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Old 29-08-2015, 15:51   #1
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Costs Associated With Purchasing a Foreign Flagged Vessel

What are the hidden costs of purchasing a 4-year old, single-owner, foreign flagged sailboat that is already located in the United States? Certainly a survey will need to be done prior to purchase. Brokerage fees? Sales tax on the purchase? Import duty on the boat? USCG documentation? There will be some refit costs, but those will come afterwards.

eric
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Old 29-08-2015, 16:43   #2
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Re: Costs Associated With Purchasing a Foreign Flagged Vessel

You can save 1.5% import duty if the boat is made in one of a list of countries.

Make sure the engines of boat and dinghy and genset meet EPA rules listed in the aditional form that CBP will ask you to fill for engines.

Note that if sellers takes boat out to Bahamas or Canada and you bring it back in with US papers you can avoid the formal import because no one will request it, but you are formally breaking the law if you do not do the formal import.

Also do not forget state sales and use tax.

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Old 31-08-2015, 12:14   #3
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Re: Costs Associated With Purchasing a Foreign Flagged Vessel

"Note that if sellers takes boat out to Bahamas or Canada and you bring it back in with US papers you can avoid the formal import because no one will request it, but you are formally breaking the law if you do not do the formal import."
I don't know how you could avoid the formal importation. I can assure you that US Customs in Gulf Port Mississippi were very much on top of the 1.5% importation duty on the French flagged vessel that I landed there last month, and insisted that importation documentation was submitted along with payment within 72 hours, no ifs, ands or buts. What's more, they insisted that I could not submit the documents myself, but that they must be handled by a customs broker. It ended up costing about $300 on top of the duty.
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Old 31-08-2015, 13:41   #4
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Re: Costs Associated With Purchasing a Foreign Flagged Vessel

Quote:
Originally Posted by enjaku View Post
What are the hidden costs of purchasing a 4-year old, single-owner, foreign flagged sailboat that is already located in the United States? Certainly a survey will need to be done prior to purchase. Brokerage fees? Sales tax on the purchase? Import duty on the boat? USCG documentation? There will be some refit costs, but those will come afterwards.



eric

Depending on where the boat is flagged now you may be able to keep the flag and just transfer ownership to a corporation that you form and own in that country. Then you will need to purchase a cruising permit every year that the boat is in this country. No sales tax or import duty for that route but you will have annual fees to that county.
If you change to U.S. flag then you may or may not have to pay import duty as above poster has indicated depending where it was manufactured. Deflaging fee to other country will be paid by seller. You will need a customs broker as indicated above. Sales tax, brokers fee, survey and uscg doc fee are not additional to the transaction as you would have to pay on buying a U.S. Flagged vessel anyway. You may choose to hire a documentation company as your agent which would be an additional cost.


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Old 31-08-2015, 13:48   #5
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Re: Costs Associated With Purchasing a Foreign Flagged Vessel

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Originally Posted by Grateful View Post
"Note that if sellers takes boat out to Bahamas or Canada and you bring it back in with US papers you can avoid the formal import because no one will request it, but you are formally breaking the law if you do not do the formal import."
I don't know how you could avoid the formal importation. I can assure you that US Customs in Gulf Port Mississippi were very much on top of the 1.5% importation duty on the French flagged vessel that I landed there last month, and insisted that importation documentation was submitted along with payment within 72 hours, no ifs, ands or buts. What's more, they insisted that I could not submit the documents myself, but that they must be handled by a customs broker. It ended up costing about $300 on top of the duty.
You did not clear in with US papers.

Had you reflagged to US flag before taking the boat to the US they would have seen no reason to tell you of your obligation (assumming you are a US citizen and resident) of doing the formal import. There are LOTS of French-made Beneteaus in the US that have not been formally imported. I would not want to be caught in that situation.

I do not believe it is a good idea to cheat on Uncle Sam.

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Old 31-08-2015, 14:09   #6
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Re: Costs Associated With Purchasing a Foreign Flagged Vessel

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foreign flagged sailboat that is already located in the United States?
Hi Eric - By the rules, you cannot buy a foreign flagged vessel already in the US. It must be imported first, which in this case is the responsibility of the owner/seller. If you buy it outside of the US and bring it into the US, you would be responsible for the importation/duty.

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Old 31-08-2015, 15:05   #7
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Re: Costs Associated With Purchasing a Foreign Flagged Vessel

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Hi Eric - By the rules, you cannot buy a foreign flagged vessel already in the US. It must be imported first, which in this case is the responsibility of the owner/seller. If you buy it outside of the US and bring it into the US, you would be responsible for the importation/duty.

