Sales taxes & Ownership

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I wanted to go back to some previous comments which sounded like if a foreign vessel (on a cruising permit) stays in WA or CA, that there are State cruising fees due.

Obviously the foreign vessel is exempt from sales or use tax, but this permit requirement sounds strange and I wanted to clarify.
 
We ran into tax issues when we were buying our boat in FL and moving it to our home in NC, which has a much lower sales tax. Our broker said we had to hold settlement 3-15 miles offshore in order to avoid paying FL sales tax, depending on which coast it was. However, since we were buying the boat directly from the owner, no sales tax was required! We verified by calling the FL taxation office. Anything bought directly from owner is processed as if it's bought at a garage sale, no sales tax to pay. Saved us going offshore for a complicated settlement.
 
In Massachusetts you must own a vessel for 6 months in another state before you can bring it to MA with no sales tax. Maybe he did not do that? I am surprised they would just impound the boat and not give him a chance to pay the tax and/or registration? ...

Maybe they did contact the owner but I did see the placard similar to the one below. When they stickered the boat, it was on the hard for the winter down the Cape.

Maybe impounded was the wrong term? :)
 

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any Alaskans with knowledge? buying in WA have any advice? We plan on registering the boat in Alaska but not sure where we are putting up end of next season.
 
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Give a call to Marine Documentation Service in Anacortes. We bought a boat in Alaska as Washington residents and sold a boat in Florida to Washington residents. Brokers were not involved in either transaction. There was good advice given on both transactions.

https://www.marinedocservice.com/
 
the issues of sales tax, use tax registration could be a profitable business for someone. If I have a boat built in FLorida and live in California and use it in Maine, for example, what would be the best strategy..
or have a boat built in New Hampshire, use it in Maine and California alternate seasons, where should I take delivery and register it and pay tax..
taxes taxes.
 
Maybe they did contact the owner but I did see the placard similar to the one below. When they stickered the boat, it was on the hard for the winter down the Cape.

Maybe impounded was the wrong term? :)

Only one worse is the u.s. Marshall sticker lol.
 
I'd be interested to hear how you handle year round mooring in Point Roberts. My understanding of the WA rules is like DDW's. The WA extension permits can get you up to 180 consecutive days, but then you need to be out until 1 years from your entrance date.

As for US boat in Canada, it's done just as you described. They can stay for up to a year, but then need to leave and re-enter to restart the clock. This is exactly why so many US boats stay in BC - to avoid the WA taxes.

I’m looking for the regs on this got any Canada ���� links?
 
I used Connie Crews at All Yacht Documentation. I wanted an Llc and she worked with an excellent fast attorney. She was the best. The lawyer had definite opinions on which states were best to have our boat licensed and which states to register our boat.

I couldn't believe how inexpensive it was to hire professionals. She will be the first person I call when I have another boating transaction. Her phone, 386 462-1144 and her email is connie@allyachtdoc.com
 
A famous quote on Tax Minimisation by the Late Kerry Packer.

tax-1351881_1280-1520151823.png

Kerry Francis Bullmore Packer AC has famously stated.
‘I am not evading tax in any way, shape or form. Now of course I am minimising my tax and if anybody in this country doesn't minimise their tax they want their heads read because as a government I can tell you you're not spending it that well that we should be donating extra’


The late Kerry Packer was a media mogul in Australia. He sold his TV empire to Alan Bond(winner of the Americas Cup) for a huge amount and when Bond went broke bought it back for peanuts. A tough financial wizard but no match of the Nuns who ran St.Vincent's Hospital when they were seeking donations. After his life was saved by a defibrillator in the 1990s he donated a defibrillator to every ambulance, they were known as a "Packer Whacker". Generous to a fault to those he liked, but he didn`t like paying tax
 
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I’m looking for the regs on this got any Canada ���� links?

Easily found with Google. Look here.

"Baggage and conveyances temporarily imported by non-residents of Canada may remain in Canada duty and tax-free until the expiration of the date they intend to leave Canada or 12 months after the date of importation."

This second bit seems to be rarely done:

"Boats imported strictly for repair or storage, or those remaining in Canada for storage purposes in the off-season, should only be documented on Form E29B. If used, the Form BSF375 will be endorsed "for repair only." A copy of the work order from the repair facility must be attached to the CBSA copy of the Form BSF375 or the Form E29B. Both these forms must show an expiry date and indicate the location where the unit is authorized to remain while being repaired or stored."

