[hat4349]

I see this all the time in posting on Yachtworld and brokerage firms websites. Since the boats I have bought always have been in US waters I figure it probably has to do with taxes and/or laws governing safety etc... Can anyone provide specifics on this?

[clnewman]

I'm sure one of the brokers here can answer better than I. However, it's my understanding these vessels are typically foreign flagged, and no duty has been paid here in the US.

[C4ENG]

I believe it is to simply aviod the 6.5% sales tax?
That's a nice chunk of change on a 15 million $$ purchase...Well worth some fuel and time to skip over to the Bahamas..

[JWY]

It is not an issue of tax but of US duty. Foreign goods pay a duty upon arrival into the US. If a foreign flagged vessel comes to US and is for sale, the assessed duty is 1.5% of market value. If the owner does not want to pay the duty, then the foreign vessel can be offered for sale but not to US residents while in US waters. Therefore prospective clients must be non US residents or the boat is taken offshore for a showing. There is a "boat show" caveat; also NAFTA exempts boats built in Canada or other trade countries.

It is highly recommended that a customs broker be consulted for details and advice.

Judy Waldman

[YachtForums]

Good post Judy and a milestone... you just joined the YFAARP.

[brunick]

the what??

[hat4349]

I can see where at $15,000.00 per $1,000,000.00 of the sales price this could quickly add up so that part I understand. But is it good business sense to eliminate such a large portion of the market by making this statement, seems to me it would be better to make it a negotiable item. Or am I being overly simplistic?

I understand that if you have this kind of money running to the Islands for the yacht should not be a problem, but if I have this kind of money it seems I would want the convenience of having my yacht available anytime I want it by my primary residence. I guess I don’t deal in the high financial world to understand the complexity of this.

[YachtForums]

Google AARP Brunick.

[brunick]

you meant this AARP?

*lol*

[JWY]

Thanks, YF!

Hat4349: The issue of duty primarily comes up when a yacht is offered for sale. A foreign flagged vessel can cruise here under an annually renewable cruising permit. "Negotiating duty" isn't an option. If the seller wants to include the US market, then he pays the duty before he can offer it for sale. Brokers frequently recommend owners pay the duty, but it is sometimes difficult for an owner to lay out a chunk of money to increase the market potential when it does nothing to add to the value of the vessel as to equipment or appearance.

Judy

[hat4349]

JWY thanks for all the good information, now I understand a lot more about this and even feel I comprehend this duty business. I am probably really dangerous now.

[Loren Schweizer]

Happy Birthday, Judy!