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Old 09-02-2015, 11:40   #1
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Puerto Rico Import Duty

Hello all:

I purchased my boat new (53 ft Amel Super Maramu) in 2001. I took delivery offshore from the factory in France. It is USCG documented and I have cruised it for the last 13 years, never alighting anywhere long enough to incur sales or property taxes. I intend to continue to cruise the boat and only stay somewhere long enough to either cruise or haul out for hurricane seasons. We have previously cruised the east coast of the USA without any hassles from state of or US customs. Recently we decided to haul out and cruise Puerto Rico with intent to eventually cruise Cuba etc.

At any rate, I have reviewed everything I can find on the tax/fees due in Puerto Rico and have ordered my DTOPS sticker, have a LBO (Local Boater Option) card from our various numerous check ins in the USVI etc. But I have heard that Puerto Rico may try and charge me the 1.5% import duty on the boat. Having reviewed 19CFR4.94 (Code of Federal Regulations), it seems that duty is only payable if the boat is for sale in the USA (it is not and it is not listed). Has anyone on this forum had experience with this? The boat will be in PR for about 7 months for hurricane haul out and storage only.

Thanks in advance for any advice.

G. Silver
s/v Liahona
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Old 09-02-2015, 14:42   #2
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Re: Puerto Rico Import Duty

Isn't Puerto Rico part of the USA?


Why not contact the authorities in Puerto Rico and ask them directly? That way you will get the correct answer the first time and not have to choose which advice you get on the Internet is correct and which is wrong.
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Old 09-02-2015, 14:46   #3
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Re: Puerto Rico Import Duty

Unless you try to register it with Puerto Rico and give up your US documentation, they have nothing to ask you. It is a USCG boat and you get treated the same as you did on the mainland.
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Old 09-02-2015, 16:10   #4
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Re: Puerto Rico Import Duty

Quote:
Originally Posted by gsliahona View Post
..........The boat will be in PR for about 7 months for hurricane haul out and storage only. ................
Many states and possibly PR will charge you tax, either sales tax or personal property tax if a boat is kept in that state (or territory) for more than a specified period of time which varies by state. For example, in South Carolina you would most likely be liable for personal property tax on the value of the boat if you kept the boat in the state for more than six months. This is what you need to check on.
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Old 09-02-2015, 16:42   #5
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Re: Puerto Rico Import Duty

Ask these people

Puerto Rico
Dept. of Natural Resources
Commissioner of Navigation
P.O. Box 588, Pta. de Tierra
San Juan PR 00906
787-724-2340

For the an answer.
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Old 09-02-2015, 17:17   #6
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Re: Puerto Rico Import Duty

My French built boat was USCG documented and I cruised and stored in Puerto Rico several times. There was no discussion of import duties or taxes, and I was not dumb enough to bring up the subject.
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Old 09-02-2015, 17:35   #7
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Re: Puerto Rico Import Duty

Quote:
Originally Posted by gsliahona View Post
Hello all:
I purchased my boat new (53 ft Amel Super Maramu) in 2001. I took delivery offshore from the factory in France. It is USCG documented and I have cruised it for the last 13 years, never alighting anywhere long enough to incur sales or property taxes.
(snip)
We have previously cruised the east coast of the USA without any hassles from state of or US customs.
(snip)
At any rate, I have reviewed everything I can find on the tax/fees due in Puerto Rico and have ordered my DTOPS sticker, have a LBO (Local Boater Option) card from our various numerous check ins in the USVI etc. But I have heard that Puerto Rico may try and charge me the 1.5% import duty on the boat. Having reviewed 19CFR4.94 (Code of Federal Regulations), it seems that duty is only payable if the boat is for sale in the USA (it is not and it is not listed). Has anyone on this forum had experience with this? The boat will be in PR for about 7 months for hurricane haul out and storage only.
I have been through a variation of this myself. Please do not shoot the messenger.

You do not state some key bits of data, such as country of citizenship and domicile/residence of the owner and the person bringing the boat into the US/Puerto Rico (same person?)

AFAIK the way to get a French-made cruising boat into the US for a cruising season is to follow the Customs rule that says “ a foreign-documented pleasure vessel which is kept in the United States by a nonresident thereof is not subject to United States Customs duty, regardless of whether it has a Cruising License, provided, of course, that the vessel is not sold or chartered, or offered for sale or charter, to a resident of the United States.” You need both foreign flag and nonresident owner.

See 3130-006A - Issuance of Successive Cruising Licenses: Definition of "Undocumented United States Pleasure Vessel" | U.S. Customs and Border Protection

If you are a US citizen who has ever lived in the US you may find it difficult to convince them that you are not a US resident without convincing them that after you left the US you became at least for a while a resident of another country.

I wonder if it is there is any temporary duty exemption applicable to US-flagged boats that will actually be used as cruising boats (as opposed to brought in for a show or for repairs); I do not know of any.

It is not uncommon for US Customs to fail to identify US-flagged boats that should pay duty upon entry into the US. This typically happens to USCG-flagged boats that were made outside the US and the members of NAFTA/etc, such as many French Beneteaus or South African Leopards that work for 5 years in the BVI charter fleets and are then taken to the US by the owners (as opposed to a delivery skipper bring ing in a new boat fromFrance that has not even been registered, hence clearly seen as subject to duty).

Note that when you got the the LBO card you may have said things(like providing a US address in the form) that may make it difficult to argue that you are not a US resident.

Their failure to tell you that you need to pay duty may not be a good defense for you when they ask you how come you went in without paying duty. I suggest you ask a customs broker who knows about boat imports, of which there are not many. AFAIK you can only find them in places (California, Washington state and Florida) where every once in a while Customs catches some duty evaders.

I believe that in most of those cases the owners mistakenly believe that the US flag (which confuses the Customs guy) means they do not need to pay duty. AFAIK if you want a legal way to avoid triggering duty when you enter the US with a French cruising boat to cruise US waters you need to have foreign flag and non(US) resident owner and apply for either a cruising license or a normal clear-in form (with the attending hassle of reporting movements, etc, restrictions on trash disposal, etc)

Donīt get confused with the "duty on sale" situation for foreign-flagged foreign-made boats on cruising licenses. Sale (or offer for sale) will trigger duty on those boats (see parts b-c-d of 4.94, which are for foreign-flagged boats) . IMHO in your case you should worry about not having filed an import declaration (and then paid duty) when you went in the first time.

Also donīt get confused about Puerto Rico. As far as duty is concerned Puerto Rico is one more state. If Customs in PR can catch you for duty the Customs in Florida also can. Only difference I know is that those Boricua federal employees seem to know their rules better than their brothers in Florida. USVI is another story because they are a special customs territory (loosely defined).

I was told once that there is no statute of limitations for this sort of thing if you did not file an import declaration (as opposed to filing an incorrect one). Your mileage may vary.

See below links to one website and two threads on related questions:

Pay US Import Duty Twice After Cruising Outside US?

Pay US Import Duty Twice After Cruising Outside US?

McClary Swift & Co.?Yacht Owner and Broker Information

Fair winds
C
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Old 13-02-2015, 16:27   #8
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Re: Puerto Rico Import Duty

No question, you should have paid duty when you first brought the boat to the US. And maybe have to prove the engines comply with EPA. But as said above, and as you have seen, very few Customs people will catch on to the issue. Since you have been in the US so long, probably would not come up.


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Old 14-02-2015, 06:02   #9
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Re: Puerto Rico Import Duty

Greetings and welcome aboard the CF, G. Silver.
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