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2510-2517 Special Collection Procedures: Vessel

2510. GENERAL INFORMATION 
Vessel property tax, when unsecured, must be paid to renew vessel registration, which expires on December 31st of every odd-numbered year (biennial renewal fee) and must be renewed on or before midnight of that date to avoid a 50% penalty.  Renewal billing notices are mailed by the Department of Motor Vehicles (DMV) approximately 60-90 days before the expiration date.  A vessel must be located in California to be renewed.  Vessels (boats) assessed by July 31 are delinquent August 31 at 5 p.m.  Vessels assessed after July 31 become tax-delinquent at 5 p.m. or the close of business, whichever is later, on the last day of the month after the month in which they are enrolled.

2511. PROGRAM DEFINITION AND PERTINENT LAWS
The tax-delinquent vessel program is administered by county tax collectors in cooperation with the DMV.  The program is primarily aimed at reducing the high rate of unpaid property taxes attributable to unsecured boat assessments.  The county tax collector may, within 30 days after the delinquency date, begin standard county delinquent property tax procedures; and the renewal of the certificate of number of, and the transfer of any title to or interest in, that vessel will be withheld by the DMV, as provided in Vehicle Code section 9880, until the delinquent taxes have been paid on the vessel (Rev. & Tax. Code §3205).

If the county tax collector has given written notice of the delinquency to the assessee, pursuant to section 3205, written notice must be given, by electronic transmission or otherwise, to the DMV for recordation, pursuant to Vehicle Code section 9880.

Under Vehicle Code section 9880, the DMV must not renew or transfer title to or interest in a vessel if the county tax collector has notified the DMV that taxes for the vessel are delinquent.  The DMV will record the notice of delinquent taxes on the vessel.  After the delinquent taxes have been paid or the delinquency is otherwise satisfied, the tax collector will issue a Vessel Tax Disposition (BOAT 120) form to the vessel owner or update the department’s vessel record and remove the vessel tax hold.  If a vessel is transferred, or not renewed for 26 months, the DMV must notify the county tax collector (Veh. Code § 9880). 

Upon receiving a possessory lien sale application file with respect to a vessel, pursuant to subdivision (a) of Harbors and Navigation Code section 503, the DMV shall, in accordance with paragraph (4) of subdivision (b) of that section, notify the applicant of any outstanding property tax lien on the vessel of which the department has been notified.

2512. TAX COLLECTOR'S NOTICE TO TAXPAYER
A county tax collector may provide written notice, within 30 days after tax delinquency, to all owners of property-tax-delinquent vessels that renewal of the certificate of number issued by the DMV will be withheld until the delinquent taxes for the vessel have been paid (Rev. & Tax. Code §3205).  Form SCO 2-23 should be used.

NOTE:  Do not request that the DMV withhold renewal of the certificate of number unless a written notice has first been mailed to the assessee.

NOTE:  A "blanket notice" printed on the annual county property tax bill does not constitute adequate notice of delinquent vessel taxes to the assessee.  Form SCO 2-23 is recommended.

2513. NOTICE OF INTENT TO SUBMIT TAX-DELINQUENT VESSELS DATA
Interested tax collectors must first notify the DMV of their intention to participate in the program by preparing a Notification of Intent form. 

One of the three following forms, corresponding to the method to be used when transmitting tax-delinquent-vessel information to the DMV, should be used.

1) Notification of Intent to Submit Tax-Delinquent Vessel Data by Hard Copy Manual Abstracting (DMV form BOAT 114 -- This form can be obtained by calling the DMV's Registration Abstract section at (916) 657-6893.  It should be submitted 30 days prior to implementation.

Two additional forms are provided by DMV:  (1)  form BOAT 119, used for Notice of Delinquent County Vessel Tax, and (2) form BOAT 120, Vessel Tax Disposition, which informs the DMV of actions taken in the county, releasing the withholding of registration.  Technical questions regarding the implementation of this program may be directed to the DMV's Registration Abstract section at (916) 657-6893.

