[K1W1]

Originally Posted by captbh

It's not that the books were cooked, it's that the politians were........ well.... you know

The Cooks?

[Barin]

Originally Posted by Neil1

Hi team.
Little Aussie here dreaming of bigger things have found a few
US boat brokerages who in there advertisements quote
"vessel is not available to US residents while in US waters".
I suspect this is to do either with some kind of tax duty.
Just curious and would like an explanation.

Thanks all neil.

Neil, clearly this thread became very technical and for some reason commercial yachts fell into discussion.

For clarification purposes: Assuming you live in Australia, you are free to purchase these boats, but more importantly, you are free to board and inspect them with the intent of purchasing it while they sit in US waters. The disclaimer you read does indeed refer to a vessel that has not paid US duties. For your purpose you can purchase the boat and either foreign flag it then get a cruising permit to use it in US waters or simply export the boat to wherever you wish. This is entirely separate from the State Sales Tax which varies greatly from state to state. **Recently the State of Florida passed an $18k sales tax cap**

Typically most foreign built boats that are imported into the US through a dealer will have paid the duties upon entering because the duties will be calculated on the manufacturer's proforma invoice (dealer cost) less all parts and equipment that were built or sourced in the states (to avoid double taxation). If the boat comes is to be imported to the states at any point thereafter then it will have to pay duties on the then assessed retail value.

[captbh]

Originally Posted by Barin

Neil, clearly this thread became very technical and for some reason commercial yachts fell into discussion.

For clarification purposes: Assuming you live in Australia, you are free to purchase these boats, but more importantly, you are free to board and inspect them with the intent of purchasing it while they sit in US waters. The disclaimer you read does indeed refer to a vessel that has not paid US duties. For your purpose you can purchase the boat and either foreign flag it then get a cruising permit to use it in US waters or simply export the boat to wherever you wish. This is entirely separate from the State Sales Tax which varies greatly from state to state. **Recently the State of Florida passed an $18k sales tax cap**

Typically most foreign built boats that are imported into the US through a dealer will have paid the duties upon entering because the duties will be calculated on the manufacturer's proforma invoice (dealer cost) less all parts and equipment that were built or sourced in the states (to avoid double taxation). If the boat comes is to be imported to the states at any point thereafter then it will have to pay duties on the then assessed retail value.

Barin,

You are incorrect about the thread involving "commercial" yachts.

All of the "technicalities" we are discussing apply to private yachts that are foreign flagged. An owner operated 50 ft Sea Ray with a Cayman Flag must comply with the same CBP reporting procedures as a 200 ft Fedship. If the owner-operator buys a 100 ft or 100 ton yacht (which is not uncommon these days) there are additional rules if it is foreign flagged.

Neil's question was answered within the first few posts. The additional information is supplied so that if he should buy a boat and decide to cruise around in this country at some point, there are "technicalities" that have to be dealt with on a foreign flagged boat, even if it is small and private.

[boblucas]

Originally Posted by Neil1

Hi team.
Little Aussie here dreaming of bigger things have found a few
US boat brokerages who in there advertisements quote
"vessel is not available to US residents while in US waters".
I suspect this is to do either with some kind of tax duty.
Just curious and would like an explanation.

Thanks all neil.

A foreign flagged yacht can be shown in U.S. waters if the owner gives up use of the vessel and places it in the care, custody and control of the broker.

"Care, custody, and control" by a licensed Florida broker satisfies the State of Florida for "use tax" but does not relieve the owner from paying import duty to US customs, allowing a foreign built and foreign flag vessel to be sold to a US resident while in US waters.
If the foreign flag yacht was built in the US, the yacht can be re-imported as US built returned goods, with the payment of only a small fee. Then it can be sold to a US resident in the US.

[ThirdHatt]

Originally Posted by yachtbrokerguy

If the foreign flag yacht was built in the US, the yacht can be re-imported as US built returned goods, with the payment of only a small fee. Then it can be sold to a US resident in the US.

Tucker, would such a vessel have an obligation to prove that sales tax was paid on it? If a vessel is built in the U.S., but delivered new outside of the country and foreign flagged could it be returned years later as U.S. built returned goods with only the payment of a small fee?

