Tax and Title Questions

[hpeer]

I'm trying to understand this whole issue about US vs. Canadian registry and the tax/import ramifications.

I am a dual US/Canadian Citizen living in the US. We have a registered Canadian sailboat we keep in Canadian waters.

Now we want to buy another sailboat. Initially we will keep it on the Chesapeake Bay but desire to sail off in a few years. We like the idea of Canadian registry especially if traveling to foreign lands. We have resolved our search down to two boats.

#1 - US registry in Florida, built in US, will have to be moved to the Chesapeake.
#2 - US registry, built in England (1984), is on Chesapeake now.

From earlier posts it looks like I pay no Canadian fees until I take the boat, which ever boat, to Canada.

Boat #1 - I would have to pay GST/PST (or HST?) of about 13% - no import duty. Is this correct?

Boat #2 - I would have to pay GST/PST (13%) AND a 9.6% import duty? Is that right? I would have thought that once a boat was imported to any NAFTA country the import duty would have been satisfied and that USCG registration would suffice as proof?

Now lets say that I decide to get US documentation. How does the situation change?

My thanks

Howard

[Chief Engineer]

Remember if it is MD waters for over 90 days(in a calendar year) you will owe the taxes here too>

[hpeer]

Yeah, I just started to research THAT issue.

I left it out here so as to not get sidetracked.

[hellosailor]

Bear in mind that with a Canadian registry, the boat will still be a foreign yacht requiring a cruising permit to enter US waters. And you'll have to take it outside US waters to renew that permit, annually, if they choose to renew it.

If it stays in the US too often too long...someone may decide the Canadian registry is a tax dodge, and come after the boat. US tax courts are a place you don't really want to be.

[hpeer]

Originally Posted by Chief Engineer

Remember if it is MD waters for over 90 days(in a calendar year) you will owe the taxes here too>

Chief,


While we are at it about Maryland....I presume that is a one time payment? Not annual? What if you leave for a couple of years and come back?

[hpeer]

OK, now you guys really got me thinking.

Suppose we bought the boat, USCG documentation, and licensed/registered it in Philadelphia, PA where we live. - 8% sales tax

But keep it in Maryland - then no additional tax because we paid it in PA already?

We stay here for two or three years, so this is all a one time thing, other than annual renewal in PA???

But then in year three we decided to document/register (whatever) the boat in Canada for foreign cruising. Then no additional tax because it has not gone to Canada.

But in year five we want to go to Newfoundland, so I would be going to Canada and would have to pay tax. Would I get a credit on the GST/PST for the 8% I already paid to PA?????

My head is hurting! And none of this answers my original IMPORT question.

[Chief Engineer]

If the vessel is in Maryland for 90 days in a calendar year you will have to pay the tax.

I will post the link:

http://www.dnr.state.md.us/boating/registration/

[hpeer]

Originally Posted by Chief Engineer

If the vessel is in Maryland for 90 days in a calendar year you will have to pay the tax.

I will post the link:

Maryland Department of Natural Resources - Boating

Chief,

I read that but, and probably being stupid here, but.......................
That is a one time tax, not annual, as I understand it?

[jkleins]

In Virginia you pay property tax on the boat where it is moored every year. You might be able to get out of it if you paid for it in your county of residence but I was unable to do that when I lived in Arkansas and had a boat in California so I haven't tried it here.

The county officials are very quick to find boats that stay in the county. They found mine within a couple months of it moving up from Florida. I have the boat USCG registered so I didn't have to register it with the state. They must get a marina report or something to keep up with the boats moving in and out.

It is not an inconsequential amount either. I have wondered if trying to pay it somewhere else would be worthwhile but haven't got around to researching it yet.

Don't know if this applies to Maryland but here it is the property tax which is levied so it is a yearly tax as long as the boat is in the state.

Jim

[Chief Engineer]

Note: US Coast Guard documented vessels using Maryland waters are NOT exempt from the vessel excise tax. When used principally in Maryland, documented vessels must display a documented use decal.

