Possible Move to D.C.

J

jmeirhofer

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My employer may be moving me to the D.C. area. I was wondering if anyone had any insight into the which state Virginia or Maryland is most advantagous to live in from a taxation stanpoint. Or even, D.C. I going to be there approx. 2.5 years and then retire so it is not long term. I am mostly thinking of personal property tax for things like cars and boats. Especially since I am looking for a 45 +/- foot boat. Taxes here in CA run about 2% of assessed value. I won't be purchasing a house so I am not to worried about real property tax. My other real concern is income tax.

Any and all comments welcome.
 
VA has annual personal property tax, MD does not.. IN VA depending on the county, tax can be high...and it is on almost anything of value...cars, motorcycles, tractors, boats, etc...State income tax not so bad, MD income a tad worse in my opinion. DC, not sure about. Good news is that in VA you get something for all that tax, not so much in MD. You may not be able to keep a 45' in "DC", so look at the local tax that you would pay when deciding where to slip the boat. Northern Neck of VA has some of the lower rates, Hampton, VA as no boat tax if I recall correctly.

Welcome to DC...
 
I don't have all the details about VA taxation but I believe VA does have a Personal Property Tax. MD does not have a Personal Property Tax. MD does have a 5% sales tax and a sliding income tax. The sales tax applies to boats (one time tax) but the bi-annual registration is a very inexpensive $32 for a 2 year sticker without regard to boat size. Most dinks only need to be registered one time and remain registered for life.
 
In VA, personal property taxes are assessed at the county/city level and they can vary greatly. Where we keep our boat, the county usually assesses boat values very low so the tax bite is very reasonable. There are a few localities in VA that don't charge property tax on boats.
 
Thanks for the quick responses. Seems VA personal property tax is a bit like CA. I don't think you can actually slip a boat in D.C. either. Least not from what I could find in my few visits there. Maryland has a certain tax advantage for me in that they do not tax the first $5k of military retirement income. But if they are a percent or more higher overall it may not be worth it. Does either state have county income taxes?

Right now we are in the stage of they offered and I countered. I had planned on retiring at the end of next year and this would push that out about 1.5 years so I am not being very flexible on my end. I will know for sure on the 7th of July. I would have to be in place by the middle of August. Right now I am just going there for the first week of each month. My office is actually in Silver Spring but the job sites are D.C., Tysons Corner, Largo, and Baltimore. The D.C. project will be done in March.

So many questions. So little time. Thanks again for the responses.
 
I do not know of any local income taxes in MD.
 
The only tax I pay to an MD county is Personal Property for my house, but you said you won't be buying one of those. If you're on the short-term trip to retirement, MD might be fine for you. It's sure got plenty of places for you to keep the boat.

Didn't we just have a similar discussion for Greg?
 
VA personal property taxes can be high but it has a limit of $2,000 tax when you buy the boat. In addition some counties have set the tax rate on boats so low there is no tax. They do this to attract boaters for the economy. Prince William County Virginia is one with no boat tax. I don't know about Fairfax. Maryland has no personal property tax on boats but it does have a 5% one time titling fee.

Stay away from counties like Westmoreland County VA as they do have a high tax.

If I was going to keep my boat in the DC area I would look around Occoquon in Prince William County. It is about 15 miles outh of DC and lets you get up to DC or gives you a head start on going further down the river to where there is real water or to the bay. Unfortunately until you get down to Fairview and really past the 301 bridge the Potomac is pretty skinny for a 45 foot boat. If I didn't mind paying the one time titling fee then my first choice would be Maryland on the bay near Solomon's Island or Herring bay/Deale
 
BTW VA personal property taxes in counties that have an effective boat tax run around 5.4% of assessed value. The key is assessed value. Historically they have assessed low enough to make the real rate around 2 to 3% of real value but with the crash f the boat market assessed values and real values have moved closer together.
 
What squber said. I keep my boat in Prince William County, VA. No property tax on boats. VA has 2% sales tax with a $2,000 cap. So, anything from 100K up has a sales tax of $2,000. VA also has less overall taxes on non-boating related. Maryland is one of the highest taxed states, but you are accoustomed to that in CA. I think NY, MD, and CA are all near the top overall taxed states.

If you go to VA, and your boat is worth a lot, choose your boat's county carefully.
 
The 5% tax in MD is not a "titling fee". It is a sales tax, the same sales tax that is collected on anything you buy in MD. The difference is in the collection process. For most items you pay the 5% at the point of purchase. For motor vehicles and boats it is collected at the time the vehicle or boat is registered in MD. The Title Fee is a whooping $2.00 and the 2 year registration is $24.00 (not $32 as I previously advertised).
 
If you bought the boat in VA and paid VA sales tax then moved it to Maryland say a year or two later, would they still assess the whole 5%?

Unfortunately the biggest pay out for me and my wife is in income tax. The fact that we have no children and no other real deductions kills us every year.
 
j..
No, you would not be taxed another 5%. If you provide documentation that you paid 5% tax or more to another state you would not be assessed any tax in MD. If your documentation shows that the tax paid was less than 5% you may be assessed to pay the difference or a portion of the difference.
 
Mike - Sales tax in MD is up to 6% now. You must not buy much stuff here. :-)
 
If you paid the 2% boat sales tax in VA, and then moved to MD, then MD will charge you the differnce, which is 3% .... or is it 4%? (I hadn't heard MD is up to 6% sales tax now).
In other words, MD will "credit" you any amount paid in another state, but hey want to make sure you end up paying at least 5% (or 6%?) in total.
 
Kurt...
Oh, damn! No, I don't buy much stuff in MD (Middletown, DE is just 20 miles away). The Admiral, however........ ;)
 
To me, the issue bigger than tazes is where you want to boat and a house location that minimizes your commute time. Personally, I think the bay is much better boating environment than the potomac (sorry for offending you river people). And if you are going to boat on the bay, I would find the commute to get to my boat to be too long to live in VA or DC. If it were my decision based on your circumstances, I would pick somewhere around Severna Park. But those are just my opinions and priorities.
 
Va doesnt tax any of the military retirement from what I remember.

Having lived in both states I'll just say this: Virginia has police and State police officers. Maryland has Gestapo and KGB...
 
Paul

that is what I meant by "VA you get something for all that tax, not so much in MD"

I grew up in PG county, and was constantly stopped for "checks"...finally those checks stopped after 3 years when they pulled my Dad over - he was driving my car Christmas Eve and they thought they had me...for bad tailight section...
 
MD county taxes, city taxes in some locations, and special tax district taxes in some locations are paid when you pay your state income taxes. Tax percentage varies by county. Look at a state tax form to see what the percentages are. They are typically about 50% of state tax amount.
 
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