VAT Question on Registering a Boat

[hellosailor]

" look askance at Delaware registrations. Can anyone tell me why? "
Because for many years many folks took advantage of Delaware's liberal and cheap corporation laws and registered their boats in Delware, then took them home all over the East Coast, in order to illegally avoid their local state tax and registration requirements. Then in the 80's all the state tax men wised up and started walking the docks and sending out notices to pay up, get rid of the bogus registration ("sham" corporation) or else come to tax court and try to get your boat back.

Some folks seem to think this will still work. Uh-uh. In some states, the tax men routinely pick up lists of anual marina contracts. Got an annual contract? They'll ding you for local taxes and registration and it is up to you to prove they shouldn't.

For a foreigner it could be a way to duck the US cruisers' permit--but as a non-citizen they boat would still have to be state registered and unless it was kept in Delaware or moved around...it might still wind up belonging to a state tax seizure.

Jaeger, be very sure you are familiar with our state laws, not just the federal ones, if you plan to keep a boat in the US for more than 90 days.

[saltydognl]

Originally Posted by boatman61

If you are planing to live aboard and can prove you have no other home it is classed as a home and is VAT free... its a House Boat.
When you come to sell VAT is liable, is it holding an EU CE mark....???
If not that's another snag you'll hit when you want to sell.
Where do you plan on basing the boat... that could make a difference....
If Norway is not in the EU you'll only get hit for tax again when you get there.
Flag her in Anguilla, take her to the Med and base her in Spain or somewhere and winter her in Tunisia that will renew your 18mth VAT immunity

Is that actually true that as it can be provved its your only home NO VAT is payable????? when registering as a uk vessel. I am british but bought a boat in US and am thinking of taking it back to UK. If I leave it as a US registered/zflagged vessel I can visit europe/uk but will have to export it every 18 months ????? Please reply as need confirmed acurate advice urgently. Currently in California but if problems will turn right at Panama instead of coming back to uk

[hellosailor]

Salty?
" I am british but bought a boat in US .... If I leave it as a US registered/zflagged vessel "

If you had done some homework you would know there is no such thing as a "US registered" vessel. In the Colonies we have State registration, which each of the states offers to vehicles including cars and boats, and we have Federal Documentation, which is never referred to as "registration" here.

If you have a state registered boat, that's fine, but state registration is sometimes not required outside of the US. If you have a federally documented vessel, the documnetation expired the moment that an alien bought the boat (that'd be you) and if you did not change the documentation status, you may be liable to prosecution and penalties. If nothing else, the first time you hit a border with a US documented boat and an alien owner, you may either be arrested or sent back to sea. Depending on who is feeling how generous about it. You might try claiming refugee status to get around that.

So, please do some homework. Find out what you own and what your ownership and title options are. As a Brit? No, you're not entitled to the scant protections of the US flag, and you can't flag a vessel here. You're welcome to visit, but you'll probably need a formal state residence for state registration, or a cruising permit for any foreign-flagged vessel.

Risks for getting it wrong? Arrest, expulsion, impound, fines...these days, things aren't always so casual.

[saltydognl]

Hi, Many thanks for the ( Confusing a bit ) information. The boat is registered/ title in california and tax was paid on it and title transfered to me at the address I was using at the time. I have the DMV certificate. So are you now saying I cannot take this boat out of the country???. I have now a Mexican temporary import certificate and Mexican Insurance to do so and sail in Mexican waters, are you now saying these are invalid??? and if so is my title invalid????? if this is the case then My title is invalid and should never have been charged the TAX on the transfer???? so I do not actually own the boat despite having had us insurance on the boat for the past year.

SO PLEASE clarify your statements.

[saltydognl]

Originally Posted by saltydognl

Hi, Many thanks for the ( Confusing a bit ) information. The boat is registered/ title in california and tax was paid on it and title transfered to me at the address I was using at the time. I have the DMV certificate. So are you now saying I cannot take this boat out of the country???. I have now a Mexican temporary import certificate and Mexican Insurance to do so and sail in Mexican waters, are you now saying these are invalid??? and if so is my title invalid????? if this is the case then My title is invalid and should never have been charged the TAX on the transfer???? so I do not actually own the boat despite having had us insurance on the boat for the past year.

