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Old 11-11-2010, 12:01   #16
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Looks like there is some confusion over terminology here so perhaps helpful to clarify some terms.

1. US Flagged. This term is often used loosely in the context a vessel registered or documented in that country. In some situations that would not necessarily mean flying the flag of that country.

2. Registration. In the US a boat can be registered in a state. In fact, many states will require the vessel pay the state registration fee if a vessel remains in that state more than 90 days. Time may vary state to state. US citizenship or even permanent residency in that state is not required.

3. Documentation, also referred to as USCG Documented or Federally Documented. This could be called "registering" your boat with the US Government. You must be a US citizen to do this.

A vessel can be Federally documented and also state registered. The state registration in this case is just a way for the states to get a little of your money.

If cruising only in US waters then state registration will be accepted. Even the Bahamas will take state registration. If you take the boat further afield some form of national documentation will become necessary.

4. Florida registration and sales tax. Not sure of the implications of a foreign owner but believe if the boat is US based these will apply.

a. If a US documented or a vessel registered in another state remains in the state of Florida more that 90 days the state requires you pay the state registration fee. This is not much, typically USD$100-200 depending on the age and value of the boat.

b. If you purchase a boat in another state and bring it to Florida within 6 months of the date of purchase you will be liable for the state sales and use tax, typically 6-7% of the purchase price. There might be a change in this to cap the maximum tax but still in the thousands of dollars.

If you purchase a boat out of the state and it remains out of the state a minimum of 6 months AND you can demonstrate that you planned to keep and use the boat out of Florida for that time you are exempt from the sales and use tax. You might have to show proof of compliance with this provision to be exempt from the tax. Marina receipts or something similar would be good to have.
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Old 11-11-2010, 14:02   #17
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Skipmac has it spot on.
As a Brit you can buy and use a boat in the USA with no problem as long as the boat isn't 'documented'. If it is documented when you buy it you need to have it de-documented, a simple process. You will need to state register the boat and this is usually good enough for the Bahamas also.
However, I would advise that before leaving the US for a longer jaunt down island you register it on the UK small ship register, which you can do on-line. You will need to supply a UK residential address. You would then fly the British ensign.
Remember that your own immigration status is a separate issue. Also remember that you cannot arrive in PR or USVI, or back to the USA, without a visa. The visa waiver program only works for approved carriers - the main airlines, basically.
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Old 11-11-2010, 14:27   #18
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b. If you purchase a boat in another state and bring it to Florida within 6 months of the date of purchase you will be liable for the state sales and use tax, typically 6-7% of the purchase price. There might be a change in this to cap the maximum tax but still in the thousands of dollars.

If you purchase a boat out of the state and it remains out of the state a minimum of 6 months AND you can demonstrate that you planned to keep and use the boat out of Florida for that time you are exempt from the sales and use tax. You might have to show proof of compliance with this provision to be exempt from the tax. Marina receipts or something similar would be good to have.
This is correct according to my present inquiries.
I believe the Florida tax ,if required, is capped at $18,000.

However, is it possible for a US corporation to own a US Documented vessel?
i.e. Delaware LLC owned by foreigners?
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Old 11-11-2010, 14:36   #19
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However, is it possible for a US corporation to own a US Documented vessel?
i.e. Delaware LLC owned by foreigners?
Yes, just get a lawyer in Delaware. I met an Israeli couple that did this. They had a Moody 34. At one time you had to be a US citizen to skipper a US flagged recreational vessel but they changed that law quite a few years ago.
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Old 11-11-2010, 14:48   #20
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You still have to be a US citizen to own a USCG documented vessel. Well, as of an hour ago anyway.
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Old 11-11-2010, 15:07   #21
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hi,wish to thank every one for there interest and info.i understand now and because i will one day sail to the med.think be better to register to british flag.as a matter of interest i have a 47ft tayana 1992 reg.vat paid british flag.have cruised the east coast usa 3 years ago so know about rules for foreign flag.want to sell because need a newer tayana.cheers and thanks once again
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Old 26-11-2010, 19:06   #22
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Aloha and welcome aboard,
It appears that you've gotten things sorted out pretty well.
kind regards,
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Old 26-11-2010, 20:40   #23
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"Yes, just get a lawyer in Delaware. "
AFAIK not, Vasco. In order for a vessel to be US Documented, the ownership must be at least 51% US citizen. If it is owned by a corporation, 51% of the stock must be owned by a US citizen.
A couple of foreigners could set up a shill corporation, putting 51% of the stock in the name of a hired shill US citizen, but then that would be criminal conspiracy and fraud, not to mention, the shill could simply walk away with the boat. So to speak.

And registering the boat as a state motor vehicle, then getting it UK-flagged afterwards, brings in another problem. Once the vessel is foregin flagged, it must depart the US and stay out of the US until the cruising permit is issued. IF the permit is issued. A year later, it must depart again for 15 days and re-apply for a permit, which again may or may not be issued.

