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Old 09-05-2014, 11:52   #1
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Buying a Boat in the USA

I am a boat owner but found something very interesting the other day. Friends of ours were looking at sailboats and were looking on yachtworld. They found that boats in the states were cheaper then here in Canada. We bought out boat in the states but buyer beware; here are some problems we found;
1. price is cheaper but what is online are prices in US dollars. You need
to convert to Canadian dollars
2. put the usa price in Canadian dollars
3. you need to pay duty; PST & GST, plus state taxes (depending which
state you are buying your boat)
4. you need to pay for a lawyer/notary here in Canada AND the USA to
transfer money across the boarder.

Is the price any cheaper? NO It's actually more expensive. Plus Canada is more strict when it comes to safety measures on your boat. Here is some advice from someone who has been there. We paid over 30 thousand above the asking price.
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Old 09-05-2014, 11:58   #2
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Re: Buying a boat in the USA

oh... by the way when we bought our boat the dollar was at 95 cents to the American.
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Old 09-05-2014, 12:03   #3
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Re: Buying a boat in the USA

One correction. None of the states I know will charge you state sales and use tax if you do not reside in that state and you remove the boat from the state before a deadline date. Minimum time I know of is 30 days but most states will grant extensions if the boat is under repair.
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Old 09-05-2014, 12:09   #4
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Re: Buying a boat in the USA

Quote:
Originally Posted by Freedom2015 View Post
I am a boat owner but found something very interesting the other day. Friends of ours were looking at sailboats and were looking on yachtworld. They found that boats in the states were cheaper then here in Canada. We bought out boat in the states but buyer beware; here are some problems we found;
1. price is cheaper but what is online are prices in US dollars. You need
to convert to Canadian dollars
2. put the usa price in Canadian dollars
3. you need to pay duty; PST & GST, plus state taxes (depending which
state you are buying your boat)
4. you need to pay for a lawyer/notary here in Canada AND the USA to
transfer money across the boarder.

Is the price any cheaper? NO It's actually more expensive. Plus Canada is more strict when it comes to safety measures on your boat. Here is some advice from someone who has been there. We paid over 30 thousand above the asking price.

I don't know where you received your information from, but I am going to call you on some points that I am sure of.

You DO NOT need a lawyer/notary in both countries to transfer $$$ to the United States.


You DO NOT pay gst/pst or hst until you bring the boat back into Canada, and you pay the value of the boat when you bring it into the country....if it is ten years later and the boat has devalued, you will NOT pay the taxes on the price you paid on the purchase date.

As skipmac noted above, you do not pay state taxes if you are not a resident, and you move the boat from that state in the given time period.

If your post is actual fact, and you had to pay the above.....you got taken in big time...but I really suspect that your post is just a spoof/hoax to see where it goes.

gunk
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Old 09-05-2014, 12:19   #5
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Re: Buying a boat in the USA

Sorry you pay state taxes on the boat if the boat is not made in the USA. Yes you pay taxes once you bring the boat to Canada; pst/gst on the amount you paid. Yes we did have a notary here in BC and we had to have a notary/lawyer in the states to wire the money to. I don't know where you got your info from either but we bought our boat in seattle and this is what we had to do. And it was only 5 years ago. You pay taxes on anything coming into canada from the states its' called DUTY. When your cross the boarder to shop you pay duty on clothes, food, etc..... if you think you can get out of taxes think again.
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Old 09-05-2014, 12:21   #6
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Re: Buying a boat in the USA

by the way.. my post is not a hoax.. i don't know who you are but Im just telling what we had to go through..
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Old 09-05-2014, 12:25   #7
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Re: Buying a boat in the USA

I can't think of any reason you would need an attorney to transfer money to in either country. It may have been easier or cheaper to do so, but there is no law against writing a check on a Canadian bank in the US, or just driving across the border with the money in cash. I have even used credit cards to buy boats in the past.

