US Citizen buying a US flagged boat abroad?

[donradcliffe]

While I never went that route, one of the big selling points in setting up a Delaware Corporation to own the boat is that there are no taxes on the sales of corporations. You shouldn't need to reregister it either.

[aucoingc]

I'm with you on that for posturing the sale as a corp entity with an EIN, as opposed to a SSN, and for liability purposes. My suggestion is meant to keep the sales tax out of any Sovereign's hands (State or National) at the time of sale. To avoid VAT, or other forms of taxation, you just must keep the vessel cruising--which it was meant to do anyway.

[hellosailor]

Dave-
"The boat is US flagged through a Delaware corporation since the owner is Brazilian."
OK, but in my limited understanding of the world, a US-flagged vessel still cannot be legally owned by a "corporation" unless the ownership of that corporation is STILL 51% US citizens. (The real formula is not that simple, but that's what it comes down to.)

So if somehow this guy is using shills to create a "US" corporation to deceive the USCG and US flag the vessel, please be very careful. It means that he at least knows how to put on a proper con job with credentials at the federal level, and there's no reason to believe that he's being honest with you either. There have to be shills, shadow players, silent partners of some kind, as I understand it, so there's more there than meets the eye.
Be very careful. Get legal advice from someone who gets paid to practice law, and verify all the documents and claims. There's something wrong here.

[ranger58sb]

Originally Posted by Caribbeachbum

Perhaps your state uses different words and definitions than the ones I've done business in. The recurring tax you describe is, in my experience, referred to as a personal property tax (but not the same as a property tax, which is shorthand for real property tax, ie real estate).

Yes, could be... although I'd have been inclined to label personal property tax as a use tax, too.

The "registration" examples I cited aren't called use taxes here either... but in my mind, that's what they are.

In MD, we have to buy a semi-annual sticker that says our boat is documented. They don't call that a tax...

That said, there are some taxes that I don't really mind paying my share... so I'm not suggesting all taxes are bad, all sales or use (on property, chattels, whatever) taxes are bad, etc...

-Chris

[keepondancin]

Be VERY careful if you are thinking of buying the corporation. You assume everything about the corporation if you do. This includes any out standing debt, any liens of judgments, any other outstanding liabilities, and it is difficult to do a search that would show everything that is outstanding, and you could wind up with a very unpleasant surprise down the road. You could probably clear out of Trinidad, but may have problems clearing in any where else. Years ago the French Islands had a very accurate system and could pick up most discrepancies.

[jmschmidt]

Boy, talk about bad advice. Do not buy any corporation, LLC or partnership without extensive public records searches in all fifty states and perhaps foreign countries where the boat may have been. You may inherit all liens, judgments, attachments, pending law suits and unpaid marina bills that exist against the boat or the LLC. Do a title search with the US Coast Guard to find any loans, liens, judgments and attachments against the US documentation. This will not show any such items filed in any state or foreign court against the LLC owner or the boat. Ranger42C knows this.

Also, contrary to popular belief, a corporation, LLC or limited partnership will not protect you from personal liability if you personally caused the damages. If you load you boat up with a bunch of newbies and set sail into the approach of a hurricane you are potential toast and filet mignon to the personally injury lawyers.

If the USCG provided title abstract is clean you can establish ownership of the boat, not the LLC, by being the purchaser personally on a USCG Bill-of-Sale CG-1258 or through a newly established corporation or LLC. An LLC is much easier and cheaper to form and manage that a corporation. Thousands of companies worldwide are switching to the LLC for these reasons.

You can form an LLC in just about any state by going on to their website and fill in the document online, usually a one or two page fill-in form. Don’t pay some agent or even Legal Zoom to do something as simple as this. Don’t get me wrong, Legal Zoom is an excellent company that provides great service for most legal matters but not this one. Pick a state that doesn’t have a sales and use tax or a personal property tax. The USCG documentation process doesn’t care where a boat’s hailing port is as long as it’s in the US.

You stated that the boat is already “US flagged” but it seems that the writers of some responses here don’t understand that the terms “US flagged” and “US Coast Guard Documented” mean exactly the same thing.

You also stated that “The boat is US flagged through a Delaware corporation since the owner is Brazilian.” If the Delaware LLC is not owned and controlled at least 51% by US citizens who are documented members of the LLC and not just sham members who are US citizen friends of the Brazilian the title may already be in serious legal jeopardy.

You did not mention the boat’s origin. If not US built, import duties may apply.

Lot of red only flags here in addition to the red, white and blue one on the transom.

[Dave22q]

As others have note STAY AWAY. If CG documented the title may be no good as the owner was not controlled by US citizens. In addition when you buy a corporation you are buying their liabilities and not just their assets. Critically, you are potentially responsible either as the captain or the person who authorized another to operate the vessel. Corporate ownership does not shield you from personal responsibility. The injured always has the option to sue you personally as well as the corporation. The price of clever tax avoidance schemes can be very high.

[donradcliffe]

I'd forget the bad internet advice, and talk to the experts.

Why form a Delaware corporation for boat ownership purposes? Information about the advantages of incorporating a boat or any corporate vessel in Delaware

[billknny]

Originally Posted by DotDun

Only if:

you register the boat in Florida within 6 months of purchase

or

you are a Florida resident at the time of purchase

Or if you are a Florida resident when you bring the boat into state. Even if you were not a Florida resident when you bought the boat. No 6 month exception. It runs forever.

Ask me how I know