Boatpoker hit the nail on the head
in Post 3.
I am a Canadian who owns a US boat which is kept in US waters full time. It cannot be federally documented as I am not an American citizen, so I have it licensed with the New York
State DMV. Taxes
paid to New York
. No issues so long is it resides in New York. Where it becomes a pain is if you decide to spend time in another state. For instance, if you sail down to Florida
for any length of time, the state of Florida
will want taxes from you. This is one of the many advantages to having a vessel federally documented in the U.S. Also, if you leave the US for say Bermuda
or the Caribbean
, it is much easier to clear customs
with a federally documented vessel which shows clear title vs a state DMV certificate.
The other option you have, which I have done with another boat I own in the Caribbean
, is to actually register it federally with Transport Canada. As long as the boat was purchased and remains outside of Canadian territorial waters, taxes never become due. You will however be obligated to apply for US cruising permits annually if you intend to stay in the U.S. This will require a fee to the Americans ( only fair ) and each year the boat will need to leave US waters for 2 weeks ( Bahamas
) to reset the clock. This gives you the ability to sail to multiple states provided you disclose your itinerary to Homeland Security
and reap the benefits of a federally flagged vessel.
Hope this helps.
P.S. as far as the taxman goes for individuals. There are two restrictions for Canadians spending time in the US. The first is immigration which deems that you cannot remain in the US for more than 183 consecutive days. The word consecutive is key here. The other restriction is for tax purposes and is a rolling 120 days in the last 12 months. This is one that you must keep track of but the beauty of this one is that the US and Canada have a tax treaty. So if the Americans deem that you have stayed beyond the 120 rolling days and that taxes are due, because there is a treaty, any taxes paid to Canada qualify. And guess what? Canadians pay way more taxes so most often, no taxes are due to the US.