The only reason to use an attorney is if the money is being escrowed, but that is by no means a necessity of boat buying, just of your particular contract.
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Old 09-05-2014, 12:29   #8
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Re: Buying a boat in the USA

I didn't state that you don't pay taxes or duty...but my post does make the point that you can defer paying the above. You don't pay taxes or duty until you bring the boat into the Canada.....by leaving the boat in the states you can defer those payments.

If you chose to use a lawyer on both sides of the border that is your choice, I'm saying that you do not have to go that route. I won't. Why pay a lawyer on both sides of the border for the same transaction? Have the money wired into an escrow account.

You really should research these types of things before making a statement on a forum that isn't necessarily fact. Your reasoning that this is the way it has to be done because you did things that way, doesn't fly.

I hope you are enjoying your boat!

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Old 09-05-2014, 13:06   #9
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Re: Buying a boat in the USA

Quote:
Originally Posted by Freedom2015 View Post
Sorry you pay state taxes on the boat if the boat is not made in the USA. Yes you pay taxes once you bring the boat to Canada; pst/gst on the amount you paid. Yes we did have a notary here in BC and we had to have a notary/lawyer in the states to wire the money to. I don't know where you got your info from either but we bought our boat in seattle and this is what we had to do. And it was only 5 years ago. You pay taxes on anything coming into canada from the states its' called DUTY. When your cross the boarder to shop you pay duty on clothes, food, etc..... if you think you can get out of taxes think again.
Sorry but I do have to disagree on several points.

If you are referring to state taxes from a state in the US, I can assure you that paying state taxes has nothing to do with where the boat was manufactured. Perhaps you are confusing state taxes with import duty or Canadian taxes or some other fee? State taxes are charged on boats, cars, and as you say, clothes and most durable goods purchased in that state.

If you buy a car in the US doesn't matter if it is a Ford made in Detroit or a Toyota made in Japan, the sales tax would be the same. If you buy a shirt it doesn't matter if that shirt was made in Pakistan or New York.

Each state does make their own laws regarding sales tax and I cannot speak specifically for the state of Washington but all the states I know will not charge sales tax on a boat, any boat no matter where it was built, IF you are not a resident of that state and remove the boat from that state by their stated deadline. If you keep the boat in the state after that deadline then you will be liable for the tax.

Duty is a whole different matter. If a foreign built boat is already in the US, owned by a US citizen, is US documented or registered then the US import duties must have been paid and do not have to be paid again, even if the boat is sold to a non US citizen. Canada is again a different matter.

Regarding wiring money, I have been in the import/export business for 20 years and have sent and received wire transfers totaling millions of dollars all over the world including to and from Canada, Mexico, all over Europe, China and South America. All we have to do to wire money is send our bank the name and bank account number of the recipient and the SWIFT number and the money is sent. Same for wires we receive from other countries, including Canada and I deal with several Canadian companies. No one involved except the sender's and receiver's banks. If you had to put a deposit in an escrow account as part of the purchase process then that is one more time, a different matter.
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Old 09-05-2014, 13:14   #10
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Re: Buying a boat in the USA

Quote:
Originally Posted by skipmac View Post
Sorry but I do have to disagree on several points.

If you are referring to state taxes from a state in the US, I can assure you that paying state taxes has nothing to do with where the boat was manufactured.
I agree. If you purchase a boat in a US state, you generally have 30 days to move it out of state if you are not a resident. You may need to pay your residing state taxes - sales and / or property taxes - but not the state you purchased the boat from.
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Old 09-05-2014, 15:35   #11
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Re: Buying a Boat in the USA

I just bought a boat in the USA. I happen to have an American bank account as I spend 5-6 months a year there.

No attorney required. Nor a notary. I did the deal with the owner, wired money into my bank account, got a draft, she gave me the title and I transferred it to my name.

As the boat is staying in Florida, I do have to pay sales tax. A legitimate way to reduce it is have the owner sell you the boat, but everything that is not attached, separately on a second book of sale.

Sounds a bit hokey, but the Florida itself encourages this. Here is a direct quote from their website:

"What is included in the price of a vessel and therefore subject to sales tax? ?