SO PLEASE clarify your statements.

The sale was handled by a US brokerage, are you saying they broke the law by selling me the boat in the first place ???

[hellosailor]

Salty, you don't have any grasp of the issues. Which are discussed in great length a great many times in a great many places on the web and even in this forum.

What you bought is a California state registered motor vehicle. Makes no difference that it is a boat. The boat has no national flag or national title. Whether Mexico will recognize the state papers, from what I've been told is a matter of who you meet at the border. Since Mexico sees a lot of traffic from California, they tend to accept it. I have no idea what the legalities are.

If you don't actually reside at the residence address you provided...most states require you to update them with any change within ten days or a similar short period. Around the same time, your insurance becomes void as well, since the address you provided is no longer yours.

Mexican insurance? I don't know.

Tax, I can tell you about. The sale took place in California, while you were showing a California residential address, so the sales tax became due and payable to and in California. If the sale had taken place outside California waters, or if the boat had been exported within a set time frame, you might have been able to get that exempted as well. Rules vary in each state, I don't know the current ones in California.

If you just gave the broker your California residence and didn't fill him in on all the details, he'd have no reason to discuss any of this with you. If you told the insurer "Well, I don't really live there, I live in the UK" you would definitely be treated differently. As a UK resident with a boat in Mexico, no matter how it got there, you'd probably need your cruising area extended from "nearshore" to "global" and thepremiums would go up to match.

Mexico? Deserved or undeserved, has a reputation in the US for being sometimes very casual about very many things. Although if you have a car and the insurance on it is't completely in order, a slight accident can result in longer discussions from the jail cell. I hae no idea how they'd treat invalid marine insurance, but I'd suggest you start asking questions from the people who have to enforce these things, and tell them the longer story.

Or, just keep flying under the radar and be very careful about how you do it.

[David_Old_Jersey]

Originally Posted by saltydognl

Hi, Many thanks for the ( Confusing a bit ) information. The boat is registered/ title in california and tax was paid on it and title transfered to me at the address I was using at the time. I have the DMV certificate. So are you now saying I cannot take this boat out of the country???. I have now a Mexican temporary import certificate and Mexican Insurance to do so and sail in Mexican waters, are you now saying these are invalid??? and if so is my title invalid????? if this is the case then My title is invalid and should never have been charged the TAX on the transfer???? so I do not actually own the boat despite having had us insurance on the boat for the past year.

SO PLEASE clarify your statements.

My take is that:

1) you do own the Boat
2) and also have evidence to prove it
3) you do not have the equivalent of the UK SSR or Part 1 Yacht Registration (which are universally internationally recognised yacht registrations) - because as you are not a US citizen you can't get on the national (Federal level) yacht register .
4) what you do have is State Registration (no idea if - as a foreigner - you are allowed to have it. but it seems you do )....which would allow you to leave the US and in some US backyard nearby countries does appear to be sufficient for you to arrive in their countries (no idea if that applies to mexico ) - at least it seems to for US Citizens, but no idea if that also works for foreigners (like you).

In your shoes I would use a British address (ideally your own, if not freinds or family) and get her on the UK SSR register. Cheap as chips and simple paperwork (no taxes and no need for the boat to be inspected, let alone to visit the UK - and no need for the boat to be formally delisted from any other register. No doubt others know betterm but my guess is that sooner or later she would simply fall off the current State Registration....

....indeed (unless intending to keep the boat in the USA) I would have not bothered with the State Registration (and the taxes ) in the first place. Bill of Sale, onto the SSR and then off to foreign shores .....

......my take is that the boat being both registered on the UK SSR and with State Registration is acceptable as they are not equivalent registers (the UK one is a national register - the State one is only local, kinda like having the boat registered in the IOW .......however the US may have funny laws about that sort of thing (lots of funny "we are keeping you free" laws over there ).

The above longer than I first intended. and less clear than I aimed for .....and is of course not something you should act on without seeking further advice.