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US yacht not for sale to US customers in US waters.

Discussion in 'General Yachting Discussion' started by Neil1, Jul 14, 2009.

  1. Neil1

    Neil1 New Member

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    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.
  2. K1W1

    K1W1 Senior Member

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    Hi,

    This is used when non US Flag vessels are shown for sale.

    You have correctly guessed the reason.
  3. PropBet

    PropBet Senior Member

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    Foreign vessel, advertised to US citizens through different channels or publications. Sake is typically consummated 3 miles off shore / outside of US Waters. And yes, taxes, or VAT is essentially the reason.

    Boat must stay off shore, unless of course you wish to flag it in the US and pay the VAT on it. (or enter temp. on a permit, which again, you'll pay for)
  4. Neil1

    Neil1 New Member

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    Thanks Guy's
    Much appreciated.
    Neil.
  5. Ken Bracewell

    Ken Bracewell Senior Member

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    Are they consuming sake? Or consummating a sale? :D

    In all seriousness, it is not necessarily a tax dodge for vessels over 300 tons. As I understand it the US doesn't really recognize anything over 300 as a private vessel and, as such, requires commercial manning and safety standards.
  6. PropBet

    PropBet Senior Member

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    Vodka / Tonic making it's way though to my post.
    *sale*

    :p
  7. lightspeed72

    lightspeed72 New Member

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    I thought you meant that Sake was consumed to consummate a sale off shore...lol. Sounds very underground :cool:
  8. MaxPower

    MaxPower Senior Member

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    i DO love a good sake tho ... hot or cold ...............

    :D :D
  9. Marmot

    Marmot Senior Member

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    The boat does not have to "stay offshore" or change to a US flag. If is is registered as a pleasure vessel it can immediately return to a US port and apply for a free of charge cruising license and spend the next year merrily hopping from US port to US port without legal hassles or other problems.

    http://www.moore-and-co.net/DOC061120.pdf


    The cruising license is issued specifically to allow a foreign pleasure vessel to "arrive and depart from the United States and to cruise in specified waters of the United States without entering and clearing, without filing manifests and obtaining or delivering permits to proceed, and without the payment of entrance and clearance fees, or fees for receiving manifests and granting permits to proceed, duty on tonnage, tonnage tax, or light money ..."

    http://www.thefederalregister.com/d.p/2008-10-15-E8-24523
  10. Marmot

    Marmot Senior Member

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    Don't take my word as the final absolute truth on this one but ...

    The tonnage is 200. The law requires licensed officers if the vessel sails on the "high seas." It was codifed in the CFRs to comply with a 1936 ILO convention which requires licensed masters and officers on ships over 200 tons and there is no reference to commercial or pleasure use.

    This is part of what is behind the recent changes in USCG licensing and STCW. Our lower level licences were for the most part not Ocean licenses despite that word being printed on the document. That is why there are no more 200 ton oceans tickets issued. I believe we will see a similar change coming with those MCA cereal box tickets that regardless of what the document says, cannot possibly meet STCW standards for commercial service in international trade.



    http://www.law.cornell.edu/uscode/html/uscode46/usc_sec_46_00008304----000-.html
  11. K1W1

    K1W1 Senior Member

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    Hi,

    The bold text is is how it should read as I reckon my Merchant Navy Chiefs Ticket is worth the same as your USCG Equivalent, the MCA is the issuing authority in my case these days whereas it used to be the DOT, and before the flames start it ain't short for Doddery Old Tossers.
  12. Marmot

    Marmot Senior Member

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    OK, fair enough. I thought later I should have been more specific, but in self-defense I did say "cereal box" tickets. ;)

    Just to clear up any confusion and to complete the thread hijacking process before the fireworks start - the licenses referred to originally are those issued by the MCA which are endorsed as being valid only on yachts.
  13. captbh

    captbh New Member

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    Although the cruising permit does grant permission for a foreign flag vessel to cruise within US waters, there are reporting and legal ramifications that must be followed.

    Any foreign flag vessel regardless of size must report to CBP every time it changes location. In some districts that means when you move 10 miles to a new port. In some districts you only have to report when you enter the district and can move around in that particular district without reporting in again.

    Depending on the size of the vessel and the waters you cruise in you may be subject to additional regulations beyond holding a cruising permit.

    If your private foreign flagged yacht is 100 ft you must take a pilot to transit New York waters. If it's over 100 tons you need a pilot in Delaware waters.

    There is a lot keep track of to insure you are in compliance with state and federal rules on ANY foreign flag boat.

    The 300 ton limit is the maximum for a US recreational document. The US does not have a category to register a private, non-commercial vessel over 300 tons. It is automatically lumped in with commercial ships and subject to the same rules and manning. Some folks that I am working with are currently trying to pay taxes and put an American flag on a 125 ft yacht that was measured as 320 tons and not making any progress. How ridiculous is that. They WANT to pay taxes and the government won't take them!

    The only yacht over 300 tons with a US flag that I am aware of is "Limitless". The owner lobbied congress to pass an exemption for his specific yacht.

    Senate Bill S1004, 104th Congress (1996), 1st Session, Section 1121 states:

    SEC. 1121. VESSEL DEEMED TO BE A RECREATIONAL VESSEL.

    (a) IN GENERAL.—The vessel described in subsection (b) is deemed for all purposes, including title 46, United States Code, and all regulations thereunder, to be a recreational vessel of less than 300 gross tons, if—

    (1) it does not carry cargo or passengers for hire; and
    (2) it does not engage in commercial fisheries or oceanographic research.
    (b) VESSEL DESCRIBED.—The vessel referred to in subsection (a) is an approximately 96 meter twin screw motor yacht, the construction of which commenced in October, 1993, and that has been assigned the builder’s number 13583 (to be named the LIMITLESS

    It's good to know your senators and representatives.
  14. K1W1

    K1W1 Senior Member

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    Hi,

    It has always amazed me how the books were cooked to give Limitless such a low Tonnage figure.

    It was also built outside the US which is a further hurdle to getting it on the US Register in itself IIRC
  15. captbh

    captbh New Member

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    It's not that the books were cooked, it's that the politians were........ well.... you know:rolleyes:
  16. K1W1

    K1W1 Senior Member

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    The Cooks?
  17. Barin

    Barin New Member

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    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.
  18. captbh

    captbh New Member

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    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.
  19. boblucas

    boblucas New Member

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    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.
  20. "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.

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