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Old 18-02-2012, 00:05   #1
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Great Lakes, Taxes, and Navigation.

Dear fellow sailors,

I am planning to purchase a boat in Chicago, and sail it through the Great Lakes. Eventually, I'd like to reach Delaware, but I won't have enough holiday time to do the trip at once (I estimated it to at least 35 days of sailing), so I am planning to leave the boat somewhere in the middle, and keep going east on my next holidays. That would mean leaving the boat somewhere in Canada or in the US on the way for periods of minimum 3 months, up to 1 year (dry storage everytime). Also the boat would be recently purchased and registered in Delaware (For tax reasons: I don't live anywhere, so why not chose a tax-free state for my boat and keep it there).
FYI, I am a French national, US resident, working abroad in war zones with a Swiss company and coming back every 6 to 12 months for a few weeks. So when it comes to taxes, not only it is complicated, but of course I am not particularly fond of paying taxes that are not providing me anything back (I'm not there, I don't get any of the normal benefits of paying taxes).

1st question: Can I legally leave my US purchased boat in Canada for long periods of time if it is not for import or use (just transit storage), without paying sales tax/import tax/duties/whatever they invented to make money on us.

2nd question: Can I leave it in other US states (transit storage) on the way without paying the sales taxes/other taxes?

3rd question: How long does it take (sailing Chicago to Delaware), and where would you stop on the way?

Thanks for your much appreciated experiences / advices
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Old 18-02-2012, 08:46   #2
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Re: Great Lakes, Taxes, and navigation.

I can't answer your tax questions, except to agree that they are indeed complex.

Although you do not state the size and make of your boat, I would estimate that a typical 33 footer could do the Chicago-Delaware trip in under a month if you didn't stop, but will involve a lot of work and you probably want crew to help you. Given that you have to sail the entirety of Lakes Michigan and Huron, you have to consider that the major part of the voyage, not only because of the length of time and the distances, but because you are farther from help and spares should you have mechanical or rig issues.

Lake Erie is straightforward, but all these lakes can get very squally very quickly in the summer. Other times there is little wind. Your engine and fuel condition must be in very good order.

The Welland Canal will take a day but "going down" is supposed to be somewhat quicker than "climbing up". Extra crew is needed there, as well. An alternative would be to get into the Erie Canal system from Lake Erie itself, but then you miss Lake Ontario. It is more customary, especially as it is considered to be a run, to sail Lake Ontario to Oswego, to dismast, and to "lock down" to Albany and the Hudson River, to put the mast back in, and then onto New York City.

You will need to confirm that last year's storm damage has been repaired to allow passage through all the Erie Canal locks you will need to transit.

After that it is up to you how you wish to get to Delaware, either "inside" or "outside". Plenty of people here have done that part who can advise.

I would say the logical "break points" would be at Detroit (spend three weeks going "up and around" from Chicago) and then at Oswego or the nearby opposite Canadian shore. If I was going to overwinter in Canada or northern New York State, I would dismast in the fall, wrap up the boat and at launch, simply cross the lake on a calm day with the mast lashed and secured on deck, saving myself money at Oswego.

Then you can go from Lake Ontario to Delaware in a couple of weeks if you don't want to hang out in NYC.

The other alternative, which is much longer in time but, for a French-speaker, perhaps more interesting, is to go out via the St. Lawrence and then cruise Canada's Maritime provinces and New England. That's a very different trip, however, and a greater time commitment.

Bon chance!
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Old 19-02-2012, 01:48   #3
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Re: Great Lakes, Taxes, and navigation.

Thank you S/V Alchemy! Your answer is actually of great help! I really appreciate your clear explanation about the different options to do this trip. And about the taxes, well, I guess nobody knows, it seems that even the states have no idea and handle it differently depending on who takes the case. So I guess I will have to get a legal advice from a tax consultant. If anybody knows about one who deals with boating issues, I am interested (not easy to find on the net either). Anyway, your answer is very helpful, thanks again.
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Old 19-02-2012, 05:25   #4
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Re: Great Lakes, Taxes, and navigation.

If Erie canal still has issues you can also go to the east end of lake Ontario, then part way up the St Lawrence ,hang a right at Montreal, then down through Lake Champlain and the Champlain canal to Albany, or, overwinter in Champlain, remember most of the canals are closed for winter approx Nov through memorial day. Or, go up to Georgian bay then down the canal into Ontario. Enjoy, Bruce.
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Old 19-02-2012, 06:34   #5
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This should be a good trip. I suggest thinking of it in two parts and enjoy the unique cruising opportunity you have since you realize you can't do it quickly. Tour Lakes Michigan, Superior, Huron/ North Channel for the first part. Watch your time and end up in Lake Erie. Take the second part to finish Lake Erie, Ontario to Montreal and down through Lake Champlain (this was a good idea from another post) and out. While in Michigan I suggest staying on the Michigan side. Superior, if you can make it into the Lake you will have seen a lot. Turn around and head for the North Channel, take your time. End the season in Lake Erie with a few days around islands off Port Clinton (including Put-In-Bay where you can have some serious night life) There are many places to put the boat on the hard between Toledo and Cleveland. Part two,...someone help him out...it is still on our list to do...darn job, keeps us to close to home. Enjoy the new boat, if you get near Racine stop in a Reef Point Marina for a cold frosty.
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Old 19-02-2012, 07:07   #6
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Re: Great Lakes, Taxes, and navigation.

