importing boat to Canada from Michigan by water

[Capt Kangeroo]

I am currently buying a boat and the Broker seems intent on charging me the 6% state tax. Were it true I'll be retracting my offer. With 13% Canadian tax added in, that makes 19% over and above the purchase price. Thank god the boat was made in the USA or I would also be hit with 9% import tax for a breathtaking total tax of 28%

Can anyone advise if foreign (ie:Canadian) buyers have to pay state sales tax on boats they are exporting out of the USA. I know in Florida you have a 60? up to 90 day exemption to remove the boat from Florida or you get stuck with the tax. (Been there stung by that), lots of Florida info available but I have scoured the internet and was shocked to find very little information either official or otherwise on Michigan's handling of taxes as they apply to foreign buyers. Considering we are so close here we could throw rocks at each other across the border, I would have thought the flow of exported boats toward Canada would have been immense.


Any help much appreciated

 

[Raylee]

Two years ago, my cousin who lives in Canada bought a boat in WA. He presented his BC drivers license to the closing company and no tax was paid in WA. Of course he paid the 12% tax when he took the boat to BC. I remember he had to take the boat out of WA inside 45 days to avoid WA taxes.

Neither the broker nor the closing company charged any tax.

Hope this helps.

 

[Comodave]

I looked at some Michigan instructions for dealers and found a 15 day exemption for boats being taken out of state to another state, guess Canada would be similar. It doesn’t really address sales tax but if it isn’t going to be registered in Michigan then no Michigan sales tax would be due. Hope this helps.


DEALER 15-DAY IN-TRANSIT PERMIT – $10 [MCL 324.80124]
A 15-Day In-transit Permit (form WR-16) is available for Michigan watercraft dealers. The in-transit permit allows an out-of-state purchaser (nonresident) to transport a new or used watercraft by water to their home state for registration. The in-transit permit cannot be used for watercraft transported by trailer.
The 15-day in-transit permit is issued only by Michigan watercraft dealers. Secretary of State branch offices are not involved in supplying or issuing the permit. Dealers purchase their supply from:
Michigan Department of State Special Services Branch Lansing, MI 48918-1570
(517) 636-5872
There is a $10 fee for each permit purchased by the dealer. Checks or money orders should be made payable to the State of Michigan.
To issue the permit to a nonresident purchaser, type or print all of the information required. Both the dealer and the purchaser sign the permit. The permit is not validated at a Secretary of State branch office. Simply issue the top copy to your customer and retain the second copy for your files. The purchaser must carry the in-transit permit on the watercraft while in use (it does not have to be displayed).
Only one in-transit permit can be issued to a purchaser. It cannot be extended or renewed. Be sure to give the watercraft’s MCO or title to the purchaser, as they will need it to title and register the watercraft in their home state.

 

[Jeff F]

I looked at some Michigan instructions for dealers and found a 15 day exemption for boats being taken out of state to another state, guess Canada would be similar.

Yeah, I think the export to Canada is not the issue, it's leaving MI with the newly purchased boat and not paying state tax.

I think it's safe to say that MI is known for being aggressive on collecting sales tax on boats. But I can't believe there isn't a mechanism that allows legitimate tax free sales to out of state buyers who are taking the new boat home.

I'd find out how someone from IL or WI would do it if they were sailing home. That must be a common occurrence, and I'd assume the same set of steps would apply to buying from Canada.

Is the broker really suggesting that there is no way to close on the boat without them collecting the sales tax? And they tell someone who lives in an adjoining state the same thing?



Sent from my moto g play (2021) using Trawler Forum mobile app

 

[Comodave]

It stands to reason that if you have 15 days to get the boat out of Michigan to take it to another state then it should be the same thing for Canada. Maybe the broker just doesn’t know what he/she is doing. Michigan is very aggressive in registration for boats that are here without a state registration somewhere.

 

[RT Firefly]

Greetings,
Mr. CK. Hand over the $$ and finalize the sale in Canada or in a neighbouring state.

 

[koliver]

I am currently buying a boat and the Broker seems intent on charging me the 6% state tax. Were it true I'll be retracting my offer. With 13% Canadian tax added in, that makes 19% over and above the purchase price. Thank god the boat was made in the USA or I would also be hit with 9% import tax for a breathtaking total tax of 28%

Can anyone advise if foreign (ie:Canadian) buyers have to pay state sales tax on boats they are exporting out of the USA. I know in Florida you have a 60? up to 90 day exemption to remove the boat from Florida or you get stuck with the tax. (Been there stung by that), lots of Florida info available but I have scoured the internet and was shocked to find very little information either official or otherwise on Michigan's handling of taxes as they apply to foreign buyers. Considering we are so close here we could throw rocks at each other across the border, I would have thought the flow of exported boats toward Canada would have been immense.


Any help much appreciated

Years ago we looked at buying a boat in California, to be returned with us to Canada. The broker offered out of state delivery, in order to avoid paying both California and BC sales tax.
Out of state delivery also worked when we bought Motorhomes, One in California and one in Arizona. The first Motorhome had to be driven across the state line to Arizona and the Arizona Motorhome had to be driven across the state line to California.
On entering Canada at Blaine, each attracted both Federal GST and Provincial Sales Tax. If you have HST, only that will be incurred.
If you can't get out of state delivery, you will be paying the State tax.