Aussie Flag or US Flag on Vessel ?

[KillerBoo]

Excuse a curious question:
I´m European (Swedish) and we have the VAT thing. However oc, this only applies to things you buy from a company or other VAT-registered "legal person". Or if you import anything at all from non-Eu countries.
Have I completely misunderstood the entire thread, or do you, in the US, pay taxes on the purchase of a used boat, bought from a private individual as well?? I am/was getting a bit interested in going over the small puddle to find a boat and then sail it home to Scandinavia. Since it may involve refitting etc I might not get to leave US within the 90 days that you guys speak of. Would I need to pay taxes on an object I buy used, directly from the owner? If so, are these taxes normally included in asking price, or do I need to take that into consideration as well?

Phew, many words for a short question really...

[David_Old_Jersey]

Originally Posted by savoir

Maybe that pay for internet thing didn't work out too well. Hits on Times of London shrank 90%.

LOL Old Man Murdoch hasn't really grasped the Internet thing As an (occassional) Times reader I can safely assert that nothing in there that is not available elsewhere. and often better. Pay for UK Govt and NGO press releases online? Huh?? Opinion (whether wrapped around a nugget of news or not) I can find better informed / funnier on the Internet. and sometimes even the BBC. sometimes.........But I like something paper based to eat my lunch on

Most use of the traditional Newspaper is to work out what "they" want you to read. and to puzzle out the why. Kinda like Sudouko

Originally Posted by hellosailor

All good reasons to just "render unto Caeser" rather than trying to find a favorable venue, unless you really do the homework.

I am a great fan of Ceaser rendering The problem in the modern world is too many Ceasers with competing / conflcting demands - that's when they know what they want.

In my book finding out what your tax liabilities are before actually incurring a bill is just using your intelligence - common sense not Tax evasion. But over here thinking for yourself is not a crime - but I appreciate that other cultures may vary on that one........

Especially since in the US, the tax collectors generally have the authority to seize assets, including boats, and then tell you to defend your position, or pay up, before you can get them back.

The concept of annual wealth taxes on assets (especially 2nd hand & depreciating goods - like boats) is a strange one to me . If not a US thing then I am sure it would be called Socialism ........but on the enforcement side am aware that the US Govt has longggg arms and no sense of humour on taxes and much else. Probably the reason why I come accross so little business with that part of the world nowadays - 30 years ago that may have mattered but nowadays more / better opportunities elsewhere. For some things life is too short...........but I better stop - before the Mods spank me

[AllezCat]

Originally Posted by osirissail

Again it's the complication of being a dual national that raises problems. A purely "foreign" citizen visiting Cuba and then sailing to Key West rarely has any problems or is almost never is questioned as US/Cuba law does not apply.
- - It is common for USA citizens on USA documented boats to visit an intermediate country like the D.R. or Bahamas or Mexico prior to entering the USA. Thereby you are checking-in from one of those countries, not Cuba. However, the Cuba/USA situation is very politically charged and depending upon the politics of the US officials you encounter you can have no difficulties all the way up to major harassment.
- - If your plans are only to cruise around the Caribbean, and not bring the boat into the USA or more specifically a State - then there is little or no advantage/disadvantage to USCG Documentation - you can go either way. Also there is no issue with State taxes until the boat actually enters a State as a USCG documented vessel.
- - For such a short time 90 days or less, leaving the boat in a Caribbean port keeps your options open until you have made a final decision about where you will work/live. - - Under normal times, the economy was good, folks were making money and paying taxes, everybody was happy - and - States generally were quite lax in enforcement/discovery of technical small violations. Times have changed (e.g. California) and now there is considerable zeal by State tax officials to find and scrape in every possible penny they can.
- - My personal suggestion would be to leave the boat in a Caribbean port and avoid the hassles while you concentrate on your career choices without bureaucratically derived hassles associated with bringing the boat into USA waters - especially for such a potentially short time.

thanks for the info
just to clarify, does the 90 day period commences at purchase date (say in Grenada) or upon entering NY state? Hopefully upon entering the state.
My decision about buying a boat is in conjunction/acceptance of my baby-mama. We have a 5 year old daughter at school nearby Chelsea Piers(and classes at Chelsea piers).
So I would not wish to be away too long and must reside close by.
We may eventually relocate to Florida.
I also believe, if I understand the State tax laws correctly, once NY state tax is paid I would get a credit if I move to Florida. NY would be higher. If I moved from a state with lower tax I would only have to pay the difference.
It would be really difficult to pass up a stopover in havana - then Bimini? - then USA???