2) Notification of Intent to Submit Tax-Delinquent Vessel Data Via Magnetic Tape (DMV form BOAT 115) -- This form can be obtained by calling the DMV's EDP Staff Support section at (916) 657-6739.  It should be submitted 30 days prior to implementation.

3) Direct Access/Update (DA/U) Application -- This form can be obtained by calling the DMV’s Vessel Unit, Justice and Government Liaison Branch, at (916) 657-7732.

2514. TRANSMISSION OF TAX-DELINQUENT VESSEL INFORMATION TO THE DMV
Transmission of the tax-delinquent vessel information to the DMV causes the DMV to withhold renewal of the certificates of number of those vessels.

Transmit delinquent vessel information to the DMV by the method agreed upon when the Notification of Intent was completed (see M-2513).

The DMV typically mails its renewal notices in October, but it may mail printed notices much earlier.  Depending on your method of notifying the DMV, your notice of delinquent vessel taxes may not be processed and recorded on the DMV's database for several weeks.  Therefore, the notice of the stop on the vessel renewal may not be printed in time to notify the assessee that a hold has been placed by the county tax collector.  However, input may be transferred to the DMV at any time during the year to achieve a stop on renewal of a certificate of number, and the tax collector's notice will be recorded in the DMV database.  In such cases, the DMV will include a statement on the next renewal notice to the assessee that, because of delinquent property taxes, renewal will be withheld.

2515. REPORTS TO AND FROM DMV
For input to the DMV, report the last name first.  If the last name is comprised of fewer than five letters, leave a blank space between the last name and the first name.  Do not leave blank spaces in names such as "Mc Hale."  Eliminate apostrophes from names such as "D'Amato;" doing so is especially important if magnetic tape is used as the input method.

1) Matched Records – Matched records do not result in a report from the DMV until the stop created is deleted from its record, as specified in the DMV's deletions report.

2) Update Errors Report (unmatched records) – After input processing, unmatched records result in a DMV report entitled "Update Errors," indicating requests for withholding certificates of number that do not match the DMV records.

NOTE:  Three fields where mismatches commonly occur are county code, vessel number, or positions of the first five letters of the name.

When the county code causes a mismatch, the DMV prints the county code number from its file on the update errors listing. Contact either the assessor or the tax collector of the other county for a current address or for assistance in collecting the delinquency.

3) Deletions Report (transmittal of deletions) – The DMV sends a listing of delinquent vessel stops that are being deleted when one of the following conditions occurs:

a. Vessel ownership is transferred (change of ownership);

b. Vessel registration is not renewed for 26 months.  However, the stop request may be resubmitted after receiving the deletion report, identifying removal of a stop because the time period has elapsed; or

c. Clearance is received as evidence of payment or cancellation of the delinquent tax. The DMV removes the stop and renews the certificate of number by accepting from an assessee evidence of satisfaction of delinquent taxes (form BOAT 120).

2516. REMOVAL OF STOP (WITHHELD RENEWAL)
The tax collector must provide notice to the DMV when the delinquency has been paid or canceled. This should be done at least once a week.

Transmit vessel tax disposition data to the DMV by one of the following methods:

1) Hard copy (manual abstracting) – Use form BOAT 120 in all cases where hardcopy input has been the method of data input to the DMV. Use hardcopy for small volume transmittals also, such as occasional over-the-counter transactions, even though the agreed-upon transmittal method with the DMV was either magnetic tape or direct electronic access. Form BOAT 120 is a three-part form:  send the original copy to the DMV, give the second part to the taxpayer, and retain the third part for your records.

2) Magnetic tape – If data is transmitted to the DMV by magnetic tape input, use tape to report vessel tax disposition, unless the small volume of such transactions warrants using form BOAT 120 (hardcopy).

3) Direct access update – Like magnetic tape input, this is one of the principal methods of input to the DMV, but it can be supplemented with form BOAT 120.

2517. PAYMENTS TO DMV FOR WITHHOLDING OF VESSEL INFORMATION
The DMV charges one dollar ($1) for each record successfully matched when placing the stop. With hardcopy and magnetic tape procedures, there is no charge for removing a stop or for attempts to match records. The DMV bills the county monthly, normally the month after the month when the stop is requested and completed.