San Diego 858-505-6200
Los Angeles 213-974-3119
Orange County 714-834-2772