[AllezCat]

Originally Posted by KillerBoo

Excuse a curious question:
I´m European (Swedish) and we have the VAT thing. However oc, this only applies to things you buy from a company or other VAT-registered "legal person". Or if you import anything at all from non-Eu countries.
Have I completely misunderstood the entire thread, or do you, in the US, pay taxes on the purchase of a used boat, bought from a private individual as well?? I am/was getting a bit interested in going over the small puddle to find a boat and then sail it home to Scandinavia. Since it may involve refitting etc I might not get to leave US within the 90 days that you guys speak of. Would I need to pay taxes on an object I buy used, directly from the owner? If so, are these taxes normally included in asking price, or do I need to take that into consideration as well?

Phew, many words for a short question really...

hi killerboo
You would enter as a Swedish Citizen on a visa (probably 30 days visa waiver, probably 90 days if visa in advance). The boat would get 1 year cruising permit. Since you are legitimately not a resident you would not be liable for any tax. IMO. Need to clarify details.
"Or if you import anything at all from non-Eu countries."
this would be the same for me importing something from Europe or elsewhere.
If you purchased a VAT paid European built boat in the Caribbean, would you still be liable for "reVATing" in Sweden? Another poster suggested it would be lost...

[AllezCat]

Originally Posted by David_Old_Jersey

In my book finding out what your tax liabilities are before actually incurring a bill is just using your intelligence - common sense not Tax evasion. But over here thinking for yourself is not a crime - but I appreciate that other cultures may vary on that one........


The concept of annual wealth taxes on assets (especially 2nd hand & depreciating goods - like boats) is a strange one to me . If not a US thing then I am sure it would be called Socialism ........but on the enforcement side am aware that the US Govt has longggg arms and no sense of humour on taxes and much else. Probably the reason why I come accross so little business with that part of the world nowadays - 30 years ago that may have mattered but nowadays more / better opportunities elsewhere. For some things life is too short...........but I better stop - before the Mods spank me

Yea mate got to check the closing costs...

My ex-wife is very interested in the concept of owning a boat and not incurring annual property taxes. I told her there are none.
So was news to me that some states charge it. She believes that property taxes are going to go exponential.
I believe they are intended to be for local government - schools, roads etc...
But extremely high compared to "local rates" in Australia(I assume GB has the same???). It is not uncommon for people to lose their property over "property taxes"
Socialism is such a dirty word around here, especially after the past 2 years trial period...

[osirissail]

A US State can do nothing until you physically enter the territory of the State with the vessel.
- - The "Sales" Tax and the "Use" tax is the mechanism that some States use to ensure that they get their "cut of the action." Federal law prohibits collecting State sales tax on purchases made in a separate State. (that may change) The "Use" tax is exactly what its word says - If you "Use" the boat in the States waters then you are "using" State facilities/services/whatever. And there is a fee for that which magically just happens to be the same percentage as the "Sales" tax.
- - You are entitled to "offset" the new State's "Use" tax by the amount of sales tax paid in the original State. i.e.; 8% New York Sales Tax paid equals no Florida "Use" tax due - but you still need to do the paperwork. 0% Delaware Sales Tax paid and move the boat to Florida and you pay the full 6% Florida "Use" tax. However, there are exemptions for how long you have owned the boat and how long you have used the boat in the original State prior to moving to a different State. All of this has been discussed in threads on CF.

- - Again the Cuba/USA by USA boats/citizens is very fluid. Even though the Fed's extended the "Embargo" they reportedly did not fund enforcement. So the odds are good that you will not have any problems - unless - you go high profile and make yourself known and/or try to "put one over" on the Fed's. Dealing with bureaucrats/officials in any country of the world is a "crap shoot" - generally you get reasonable folks just trying to do their job - but occasionally you get a "crusader" or pissed off person and your life gets complicated quickly.

[osirissail]

Originally Posted by AllezCat

Yea mate got to check the closing costs...
My ex-wife is very interested in the concept of owning a boat and not incurring annual property taxes. I told her there are none.
So was news to me that some states charge it....

"Personal property taxes" are different from "property taxes." Some States in the USA (l lived in Missouri and it has one) charge you annually for the privilege of owning things like cars, boats, airplanes, jewelry, art work, etc., etc. Every year you pay up a percentage of the value of everything you own (with some exceptions) to the State over and over again each year.
- - The purpose of this type of tax is supposed to be to lower the real estate taxes (property tax) on property owners and shift some of it to apartment dwellers and others who do not own taxable real estate.
- - However, owning a "big ticket" item like a boat or airplane or even a new fancy car can make a big dent in your wallet. In Missouri, which has a personal property tax, it is very common to see a significant number of cars with Illinois (no personal property tax) license plates. Same with boats. The amount of money is significant so folks set up dummy residences in Illinois to avoid Missouri taxes.
- - So it is important when looking for a "tax domicile" in the USA to avoid personal property tax States, if possible.

[AllezCat]

Originally Posted by osirissail

- - So it is important when looking for a "tax domicile" in the USA to avoid personal property tax States, if possible.

