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Old 15-02-2010, 19:38   #1
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Used Boat Purchase in St. Maarten

I'm buying a 8 year old catamaran in St. Maarten next month. It is owned by an American and registered under an LLC in the Marshall Islands. I'm an American from Michigan. It is unlikely that the boat will ever come to my home state.

My plan is to purchase the boat and keep it in the Caribbean. During the first two years, I'm thinking of keeping the boat in Fajardo, Puerto Rico. Then I want take it to the Mediterranean for 6 month's. After that I'll cruise the Caribbean and East Coast of the United States for a few years.

These are my questions:
1) If the boat is in Puerto Rico, do I have to pay any sales or use tax on it? If so, how much. Is this a one time tax like purchasing a car?
2) I've read that import duty is around 2% of the appraised cost of the boat. Is this correct? Are there any other import duties or taxes that will need to be paid?
3) If I pay sales tax in Michigan (6%) when registering the sale, will I ever have to pay it in another state? I currently have a LLC in Michigan that has a large amount of rental and lease income. There would be a benefit to having the boat owned by this company. Do you see any negatives?
4) Have any of you heard about being able to accelerate depreciation up to $250,000 this year as part of the stimulus package on boats purchased for charter and operating in US waters?

Thank you for any input.
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Old 15-02-2010, 20:55   #2
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Well, I found out about the accelerated depreciation already. But, what the heck, a write of is a write off in my book.

What will happen in 2010?
The 2009 tax incentives expire and the 179 expense allowance reverts back to what it was--which for most people is all they need. You still get up to $135,000 the year you put your boat in service and qualify for accelerated depreciation


The maximum amount of equipment placed in service in 2010 that businesses can expense will fall to around $135,000—a $115,000 decrease from 2009 when a temporary $250,000 ceiling was in effect. The annual investment limit will drop to around $535,000 for 2010. (The IRS will announce the exact amounts for 2010 in late 2009.) In 2009, the limit had been temporarily increased to $800,000. Thus, you won't begin to lose the benefit of expensing until you place more than $535,000 of assets in service in 2010.
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Old 16-02-2010, 06:20   #3
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You can US document the boat to avoid import taxes. This is needed even in the PR. In Ca if the boat does not come into Ca. waters for 6 months sales taxes are exempt. At least in 02 that was the case......i2f
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Old 16-02-2010, 08:55   #4
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I would not think your state sales tax would be applicable as your are not buying it in Michigan. I think those taxes would be dependant on where you register it. I found we had to pay the sales tax and register it in Florida because we couldn't move the boat to Texas within the specific "after purchase" time frame set by the state.
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