I never did that and nobody - not the marina office, not the customs office - seemed to have heard of it.
 
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the issues of sales tax, use tax registration could be a profitable business for someone. If I have a boat built in FLorida and live in California and use it in Maine, for example, what would be the best strategy..
or have a boat built in New Hampshire, use it in Maine and California alternate seasons, where should I take delivery and register it and pay tax..
taxes taxes.

You are correct, it could be a great business. However, when you say you have a boat built in Florida, this alone could change the tax status as the boat is sold new in Florida. Hawaii would require Sales tax on new, no tax on used sale. I really don't know what Florida's status is here. Every state has its own complicated taxing formula. Every state will be different and then throw in if you are going to permanently moor in a state vs cruising status will complicate the matters as each state treats this differently. If you are purchasing a boat somewhere just to avoid taxes, this might impact how you can use the vessel. Figure out how you want to use the vessel then look at how you might reduce your tax exposure the best you can. Back in the 70s people would document in Puerto Rico or American Virgin Islands to avoid taxes. Don't know now if that is still a valid way to avoid taxes or not but each transaction is unique and there is no way you can say a blanket way to do it will work in all states and all situations. You have to abide by the laws of the states involved and use any loopholes they provide.
 
Different states have different tax requirements. For example, Hawaii has no "Use" tax or personal property tax but does have Sales tax. California has both sales and use plus personal property taxes. So, if you buy a used car (or boat) in California, but don't register it in California (totally legal), you can ship to Hawaii and pay no tax other than registration. Same if you buy a used boat or car in Hawaii, no use or sales tax is required, only if it is new. Where if you buy and register in California there is a Use tax and personal property tax on used cars, boats, planes etc. You really have to understand the taxing laws of the state or states you are dealing with. Obviously, the previous posts point this out. LLCs do, or can, have issues when traveling to other countries, at least I have seen in aircraft. This has to do with proving the captain has authority to take the boat out of the US. It's just more paperwork but you have to check to make sure you can prove you have the authority. I am assuming that this transfers over to boats but again depends on the country and its laws. I don't think an LLC in California is going to help you in your tax debt to California, but it may in other states. There are so many tax avoidance issues with the Feds and different state, you really have to be up on them. At one time you could buy a railroad car and get all kinds of tax write offs but that is defunct now. As soon as the govt kills one tax write off, another one appears. Many times they follow the "Law of unforseen consequences" LOL!
I have a boat registered in Langkawi, Malaysia which I plan to bring to the US. My residence is in North Carolina but as a non-US citizen, I cannot register boat with US CG. My question relates to usage tax in NC where the boat would be less than 3 months....would any tax be due in that case. Thank you.
 
I have a boat registered in Langkawi, Malaysia which I plan to bring to the US. My residence is in North Carolina but as a non-US citizen, I cannot register boat with US CG. My question relates to usage tax in NC where the boat would be less than 3 months....would any tax be due in that case. Thank you.
As has been pointed out many times, but it bears repeating. USCG documentation is not registration. It is title to the boat in place of state title. Title defines who owns the boat. Registration who operates the boat. Not all states require state registration if the boat us USCG documented. Not all states tax boats the same. Generally sales tax is a one time event for each owner paid when the boat is purchased or brought into the state. Taxes paid, if any, at annual registration vary state by state and are called different things state by state. Bet to get your answers from a knowledgeable source not the internet. Your state's authorities or a reputable marine documentation service would be two place to ask.

Next you may be paying import duties depending upon where the boat was built and it's history.
 
I have a boat registered in Langkawi, Malaysia which I plan to bring to the US. My residence is in North Carolina but as a non-US citizen, I cannot register boat with US CG. My question relates to usage tax in NC where the boat would be less than 3 months....would any tax be due in that case. Thank you.
You have a number of issues that don't apply to what we have been talking about. 1. are you permanently importing this vessel? 2. Are you just going to be a visiting vessel from a foreign state? If you are permanently bringing in a foreign vessel you will have to declare it and pay duty. Then you can register with any state that you chose. Say you import to NY harbor, you don't have to register as a New York vessel. You could register it in your home state, the state it is going to reside the most or any other state that allows vessels to be registered without physically seeing the vessel. Example, many sea going vessels are registered in Arizona obviously having no ports. As noted in above post, state registration is not CG documentation and a foreign vessel with a foreign owner in the state should be able to register the vessel, but you have to check the requirements of the state you wish to register. Just a note, a foreign built vessel can now be documented as a pleasure vessel with the CG but I have no idea about a foreign owner. Possibly here a LLC could be applicable but you would have to talk with a documentation expert about that.
If you are just bringing in a foreign vessel to visit you will be treated like the Canadian vessels visiting the US. That is a totally different situation that I am sure our Canadian boaters can update you about the latest requirements. My guess by your post is that you wish to import the vessel permanently which is a whole different process
 