Sales tax is a state issue and is treated differently by different states. We call it sales tax but most state laws refer to it as sales AND USE tax. New Hampsire and Rhode Island have no sales tax, other states have low taxes and high annual property taxes, Florida now has a $18,000 maximum tax, it varies fron state to state.
Florida does not require proof that you paid tax on the boat in some other jurisdiction when you bring it to Florida, as long as you have owned the yacht for more than 6 months, the owner had no intent to use the boat in Florida at or before the time of purchase (hard to claim for a Florida resident), and that the vessele was in a taxing jurisdiction of some US state or territory for at least six months.
I am not a tax attorny or CPA and would suggest confirmation from the Florida Department of Revenue, boat division. I have a contact number and person to talk to who is "boat industry friendly" send a PM for that contact info.

[DYS]

All vessels, not built in the US must have import duty (1 1/2%) paid to the US government to be offered for sale to US residents in US waters. This is paid once, and transfers to subsequent buyers, unless the vessel is sold to a buyer who registers outside of the US at any point. Then the duty becomes payable again. Us Built vessels are not subject to this duty, again, unless they are registered outside of the US.
If a US resident purchases a boat that has not had the import duty paid -only an offshore purchase is legal, He must then pay the import duty if he wishes to register the boat in the US. Or he can register the boat outside of the US and must enter US waters under a cruising permit.
A US flagged vessel can remain outside of US waters, and not be responsible for the import duty. However, any vessel owned by a US citizen, and US flagged , must pay the import duty upon entering US waters.
This is the same principle as if a US citizen went to a foreign country, bought and expensive Rolex watch, and then brought the watch into the US - Import duty is due immediately on the watch upon entry.

[K1W1]

Originally Posted by DYS

This is the same principle as if a US citizen went to a foreign country, bought and expensive Rolex watch, and then brought the watch into the US - Import duty is due immediately on the watch upon entry.

Hi,

All very well in theory but, in reality how many folks who buy expensive items of jewellery and watches like that actually declare them on return to their home bases?

The percentage would probably be very small indeed.

It is just a natural human trait to try and stiff the authoritarian figures whenever possible.

[Pascal]

"This is paid once, and transfers to subsequent buyers, unless the vessel is sold to a buyer who registers outside of the US at any point."

this has not been my experience. Once a vessel has been imported and the duty paid, US custom will not impose duties against even if at some point the vessel was foreign flagged.

"Us Built vessels are not subject to this duty, again, unless they are registered outside of the US."

Customs duties are charged based on country of origin, i'm not sure how duties can be imposed on a US manufactured product, even if the vessel was foreign flagged for a while.

[Badger]

1.5% is nothing compared to the 9.5% sales tax here in Washington. I need to talk with a tax expert, but what would preclude someone from listing their homeport in an area with lower sales tax rate? When I registered my autos, all I had to prove was proof of ownership in my previous home state for over a year.

Heck, could one homeport a boat in Oregon for a year, actually keep it their and registered for a year. No sales tax..

[NYCAP123]

Originally Posted by Badger

1.5% is nothing compared to the 9.5% sales tax here in Washington. I need to talk with a tax expert, but what would preclude someone from listing their homeport in an area with lower sales tax rate? When I registered my autos, all I had to prove was proof of ownership in my previous home state for over a year.

Heck, could one homeport a boat in Oregon for a year, actually keep it their and registered for a year. No sales tax..

If you live in Oregon, go for it. If you live elsewhere and don't fear the wrath of the IRS or your state's tax man or the words "filing a false document" go for it. In all tax matters it's a very good idea to consult a good tax man. There are stratergies that work and others that throw up big red flags.

[homer1958]

Can anyone in a an outline format tell me the advantages to selling your US made documented vessel with DHS to a corporation one establishes in the BVI?

Advantages, disadvantages, and other paperwork "navigational shoals" concerns and recommendations?

[K1W1]

Originally Posted by homer1958

Can anyone in a an outline format tell me the advantages to selling your US made documented vessel with DHS to a corporation one establishes in the BVI?

Advantages, disadvantages, and other paperwork "navigational shoals" concerns and recommendations?

Hi,

I am assuming that DHS is Department of Homeland Security.

What do they have to do with vessel registration?

I am also assuming you are looking at changing the "ownership" on paper but not in reality.

Will you be traceable as the beneficial owner of the afore mentioned BVI Company?

Will you want to keep your vessel in the US and continue to use it as you do right now?

[homer1958]

Not sure.... just wondering about it for a technical standpoint. All USCC docs are now under the auspices of DHS. Just an intellectual inquiry basically.