Dave
Very true! Just read the cruising permit a foreign vessel needs to sail in US waters.
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Old 01-09-2015, 14:11   #8
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Re: Costs Associated With Purchasing a Foreign Flagged Vessel

Has anyone imported a Canadian vessel in to the US? We just bought a Canadian built boat in the BVI and registered it with the USCG for the first time in her life. I believe that we won't technically owe import duty when we bring her back to the States, thanks to NAFTA, but I'm not positive. I'd like to hear others' experiences.

What does one need to prove that the boat falls under NAFTA rules?
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Old 01-09-2015, 14:38   #9
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Re: Costs Associated With Purchasing a Foreign Flagged Vessel

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What does one need to prove that the boat falls under NAFTA rules?
Builders Certificate.
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Old 01-09-2015, 14:49   #10
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Re: Costs Associated With Purchasing a Foreign Flagged Vessel

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Builders Certificate.
And that brings up another good point. If the boat you're importing (or has already been imported) has a dinghy, it doesn't necessarily get a worry free ride. Some, if not many or all US states, require a Builder's Certificate on the dinghy for State registration, unless it was bought in a US State, as shown by a bill of sale. This applies also if you buy a dinghy, say in SXM where they're cheaper, and bring it into the US, you need to have Builder's Cert to get it state registered (wholly separate from import duty, if it applies). The Builder's Cert is typically provided by the off shore seller if it's a reputable dealer.

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Old 01-09-2015, 15:22   #11
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Re: Costs Associated With Purchasing a Foreign Flagged Vessel

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Has anyone imported a Canadian vessel in to the US? We just bought a Canadian built boat in the BVI and registered it with the USCG for the first time in her life. I believe that we won't technically owe import duty when we bring her back to the States, thanks to NAFTA, but I'm not positive. I'd like to hear others' experiences.

What does one need to prove that the boat falls under NAFTA rules?
In order to prove the duty exemption to CBO you need a "NAFTA Certificate of Origin" as in CBP´s form 434

In other countries they require that similar Certificates of Origin be issued by the builder, I suspect that in the US they are more flexible if I recall correctly form the time when I did this at work. I do recall that at least one time they took a letter from the defunct manufacturer instead of the form.

Another story is that in order to register with USCG or state you will need papers that may include a builder´s certificate (nothing to do with the NAFTA form).

In theory the registration of the boat has nothing to do with the import, but in practice the front line gets confused.Be aware that when you show your USCG reg papers they will not think realize your boat requires a formal import. In fact, you may need to insist in order for them to let you talk to the right person. All that said, their ignorance as to your obligation to import the boat does not free you from the obligation to do so.

Don´t forget that CBP will also want to see a letter saying that all combustion engines on the boat and dinghy are covered by a valid US EPA Certificate of conformity and attaching a copy of those certificates. If you have a 2-stroke dinghy that does not have a Certificate of Conformity then you cannot import it. They will also ask you to file EPA 3520-21 (Engine Declaration) forms.
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Old 01-09-2015, 15:27   #12
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Re: Costs Associated With Purchasing a Foreign Flagged Vessel

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And that brings up another good point. If the boat you're importing (or has already been imported) has a dinghy, it doesn't necessarily get a worry free ride. Some, if not many or all US states, require a Builder's Certificate on the dinghy for State registration, unless it was bought in a US State, as shown by a bill of sale. This applies also if you buy a dinghy, say in SXM where they're cheaper, and bring it into the US, you need to have Builder's Cert to get it state registered (wholly separate from import duty, if it applies). The Builder's Cert is typically provided by the off shore seller if it's a reputable dealer.

Dave
If the dinghy was purchased at Budget Marine in SXM then they will be be happy to provide an invoice with the serial number of the dinghy hull and the name of the person who bought it from Budget Marine. Then you can get a chain of bills of sale between Budget Marine and you. That has done the trick in the past.
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Old 01-09-2015, 15:27   #13
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Re: Costs Associated With Purchasing a Foreign Flagged Vessel

And on top of that, a title search and perhaps title insurance on the matter of the foreign title and any lien status.
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Old 01-09-2015, 15:39   #14
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Re: Costs Associated With Purchasing a Foreign Flagged Vessel

Just read the last few posts. The bureaucracy is amazing. And they say "buy a boat and go cruising".
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Old 01-09-2015, 16:24   #15
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Re: Costs Associated With Purchasing a Foreign Flagged Vessel

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Just read the last few posts. The bureaucracy is amazing. And they say "buy a boat and go cruising".
Unbelievable.

I hadn't even considered the dinghy and outboard, nor the Yanmar diesel. I think I'll be doing a fair amount of pleading ignorance.
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