Tag Archives: boat

Tax Bill for Building Boat May Inspire Tax Bill in Legislature

A dustup earlier this year between a Murfreesboro man and the Tennessee Department of Revenue over taxes on a home-built boat has led one lawmaker to consider reforming the state’s tax laws, according to TNReport.
The problems began for Johnathan King, 39, when he attempted to register a 14-foot boat, which he had built in his garage for personal use, with the Tennessee Wildlife Resources Association. The boat, made of plywood, fiberglass overlay and epoxy, had been built with materials purchased locally, a motor purchased in Hermitage four years ago, and plans purchased over the Internet, King said.
…The department sent King a bill amounting to over $500 for the estimated taxes on his boat, which included sales and use tax on the materials used to build the boat, as well as the threat of a lawsuit if he did not pay. King, a former employee of the Internal Revenue Service, has since gotten the bill reduced to $40.
King’s case also attracted attention from Capitol Hill.
Rep. Joe Carr, R-Lascassas, King’s representative, said the law governing King’s tax case is overly broad and ambiguous and gives state tax collectors too much wiggle room. Carr says the state should not have compelled King to pay the tax on the boat since he had already paid sales taxes on the materials.
“That’s just an example of an overbearing bureaucracy that has too much latitude with regards to how a statute or regulation can be interpreted,” Carr said.

Garage-Built Boat Tagged With $539 Tax Bill

The Tennessee Department of Revenue is threatening court action against a Murfreesboro man who built a small wooden boat in his garage with his 7-year-old son, according to WSMV-TV.
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
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Boat Buyer Indicted on Felony Charges for Dodging Sales Taxes

News relese from state Department of Revenue:
Clinton, Tenn. – The Special Investigations Section of the Tennessee Department
of Revenue conducted the investigation that led to the indictment and surrender
of Jerry Lee Hatmaker, age 64, of Knoxville, Tenn. On Dec. 14, 2011, Hatmaker
surrendered to authorities at the Anderson County Sheriff’s Department. Bond was
set at $25,000.
On Dec. 12, 2011, the Anderson County Grand Jury returned a 4 count indictment
for Evasion of Sales Tax in violation of Tenn. Code Ann. Section 67-1-1440, a
Class E felony. Hatmaker was also indicted on one count of Filing a False
Report, one count of Perjury, and one count of Forgery. The indictment charges
that Hatmaker obstructed the State in the collection of sales tax by falsifying
records relating to his purchase of a boat, resulting in underreported sales tax
totaling $2,050.50.
“The Department of Revenue promotes voluntary taxpayer compliance by educating
taxpayers, aggressively pursuing criminal sanctions and demanding accountability
when taxpayers engage in fraudulent activity,” said Revenue Commissioner Richard
H. Roberts. “This indictment underscores the department’s ongoing efforts to
enforce Tennessee’s tax laws.”
Prosecution of this criminal case was pursued by the department in cooperation
with District Attorney General Dave Clark’s office. Citizens who suspect
violations of Tennessee’s revenue laws should call the toll-free tax fraud hot
line at (800) FRAUDTX (372-8389).
In addition to collecting state taxes, $2.0 billion of local sales and business
taxes were collected by the department for local governments during the 2011
fiscal year. Besides collecting taxes, the department enforces the revenue laws
fairly and impartially in an effort to encourage voluntary taxpayer compliance.
The department also apportions revenue collections for distribution to the
various state funds and local units of government. To learn more about the
department, log on to www.TN.gov/revenue.