If your not able or prepared to pay the taxes on your winnings then don't enter. Everyone should know going in that they will have to pay some serious taxes on winnings.

agreed

Well I'm a Texan as well. And I can tell you that if you have to claim income on a 1099 in Texas, expect to pay 25%-28% in taxes. So if you win a boat valued at $40,000 , the IRS will consider that $40k as earned income and you will be taxed 25%-28% on that. So you would be looking at $10k-11k in taxes.

Now if you're a hardcore tournament angler, a lot of that could be absorbed as tax deduction. But if you're just the occasional tournament angler who does a few a year, you're not going to have a whole lot to deduct and therefore expect to come up with some cash.

hmmm lets see here pay the 25-30% of fed taxes on the prize package or spend the current tax rate as well as the retail cost on the same prize i'd rather just pay the taxes and if i needed to take a loan out on the new boat/truck package or whatever it may be and pay the taxes off and then pay the boat off slowly but surely and most also have a second boat then which essentially should beable to pay the owed tax amount if needed

"spend the 25-30% as well as the retail cost"

Unless I misunderstood your post, it wouldn't work that way. If you win the boat, you file a 1099 and pay 25%-28%. If you were to purchase that same boat, you would pay retail plus 6.25% in sales tax (plus title and license).

6.25% isn't the sales tax rate everywhere, it is different county to county

When you get a 1099 you have to pay income taxes on it. I hope you are also listing all your fishing expenses too as those are right offs against the profits you made.

Also you might ask that the TD or the association give you a 1099 on the average cost of the prize or check with boat deals in your area and have the 1099 adjusted to reflect the real cost of the prize. The IRS will allow changes to reflect real costs if you can show them the difference.

You are in CA and so it may be different there than here. If a person registers a boat in Texas he must pay for the state sales tax when registering the boat. If he wins a boat certificate he is supposed to pay the state the sales tax before the sale and then the new owner will pay again.
Thats the way it was explained to me by the TPWD office in Ft Worth but that was in the early part of this century.

6.25% is the State Tax Rate. You don't pay County taxes on boats or autos. If you did it would cheaper to buy boats (for example) in Tarrant County than Dallas County. So the 6.25% tax rate is the same at all dealers in Texas.

It's not the sales tax that hurts you, it's the earned income. If you win a boat it's just like winning the lotto. It's earned income and no matter what state/county you live in you owe the IRS 25-28% on that earned income period.
If you make 100k a year at your regular job and win a boat valued at 40k the IRS looks at it as you made 140k that year.
You better be prepared to pay the 25 or so % on that extra 40k you just won.

Paying $10,000 in taxes and sales tax is still cheaper than buying the boat outright; but if you sell the boat do you pay the income tax twice? Meaning you pay the IRS $10k for boat valued @ $40K, then sell boat for $30k are they gonna tax at $70k?

The IRS are a bunch of blood sucking criminals.

I'LL worry about winning the boat first.

no, if you sell the boat for less then the value then you can claim a loss