If your vessel was purchased in Maryland and will use Maryland waters a majority of the calendar year, you are liable for vessel excise tax and must register the vessel within 30 days of purchase to avoid assessment of penalty and interest.

If your vessel was purchased elsewhere or previously registered in another jurisdiction, is now in Maryland waters, and will use Maryland waters more than any other single jurisdiction during the calendar year, you are liable for vessel excise tax and must register the vessel within 30 days of entering Maryland waters.

If your vessel is duly registered in another jurisdiction but remains in Maryland waters more than 90 days in a calendar year, you may be liable for vessel excise tax unless you can prove principal use in another jurisdiction.

[teejayevans]

Originally Posted by maxingout

I documented my boat in the Cayman Islands for liability protection from absurd USA lawsuits.

I am a physician, and I was afraid of getting sued in the USA if someone was ever injured on my yacht. Lawsuits are out of control in the USA, and by putting my boat in a Cayman corporation, it meant that I personally could not be sued if there was a yachting accident. The boat is owned by the Cayman corporation, and not by me.

Nope, nice try. If you are operating the boat, you can always be sued.
You can achieve the same thing by putting the yacht in a LLC, but you can't protect yourself from yourself.
For example, if you have 2 phycians in an LLC, you and a partner, you make a mistake, they sue you and the LLC, the other doc can only lose their share of the LLC, but you, you lose everything. They usually can't take your house or your retirement accounts, this is why docs usually have big houses and max out their retirement.
Tom

[Meck]

Don't forget, if you or your LLC own nothing of register, there's no reason for anyone to sue...

Meck

[sck5]

I live in NY and investigated buying a boat in Canada and sailing it back to NY. I was told that since NAFTA passed there are no import duties either direction so long as the boat was manufactured within the NAFTA area (i.e. it is a Canadian or a US made boat). Internal taxes would still apply - basically, it is as if you bought the boat in the country and have to pay whatever tax is due when you buy a boat domestically - but there are no import duties unless the boat is manufactured in a third country.

I was told all this by a broker in Kingston so I assume he knew the Canadian rules. I sure dont so take this FWIW.

[sck5]

Note: US Coast Guard documented vessels using Maryland waters are NOT exempt from the vessel excise tax. When used principally in Maryland, documented vessels must display a documented use decal.

If your vessel was purchased in Maryland and will use Maryland waters a majority of the calendar year, you are liable for vessel excise tax and must register the vessel within 30 days of purchase to avoid assessment of penalty and interest.

If your vessel was purchased elsewhere or previously registered in another jurisdiction, is now in Maryland waters, and will use Maryland waters more than any other single jurisdiction during the calendar year, you are liable for vessel excise tax and must register the vessel within 30 days of entering Maryland waters.

If your vessel is duly registered in another jurisdiction but remains in Maryland waters more than 90 days in a calendar year, you may be liable for vessel excise tax unless you can prove principal use in another jurisdiction.

This is all of it true. I live in NY but my boat is currently lying in Rock Hall. Maryland wants the money after 90 days. They even say they will fine you if you are late. That didnt happen to me. They were happy I showed up with a check but they definitely want to see that sticker on your boat. And yes, my boat is CG documented. Maryland doesnt care where you register or document. They want their tax. Period.

[Force 10]

Originally Posted by sck5

I live in NY and investigated buying a boat in Canada and sailing it back to NY. I was told that since NAFTA passed there are no import duties either direction so long as the boat was manufactured within the NAFTA area (i.e. it is a Canadian or a US made boat). Internal taxes would still apply - basically, it is as if you bought the boat in the country and have to pay whatever tax is due when you buy a boat domestically - but there are no import duties unless the boat is manufactured in a third country.

I was told all this by a broker in Kingston so I assume he knew the Canadian rules. I sure dont so take this FWIW.

Seems to me you are correct and put it precicely --- Thanks