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Old 17-10-2006, 10:01   #1
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boat registration

New to this board, and require some advise. Presently residing in Canada and I am a Canadian. We are looking to purchase a new cat in USA and want to avoid taxes. I have had some advice to get the boat registered in Delaware or even in the Caribbean. My question is if it is registered in the US, I will have to fly the US flag? And if I sail into Canadian waters, I will be hit with Canadian duty? Is there any way around this to fly the Canadian flag? Or does it really matter? Thanks in advance.
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Old 17-10-2006, 10:12   #2
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Register in Canada

You only pay duty and taxes if you "enjoy" your purchase in Canada. You may even be able to visit Canada for contracted repairs, without paying customs and GST, although this depends on the agent and office.

http://www.tc.gc.ca/MarineSafety/TP/Tp13414/menu.htm

However, if you buy a cat style that has not been surveyed for "tonnage" (amount of wine it can carry, believe it or not), you will have to pay the outrageous fee to have a qualified surveyor do that. I payed ~$600 for the damned thing. If it is a monohull, you need only pull the figure off a table. Time for a review by a federal ombudsman, if you ask me.

I have had my FP Tobago 35 surveyed, and I am sure there are others. You may have to search or ask that question here. I payed the taxes too, by the way.
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Old 17-10-2006, 10:12   #3
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"My question is if it is registered in the US, I will have to fly the US flag? "
There's a difference between tax avoidance and tax evasion, the latter is illegal and usually gets the tax man very upset.

Our *states* have state motor vehicle registration available, and the process for that is that anyone can buy a boat (most states treat a boat with an auxiliary or main engine simply as a motor vehicle), pay the state sales tax (which can approach 9%) or state personal property tax, or other taxes, and keep the boat in that state--assuming you have an in-state address to use.
Most states also require any motor vehicle kept in the state for more than 30 days to be re-registered in that state. So, if you register a boat in Delaware and then move it to Connecticut...odds are the CT tax authorities will arrest the boat after 90 days and start proceedings against you. (Yes, the tax men walk the docks, they started looking for tax avoidance using Delaware shell corporations 20 years ago. Delaware corporations are a red flag.)

Then there's US federal documentation--but that's available only to US citizens. Neither documented no registered vessels "must" fly the US flag.

If you fly a Canadian ensign but the boat bears US state registration decals, you may attract some attention, it would be "odd" and that's one of the things civil servants look for. You wouldn't be hit for Canadian duty until and unless someone in Canada looked at your passport, then looked at the boat's registration papers, and then said "How come your boat isn't registered here at home?". That's when you either get away with it--or get prosecuted for tax evasion.
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Old 17-10-2006, 10:13   #4
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You can buy a boat in the States and register it in Canada. No problem. No GST, no PST. Just don't bring it back to Canada unless it's for hauling/repairs. No sailing around in Canada. Most states will not charge sales tax if you intend to take the boat out of the state of purchase. Some states have minimal sales tax on boats like $300 in SC and I believe none at all in NC.
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Old 17-10-2006, 10:15   #5
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Jeeze, see the times of response? What are we doing here, waiting to pounce on new topics?
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Old 17-10-2006, 10:23   #6
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If it were registered in the US you first need to become a US citizen. It's just one of the basic requirements. They won't register a boat to anyone that can not prove they are a citizen.

You then eventaully get hit with US taxes some place. Delaware has no state taxes so you could avoid state sales/excise tax. But should you spend enough time any place else that state will demand excise tax. The US and canada are not that unalike even if the paper work is different. canada would prefer you didn't avoid the tax so they make attempts and laws to stop you. It's neither easy nor legal to avoid the taxes.

What flag you fly means almost nothing. What you need are papers proving ownership. Just a bill of sale is not enough for international travel. Your documentation papers prove you are the owner and are not at all related to your tax issues but may become an issue some time. You'll need a passport for yourself and the corresponding documentation papers for your boat.

If you buy a boat in the US you'll need to take it out and end up some place. They won't accept a bill of sale as enough proof should an official ask for it. They might not ask.

