Tennessee threatens suit against hobbyist boatbuilder

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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.

The state said that makes him a boat dealer and subject to paying extra taxes, WSMV.com reported.

The boat is 14 feet long and made of wood. The family ordered the plans over the Internet because 7-year-old Carter King loves to fish with his father, Johnathan. But when the Kings registered their boat and paid the registration fees, the problems began.

Letters from the Tennessee Department of Revenue say that because the Kings are boat dealers and builders, they have to pay $539 in taxes on the boat, according to the TV station.

“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 said. “If we don’t [pay the taxes], they could file liens and levies against the craft.”

Officials at the revenue department told the TV station that they couldn’t discuss the cases of individual taxpayers.

Click here for the full article.

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Comments

15 comments on “Tennessee threatens suit against hobbyist boatbuilder

  1. Doug Reimel

    This just another Government overreach. Things must be slow at the Department of Revenue in Tennessee when they have to resort to this. Come to think of it, it they succeed he then becomes subject to Child labor laws, Child endangerment laws, Child health and welfare laws.

    Let me guess, if only he had obtained the proper permission slip from Big brother, this would have never happened. Government is to BIG>

  2. ibleedstyrene

    Man- even the feds allow homebuilt as not having to meet the CFRs and not be registered- and one of the qualifications is that it can’t be sold (for 5 years anyway). So, if you’re building a boat that by Federal law can’t be sold, how can you be a dealer?

  3. Tea Partier

    Let the state file liens against the hull. Go out and enjoy your boat for years. Once it has tired out, have a nice bonfire and burn it. Let the State collect their lien on ashes.

    Problem solved.

  4. Grandman

    People build small airplanes, cars, boats all the time as a HOBBY, or pleasure. This does not constitute the legal description of an OEM of these activities. This obviously is the action of a bureaucrat employee trying to make something happen to show their brilliance. With a good attorney this could result in legal action against the state. I would bet this will be settled quickly, and with little or no problems. The idiot who instigated this probably will be reassigned……….hopefully.

  5. Bev Calhoun

    That is just crazy! Almost every state allows home built watercraft, cars, trailers and motorcycles. So I guess if I lived in Tennessee and built a motorcycle or customized a car I would then be a builder and a dealer????!!!!!!

    This man did a nice thing. He spent time with his son and built a boat they could enjoy together. Somebody in TN is nuts and it isn’t the guy that built the boat!

    Give this all the publicity you can and stop the madness!! Good Luck:)

  6. bigbrotherbad

    When you re-elect the idiot politicians that allow this BS, you get what you voted for. The only answer, there is no other… VOTE THEM ALL OUT NOW AND SEND A MESSAGE.

  7. Jade Seattle

    To Grandman:
    The idiot that came up with this interpretation will not be re-assigned. They will however, most likely be promoted.

  8. Fred Glass

    There must be an “intent” to sell for this person to be considered either a dealer or manufacturer.

    The person at the Tennessee Dept. of Revenue is an idiot but is anyone surprised?

    Que song from Deliverance.

  9. F.Todd

    This has gone too far… First i salute the Father choosing to explore with his son the world of making something with your hands and tools, and doing it together! They closed all the shop classes at school to make sure we didn’t develop engineers , or craftsman ,or preserve generations of skills now on the brink of extinction.Now the state wants to control your hobby, what has happened to COMMON SENSE. This is at the core of the loss of manufacturing in the USA, we desperately need to put these simple programs back in our schools , homes and communities. These are the fundamentals that have been lost and why we are losing the world battle in manufacturing and young talent discovering a world outside of fast food.The State Of Tennessee needs to review this and get this off the books. The Government has intruded to a level that has paralyzed this country , especially small business. Now there in your garage,telling how and what you can do with your son… is your bedroom next ?

  10. Ed Fay

    IRS gives hobbyists a test of eight business versus hobbyist “for profit” questions >www.wmctv.com/story/10943374/eight-important-tax-questions-for-hobbyists?clienttype=printable. I don’t suspect any “profit” qualifies the father to be “business” versus “hobbyist”. Then other questions that Tennessee should be able to answer easily:
    The criteria used by most tax offices to assess if an activity is a hobby or a business are:
    (1) The size and commerciality of the activity.
    (2) The frequency of the activity and transactions, though inactivity is not necessarily a barrier to being assessed as a business.
    (3) The application of business principles.
    (4) Whether there is a genuine profit motive.
    (5) The amount of time devoted by the tax payer compared with other activities.
    (6) The existence of arm’s-length customers (as opposed to just selling your wares to family and friends).
    (7) The characteristics or quantities of the commodities, for example if the goods are for domestic or non-commercial use, or if the quantities produced are well in excess of domestic needs.
    Obviously these criterion are not black and white, and if the tax payer wishes to argue with a determination this sort of thing does often end up before the courts. But you have to ask yourself -WHAT IS TENNESSEE THINKING???

  11. anthony

    So does this mean , If you build a boat from a kit, What about model boats that are 6′ to 8′ in lenth, in Tenn. you will need to register the vessel, Wow what is next, put tolls on the fish you catch,

  12. Mr. Bill

    These are the same Morons that as a result of thier own Stupidity, aided a local (Grand Rapids MI) Con Man (Michael Vorce) in bilking Millions of Dollars out of Banks & Credit Unions in the Great Lakes 5 or so years ago. He got a hold of some of their (TN) letterhead, along with the name and signature specimen of their director of boat registration div. and soon after was getting TN Boat Registrations issued on ficticious Boats, which he then converted to MI Boat Titles and so on…. The state (TN) of course denided any culpability. It’s easy to see how they would be out to bust a 7 year old and his dad for such a crime against the state.

  13. ned mccrea

    When you dig into what happened it appears the state may have an argument. It appears that ( I am making some assumptions ) the kit was bought on-line and that no sales tax was paid at that time and that what the state is trying to do at this point is collect the sales tax they missed. Most of us have bought on-line and not paid sales tax. We have gotten away with it because you do not have to register the new slacks you bought from Land’s End. He had to register the boat so the state became aware of the boat and shazam he now owes sales tax. If the state you live in found out about your slacks from Land’s End they would try to collect the tax for that.

  14. jbtruxseller

    Got to agree in principle with Ned McCrea’s comments. Tennessee has thankfully, wonderfully, and recently become home to an Amazon.com fulfillment center and the state legislature is currently hammering out a deal with Amazon over taxing their sales to TN state residents. In a few words- Online sales are receiving a lot of visibility and scrutiny these days.

    If the materials used to construct the boat were purchased within TN and appropriately taxed at their purchase, and the boat was declared and documented as ‘homebuilt’ at the time of registration there would be no additional tax due. At least that has been my experience living and boating here in TN. Same thing applies to my ‘homebuilt’ boat trailer, assembled from ‘scrap’ materials and two new wheels/tires.

    My guess, (and it’s a guess- I wasn’t a witness), is that this well meaning, honest citizen used his online invoice as the source for the materials used to construct this water craft. Ouch! Too much honesty is very confusing to most state employess- they are trained to work within a specific set of rules. Some pictures of the craft during construction (required) and a few Lowe’s invoices (required) attached to the TN TWRA form would’ve satisfied his legal and tax requirement.

    Anyway that’s been my experience to date.

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