I think Florida is the most liberal regarding personal income and toy taxes. hopefully will remain so.

Do you know what the procedure is when buying a vessel, say British flagged in Grenada, then documenting in America. At this point I believe no taxes/duty is paid. Then return to the US, declare that I am importing it, and pay a bond?, duty, etc.
Does any one know the procedure/pitfalls?
thanks

[osirissail]

Originally Posted by AllezCat

. . . Do you know what the procedure is when buying a vessel, say British flagged in Grenada, then documenting in America. At this point I believe no taxes/duty is paid. Then return to the US, declare that I am importing it, and pay a bond?, duty, etc.
Does any one know the procedure/pitfalls? thanks

I think you got it wired. You can go to the USCG documentation website and download all the forms, print them out, fill them in and then mail them to the Documentation Center with a check for the fees.
- - The key document is the Bill of Sale. And since this will be generated outside the USA, you will need to get it notarized locally and then that it to the Foreign Ministry and get it "Apostilled" which is an international procedure to certify the document as authentic. Same procedure in any foreign country.
- - Of course nothing happens quickly at a Federal bureaucracy so there will some time involved. The point is you do not need to hire an agency to do USCG documentation if you follow the instructions from the fed website.
- - Once you actually get the boat to the USA and check in then the duty stuff will kick in. The only other way is to register the boat with a US State and get a State title and number and pay the state tax, if any. Probably quicker but more expensive and then the problem of transiting other countries without USCG (federal level) documentation.

[AllezCat]

Originally Posted by osirissail

I think you got it wired. You can go to the USCG documentation website and download all the forms, print them out, fill them in and then mail them to the Documentation Center with a check for the fees.
- - The key document is the Bill of Sale. And since this will be generated outside the USA, you will need to get it notarized locally and then that it to the Foreign Ministry and get it "Apostilled" which is an international procedure to certify the document as authentic. Same procedure in any foreign country.
- - Of course nothing happens quickly at a Federal bureaucracy so there will some time involved. The point is you do not need to hire an agency to do USCG documentation if you follow the instructions from the fed website.
- - Once you actually get the boat to the USA and check in then the duty stuff will kick in. The only other way is to register the boat with a US State and get a State title and number and pay the state tax, if any. Probably quicker but more expensive and then the problem of transiting other countries without USCG (federal level) documentation.

thanks

[sailingmonica]

Would the mods please correct the title of this thread?

[hellosailor]

Boo, about the only simple part of your question is that no, the asking price never includes taxes. This is because the taxes will vary depending on who and what you are, and where the sales takes place.

In two different counties of the same state, the sales tax may vary. In two different states, the tax will vary.

And if a state resident buys a motor vehicle out of state, there is no jurisdiction for sales tax (by the state they reside in) but there may be an equivalent USE TAX which is due either immediately or when the vehicle is brought into the state. Again, varying by state laws.

As a foreigner you probably would be exempted from sales or use taxes IF you removed the vessel from the US within a set time period. That might be 30-90 days, again it will vary by the state, so you can't just say "I'm going shopping in the US" you have to know which STATES you might be shopping in. Check with a broker regarding the laws, then check the state web sites to confirm what you've been told is accurate. In some states, a broker is required to collect taxes except under specific instances, while a private party would not be required to collect them on selling the same boat to you.
Is this confusing? No, no more than it was confusing for an American going to Europe "re-EU" to play with baskets of Monopoly Money every time we crossed borders.<G>

NYS, by the way, does NOT require that boats be registered after 90 days in NYS. It requires that they be registered after 90 days ON THE NAVIGABLE WATERS of NYS. That means a boat up on the hard, awaiting repairs and launching, does not toll the 90-day time period. And IIRC that is also 90 days of continuous presence, so that hopping out to another state resets the 90-day period as well. That's way more generous than some other states, where 90 days may be "90 days in any calender year" on land, sea, or highway.

[Capt Phil]

Hellosailor makes a good point... the cruising permit folks 'may' do this, 'may' allow that, depends on who they are and the mood they are in. Best example is the lady that used to issue cruising permits in San Diego was a delight to deal with... friendly, helpful and knowledgable. Unfortunately she was replaced by the creature from the black lagoon who made every transaction a drama and went out of her way to be nasty, impolite and downright rude. don't know where the former went but sure wish she was back in SD. These folks seem to have a fair bit of discretion in there handling of the issuance of cruising permits.

[s/v Beth]

Originally Posted by sailingmonica

Would the mods please correct the title of this thread?

Done

[Zanshin]

VAT status is lost if the boat is not in EU waters at the time of sale. I went from UK flagged to UK flagged but the boat was in the Caribbean at the time time of sale and I've lost my VAT paid status.