Rashly assuming the rules for cruising permits aren't changed, as everything tends to be from time to time.
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Old 26-11-2010, 21:02   #24
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The key for the OP is to determine the cost of registering the boat in the U.K. versus the "Use" tax that would be due in Florida (assuming that is his destination). As stated by other "registering" the boat in a State of the U.S. does not require citizenship. However there are limits to how long you can keep a State registered boat in a State other than the State of Registration.
- - The Bahamas could care less whether the boat is U.S. Documented or State Registered. But other Caribbean countries do care. The French islands have been known to turn away State Registered boats.
- - Buying a U.S. boat and taking it to another country, especially a country without a boat registration system is very common. You will see lots of boats in Caribbean island countries with the boat name and US home port and a US flag on the boat even though the boat owner is a citizen of the little island country. The owner is just avoiding taxes in the little country by posing as a foreign boat. The little island countries do not have the manpower to police such boats and/or just don't really care. Virtually all the local boats have no identification papers/documents as they never really go anywhere except maybe the neighboring country for a short time.
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Old 27-11-2010, 10:34   #25
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"However there are limits to how long you can keep a State registered boat in a State other than the State of Registration."
That's kinda inside-out. There's no limit on how long you can keep a vehicle outside the state where it is registered. But each state has a law regarding how long you can stay in it, before the vehicle must be registered IN that state. (Routinely violated by snowbirds and others, as there is little mechanism to enforce those rules, and the main concern is that the vehicle be insured and registered SOMEwhere.)
In those states with a personal property tax, where annual property tax is levied on vehicles (CT is/was one of those) the enforcement may be done somewhat more eagerly, but personal property tax is relatively uncommon.
Fl has a business property tax--but no personal property tax, IIRC.
Generally the time period before registration is required varies from 30 to 183 days, sometimes within one calendar year, sometimes contiguous days. In NY, a (motor) boat does not need state registration unless it is in the navigable waters for more than 90 contiguous days within the calendar year; hop outside the state OR haul the boat overnight once every 89 days, and you can remain registered elsewhere. In other states, they don't give you that break.

And foreigners think it is only confusing for them?<G>
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Old 27-11-2010, 10:38   #26
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"Yes, just get a lawyer in Delaware. "
AFAIK not, Vasco. In order for a vessel to be US Documented, the ownership must be at least 51% US citizen. If it is owned by a corporation, 51% of the stock must be owned by a US citizen.
A couple of foreigners could set up a shill corporation, putting 51% of the stock in the name of a hired shill US citizen, but then that would be criminal conspiracy and fraud, not to mention, the shill could simply walk away with the boat. So to speak.

\e.
Can be done without fraud. Yes it's a corp set up by the lawyers. just structure the voting shares so that the owner has the say. Perfectly legal.
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Old 27-11-2010, 10:44   #27
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Cost of registering the boat in the UK is 15gbp on the SSR... the Blue Book is around 200gbp....
As for the boat staying in the USA... Customs at Morehead City, NC told me that my boat was fine in the US... could leave and come back with no problems or be kept in the US with no worries...
Myself on the other hand was a different ball game... visa's, cruising permits etc... not needed when vessel stored ashore(permit)
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Old 27-11-2010, 11:07   #28
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Rick, I don't doubt someone would try that but I'm not sure that would be legal since "51% ownership" might be based on money invested rather than voting shares allocated. I've never needed to explore that option with the USCG's legal affairs department, but it would be their opinion, not some lawyer's, that counts.

There's also another legal complication in the US regarding corporations. If the corporation has no purpose, no real business, it can also be declared a shill (usually by the IRS) and legally voided. Which leads to all sorts of problems. Setting one up in order to bypass a citizenship requirement? Uh-uh, I wouldn't touch that one unless the lawyer was willing to personally guarantee all penalities and damages if it was voided. And we both know the lawyer won't do that.<G>

Delaware corporations were a famous tax evasion tactic for many years here. Now? They're not so common, because they became a red flag for tax evasion and prosecution.
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Old 27-11-2010, 11:12   #29
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Rick, I don't doubt someone would try that but I'm not sure that would be legal since "51% ownership" might be based on money invested rather than voting shares allocated. I've never needed to explore that option with the USCG's legal affairs department, but it would be their opinion, not some lawyer's, that counts.

There's also another legal complication in the US regarding corporations. If the corporation has no purpose, no real business, it can also be declared a shill (usually by the IRS) and legally voided. Which leads to all sorts of problems. Setting one up in order to bypass a citizenship requirement? Uh-uh, I wouldn't touch that one unless the lawyer was willing to personally guarantee all penalities and damages if it was voided. And we both know the lawyer won't do that.<G>

Delaware corporations were a famous tax evasion tactic for many years here. Now? They're not so common, because they became a red flag for tax evasion and prosecution.
I do not know how you guys work out shares of a boat in the US... but over here the boat consists of 64 shares.... the shares/person must be declered when the boats registered and the owners are then listed in order of Majority.
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Old 27-11-2010, 11:21   #30
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For US documentation, you need a US entity owning the vessel. This can be either a natural person (ie US citizen) or a US corporation. It is perfectly normal for any corporation to invest capital from selling shares.. which includes buying a vessel.

Who the share holders of the corporation are doesn't matter.. the corporation itself is a legal US entity. It can also never be declared a "shill" because the corporation does exactly what it's mission statement says: own and operate a vessel.

For the OP: there's a thing to check... if the boat was build in the USA, you can register it with a British flag (incl. BVI etc) and get a yearly cruising license which can be extended indefinately. This only works if the boat was build in the US and only for certain countries of registration. The only ones I am sure about is British and Dutch but if I remember correctly there are 14 nations on that list.

cheers,
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