If a dealer makes the sale, then tax is due on the cost of the trailer, motor (outboard and inboard), vessel, and accessories. If a non-dealer makes the sale, then the outboard motor, equipment, devices, and accessories included with the vessel are not subject to tax when the outboard motor, equipment, devices, or accessories are separately itemized and separately priced on the invoice."

http://www.flhsmv.gov/dmv/faqboat.html#4

You can register the boat as a Canadian one and as others have said, no tax payable until you bring it into Canada, even if only temporary. If it continues to have State registry (as a foreigner you can not get a USCG registration) you pay no tax.

Only advantage I see to a Canadian registry is it is easier to go to Cuba and the US government can not as readily board you outside of USA waters. Also, if you are traveling further afield, it is better to be registered as a national rather than state vessel.

I have not decided yet if I will change registry.

It really is much less complicated then some people want to make it.
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Old 09-05-2014, 15:41   #12
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Re: Buying a Boat in the USA

I get involved with this issue on a weekly basis. The OP is sorely misguided.

No need to pay state tax on a boat shipped to Canada(some time limits).
No need for a notary or a lawyer to transfer money across the border.
No duty payable to Canada if the boat was built in a NAFTA country.
You will pay sales tax at the border (sales tax is not the same as duty).

If the OP did as he says, someone took him for a ride and it wasn't Canada Customs.

I also deal on a daily basis with "safety issues" covered under the Canada Shipping Act and US Code of Federal Regulations and would like the OP to clarify what he means by Canadian requirements being more "strict".

PS. The statement that boats are cheaper in the US is highly misleading as 85% of my business this year has been US clients buying fresh water Canadian boats for less than US prices due to the diving Canadian dollar.
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Old 09-05-2014, 15:47   #13
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Re: Buying a Boat in the USA

Quote:
Originally Posted by Freedom2015 View Post
I am a boat owner but found something very interesting the other day. Friends of ours were looking at sailboats and were looking on yachtworld. They found that boats in the states were cheaper then here in Canada. We bought out boat in the states but buyer beware; here are some problems we found;
1. price is cheaper but what is online are prices in US dollars. You need
to convert to Canadian dollars
2. put the usa price in Canadian dollars
3. you need to pay duty; PST & GST, plus state taxes (depending which
state you are buying your boat)
4. you need to pay for a lawyer/notary here in Canada AND the USA to
transfer money across the boarder.

Is the price any cheaper? NO It's actually more expensive. Plus Canada is more strict when it comes to safety measures on your boat. Here is some advice from someone who has been there. We paid over 30 thousand above the asking price.
So maybe you're including some of the needed safety upgrades in your figure for the cost overun from the initial price? Sure would be nice to see an (approximate) itemization.
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Old 09-05-2014, 16:01   #14
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Re: Buying a Boat in the USA

Purchased my boat in China from the builder and had no need for an attorney. My bank had no difficulties transferring funds overseas ($20 fee for each transfer). Of course, had to pay import duties to the U.S. (1.5%), shipping costs (equal to the price of a mid-priced automobile), the user tax (close to 9%) to my state. Had a local broker handle the import/customs paperwork ($2k-$3k).

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Old 09-05-2014, 17:36   #15
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Re: Buying a Boat in the USA

What the OP posts as facts (after all, he bought the boat and PAID all those costs) contrasts with the reality that everyone else has experienced. Obviously, the OP is not a troll and has not been seriously misinformed and cheated. That wouldn't be nice.

What we have here, is a problem in communication.
[re: the Paul Newman movie, Cool Hand Luke]

Canadians really just don't appreciate how important it is to hire a licensed and specialized marine transaction translator before getting involved in any boating business transaction in the US. He'd have saved a bundle by hiring one.

Anybody else notice, that Google Translate and the Babelfish both fail to offer a Canadian-US English translation option? What's with that anyway? Arabic, Etruscan, Swahili, but no Canadian ?!
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