Being aboard a boat without proper documentation carries the assuption that you stole it or at the very worst failed to document it. This isn't a case where you can say you are sorry.
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Old 17-10-2006, 10:24   #7
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Sonosailor,

Don't know when you bought your boat but the survey requirement for small vessels (under 40' but I think the regulation is in metric) has been dropped. Over 40 ft you still need it. When I registered my 39 footer I just filled in a form and sent them a couple of photos.
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Old 17-10-2006, 10:29   #8
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Quote:
Originally Posted by Pblais
If it were registered in the US you first need to become a US citizen. It's just one of the basic requirements. They won't register a boat to anyone that can not prove they are a citizen.
A "foreigner" can document a vessel in the States by doing it through an American corporation. Hence all those boats with hailing ports in Delaware. At one time a "foreigner" could not skipper an American flagged vessel but this has been changed and they can skipper pleasure craft.
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Old 17-10-2006, 10:30   #9
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Rick, NC is a sales/use tax of 3% with a $1500 maximum, for boats. Better than the 8%+ you'll pay in some states but not quite free.<G>

SC is indeed $300, and VA had a cap of $2000. Most states have their taxes documented online...the problem is, 50 states to look up.<G>

And then, you have to plan on keeping the boat there for several years, or else the next state will charge you tax again--plus penalties.

Easiest way to perform tax avoidance (which is legal) is just to have the engine removed so you have a pure sailboat. AFAIK not taxed in most of the US, although NC did just say "boats" and not "motor vehicles".<G>

Paul-
"They won't register a boat to anyone that can not prove they are a citizen." Not at all! That's for USCG documentation. (You've been on decaf today, haven't you?<G>) I know aliens who have registered boats. Doesn't matter where you come from, most if not all states will gladly take your money for this. You don't even need to speak YngGlitch, just pay the money.
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Old 17-10-2006, 10:56   #10
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Quote:
Most states will not charge sales tax if you intend to take the boat out of the state of purchase. Some states have minimal sales tax on boats like $300 in SC and I believe none at all in NC.
Most states do require excise tax if your boat is "in the state". If you buy a boat in Florida you must prove to the state of FL that you left before the deadline. They follow up with every sale. If you hang out in a Maryland marina too long you will be required to pay excise tax there. They don't care where you live. If they can find an annual slip contract at a marina you are toast. They hire retired persons to wander marinas and write down boat names / numbers and dates.

It's more about showing up than where you live or where you were born. So you end up paying tax if you park some place long enough. In the US sales / excise already paid in another state can be used to offset any sales / excise due in the current state but you still owe the difference.

Virginia is a funny boat tax state. The maximum excise tax is $2000 when you bring a boat home from someplace else but if you don't pay it before you register or title the boat you owe 5.5% with no limit. Also if I keep the boat at home I pay county annual personal property tax but across the river I pay none.
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Old 17-10-2006, 11:07   #11
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Quote:
A "foreigner" can document a vessel in the States by doing it through an American corporation.
That is not exactly true. You still need to prove that the corporation is made up of US citizens. I'm not sure of the % limit. But as a non US citizen you would be required to be a minority owner. But then in the end the corporation owns the boat not you.

Listing the home port as DE gets you nothing unless you actually keep the boat in DE. Maryland has a tax staff making lots of excise tax money plus penalties like this. Ownership and taxes are 100% unrelated in the US.
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Old 17-10-2006, 11:38   #12
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If I were in his deckshoes...

I'd register the boat in the Marshal Islands and head for Tahiti.

Kirk
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Old 17-10-2006, 12:01   #13
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hi user name! i don't know if the usvi require that you be an american, i have a feeling they might not. they have a website somewhere, google search for dpnr, (the department of natural resources) and go to boat registration. if you are planning to sail the french west indies, usvi registration is the only place that they do not require documentation from, though it is crucial to say that you live on your boat in the usvi when they ask. you cannot get u.s. documentation without an american address, so we are exempt.
a french buddy of mine has his boat registered in st vincent and the grenadines, w.i. but he recently wrote me something about the laws changing there and he now has to pay them alot more to keep thier flag. sorry, i wasn't paying enough attention, i'll search for his email about it if you can't find out what they require. this is an interesting topic as fees vary so much from place to place and it reinforces the canadian steriotype that we americans have against you: canadians are cheap!
the old vaudvillian joke in the waitressing trade is:
what's the difference between a canoe and a canuk?...a canoe tips!!!
bon chance!
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Old 17-10-2006, 12:18   #14
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Thanks everybody for the info........I'm not trying to evade the tax, but with so many different options and opinions this can become very confusing. I notice all the responses were dealing with the US, any comments/concerns in the Caribbean regarding registration? As for being cheap, who isn't? If your paying 400K for a boat, it nice to save that 30K to use elsewhere.
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Old 17-10-2006, 13:15   #15
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Quote:
Originally Posted by Vasco
Sonosailor,

Don't know when you bought your boat but the survey requirement for small vessels (under 40' but I think the regulation is in metric) has been dropped. Over 40 ft you still need it. When I registered my 39 footer I just filled in a form and sent them a couple of photos.
In 2002, I was told to get the survey, as they had no other way to fill in the silly requirement on the form. It took me until 2004 to whip and beat the surveyor into getting it done to the Fed's satisfaction. I sure had better places for the money!
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