I have a boat registered in Langkawi, Malaysia which I plan to bring to the US. My residence is in North Carolina but as a non-US citizen, I cannot register boat with US CG. My question relates to usage tax in NC where the boat would be less than 3 months....would any tax be due in that case. Thank you.
I’d suggest you contact a customs broker who knows boats. Such as Home - Howard S Reeder Inc
 
Agree with Sealionhaving a pro in your corner is always helpful. But would note on several occasions have “imported” a boat. Need depends usually on length of stay and country of flag. I did not use any professional help importing a US flagged vessel into BVI. I was in and out of BVI frequently so being imported saved me money as I came and went.
You haven’t told us several important things.
Are you a long term resident of the US? If so under what designation?
Is this boat only going to be used in US waters after its arrival?
How is the boat currently owned? By you as an individual or inside a trust,LLC or other form of ownership?
Who is going to insure the vessel? The underwriter may limit their market depending upon form of ownership and flag. Ran into this with Pantaenius when they withdrew from the US and spinned off a US company and the Compass special risk who was limited to US flagged returning to the US once a year.
Usually your goals are to pay the least taxes and have the least liability exposure. All that depends on where it’s flagged, who owns it, where it’s going to be used and what degree of exposure you are comfortable with . You can manipulate these variables and stay well within the law. It’s here you can either self educate or be conservative and seek expert advice. Would have all my ducks in order before acting. . Would not depend upon internet advice as devil is in the details. Would want advice. Examples- Can you form a US company in a US state like Delaware to own the boat then flag the boat US but registration in your home state if necessary. I don’t know the law nor details .
 
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I am retired. Looking to buy a boat and live full time traveling the U.S. inland waters on the eastern side. My intent is to stop at different places see the sights and move on. Not staying any one place more than 60 days.
Where would be a good place to register the boat and tender taking into consideration of Taxes and fees, Insurance and the fact I may not be in that state but once every few years?
Any input would be welcome.
 
any Alaskans with knowledge? buying in WA have any advice? We plan on registering the boat in Alaska but not sure where we are putting up end of next season.
We bought our boat in WA 2+ years ago and brought it to AK where we live. We kept the boat in Anacortes for about 6 months before running it to AK. Ordinarily that would trigger the WA tax but there is an exception if you’re keeping it in WA to have work done on it. We had it on the hard in a boatyard and got a letter from the yard saying they were doing work on it (which was true). We had to file a form reporting this to the State of WA, and then some kind of renewal every 90 days (if I’m remembering right) to keep the tax exemption. I spent a lot of time reading up on this on the State of WA website, and was able to file all the forms electronically or by email. It’s a bit complicated and you don’t want to miss any of the deadlines, or you might be stuck for the tax. But their website explains it fairly well.
 
I am retired. Looking to buy a boat and live full time traveling the U.S. inland waters on the eastern side. My intent is to stop at different places see the sights and move on. Not staying any one place more than 60 days.
Where would be a good place to register the boat and tender taking into consideration of Taxes and fees, Insurance and the fact I may not be in that state but once every few years?
Any input would be welcome.
Have you decided where you will establish residency?
New Hampshire doesn’t have any sales tax, but registration fees might be high. And I don’t know if they require registration of documented boats. Rhode Island is another boater-friendly state. Florida has a tax, but it is capped so depending g in the boa value it can be a bargain.

There are also inland states that I believe a tax friendly. I see a lot of Colorado and North Dakota boats, which I take as a hint.
 
Virginia sales tax on watercraft;

What is a "watercraft?"​

  • Any vessel propelled by machinery whether or not the machinery is the principal source of propulsion; or
  • Any sail-powered boat over 18 feet long measured along the centerline.
Not included in the definition of “watercraft” (for the purpose of this tax):

  • Seaplanes
  • Any vessel with a valid marine titling document issued by the United States Coast Guard.
  • The kicker is the vessel must be documented with a valid document. When a boat is sold the document is considered invalid until the CG issues a new document. In Virginia counties can set their own property tax rates, with an assessment on January 1st. Many boaters leave Virginia in December to avoid the local tax, returning in the spring
 
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