Quote:
Originally Posted by decca View Post
Thank you S/V Alchemy! Your answer is actually of great help! I really appreciate your clear explanation about the different options to do this trip. And about the taxes, well, I guess nobody knows, it seems that even the states have no idea and handle it differently depending on who takes the case. So I guess I will have to get a legal advice from a tax consultant. If anybody knows about one who deals with boating issues, I am interested (not easy to find on the net either). Anyway, your answer is very helpful, thanks again.
I know what you meant, but you won't get legal advice from a tax consultant. It should be easy to call Canadian officals and ask how long your boat can stay without you being there and I'd suggest you ask it like that and simply say you are French and own a US registered boat, leave it at that.

The more you explain something to a government type, the more information they receive to think of other issues, so keep it simple.

As to taxes here, you'll need an address in Delaware and you could probably use a drop address as many businesses do.

Generally, state and county/commonwealth/parish taxes kick in when you spend most of your time or over 6 months in that area. This can get sticky as some states require personal property taxes on assets in that jurisdiction even if you don't own it if it is under your care, custody and control. So I'd check on it from that angle and have no idea what Canada might do. Good luck...
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Old 19-02-2012, 08:11   #7
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Re: Great Lakes, Taxes, and Navigation.

As a US resident with a US registered boat, you can leave it in Canada for 6 month periods. You will need to speak with Canada Customs and get an E-99. You can renew it every 6 months with no fee, no taxes.
As for your required contributions to the IRS, get a 330 day exemption. You will need to be out of the US for 330 days continuously. Hint...Canada ain't part of the USA.
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Old 19-02-2012, 08:24   #8
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Re: Great Lakes, Taxes, and Navigation.

If you want to make your passage an enjoyable cruise, I recommend you sail in the North Channel of Lake Huron, North of Manitoulin Island, pass through Little Current, then down the Eastern shore of Manitoulin to Tobermory, and thence down Lake Huron. If you just want to move the boat you will avoid that route and go more directly.

In terms of laying up the boat for an extended period, you should be aware that the boating season is relatively short in the Great Lakes, particularly in the Northern parts, and the cost of a transient boat slip will be high, especially in July and August. You won't want to leave the boat in the water for a few months during high-season.

If you have the boat hauled make sure you can store it with the mast up. Most Great Lakes marinas have modern Travel-Lifts, but some places still require removing the mast. It is very common in the Great Lakes for whole fleets of sailboats to be hauled out and stored for the winter, so most marina operators are very familiar with this.
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Old 19-02-2012, 10:47   #9
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Re: Great Lakes, Taxes, and Navigation.

Further to what Alchemy said... The Welland Canal is pretty simple on the downbound run (Erie > Ontario). Two adults on board would be all you need. Make sure you've got fender boards though. (Going up is an entirely different matter). In terms of timing, the best you'll do is about 7 hours, but it could be longer since commercial traffic takes precedence in the canal. You can be halfway through the locks and then the canal authority can tell you to tie up and wait for hours for a few freighters to pass.

There are lots of places to winter over on Lake Ontario - on either the Canadian or American side. A general rule of thumb would be the closer you are to Toronto, the more expensive it'll be.

As for crossing the lake with the mast on deck - I know folks have done it, but I'm not sure I'd go there. Wind and waves can come up pretty quickly and I'd hate to be in the middle of the lake with a big chunk of aluminum perched over my head. Perhaps if you can make a really strong set of stands you might want to do it.

Once in Oswego, it's an easy 4 days (maybe 3.5 if your lucky) to Albany and then straight down the Hudson to NYC. Most folks step the mast in Catskill, but some use the DIY gin pole at Castleton Boat Club. Others drive all the way down to NYC before stepping the mast. From Oswego to NYC is a nice trip of about 1 week - possibly less if you really push it.

From Albany to Delaware, how long it takes depends on whether you're 'cruising' or 'delivering'. If you're cruising, there are lots of places to visit on the Hudson. If 'delivering', you just want to keep the boat moving.

If a NYC isn't on your priority list, take the boat to Atlantic Highlands once you come out of the Hudson and then make sure you've got a weather window for the trip to Cape May.

From Atlantic Highlands, run an overnighter down to Cape May - get some rest if needed - and then it's only one more day sail up to the C&D. You can stop at Delaware City and then go through the C&D the next day.

This is a well traveled route and there are probably hundreds of folks on this forum who have traveled it. All will have slightly different stories, but this is how I have done it and would do it again (although we like to stop in NYC).

Cheers,
Colin
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