USA boat tax

[bobnlesley]

Originally Posted by john61ct

If you're not actually bringing it back to the UK no VAT, pretty sure. But you do need to flag the boat.

If the OP has a UK address then it's a simple procedure (online, costs about £30) to flag/register the boat under the UK Part-3 registration rules and that will need doing before you sail out of the US - wherever you're going to next will want to see your registration document upon arrival, As noted the payment of UK/European VAT/IVA is a completely separate issue and the boat only becomes liable for it upon its return to European waters.

[Sand crab]

Originally Posted by SVPerseverance

Can anyone tell me if you still have to pay state use tax on a US documented yacht while cruising abroad. In advance thank you.

Generally no but some states are very persistent about trying to get their money even when not justified. On the other hand many states don't have a use tax or sales tax. Which state are you talking about and what address is on the doc?

[merlyn]

Greetings, having just sold my Dufour 50 sv in the US 2 years a go I am well acquainted with the internal workings. First yes, if you buy a US registered boat each individual state will charge sales tax. You will be exempt from sales tax if you can prove out of state or out of country residency. As far as marine registration of the boat it can be done in any state, this is called state registration unfortunatly it is not recognized by all countries outside the US. Most states will demand a fee to register after a few years. There is a USA federal registration but it is only open to USA residents and companies but for companies it is complicated and costly. You can register your boat in your country or some other country even though the boat is not physically there. Either through an agent or yourself. Canada for example allows us to register the boat outside our country and not pay import taxes until we arrive at the border with the vessel. This is called inbound registration. So the vessel is a canadian flag boat. The USA will give us a cruising permit for US waters for a period of 365 days, but not all nations have this possibility. After 365 days the boat must leave USA territory ( fo the Bahamas for example) and reenter and reaply for a cruising permit. The cruising permit is $50.00 at US customs. There is the buying, the selling part I will explain later.

[hellosailor]

SVPerseverance :
"Can anyone tell me if you still have to pay state use tax on a US documented yacht while cruising abroad."
Use tax is imposed by a state, on residents of that state, as an alternative to sales tax. How and when it is imposed varies by the state. You'll have to check with your state of residency to see what rules apply to you. Making the wrong assumptions or failing to obtain the correct documentation can result in huge fines and penalties.

Merlyn-
I think you are getting some things lost in translation;
" First yes, if you buy a US registered boat each individual state will charge sales tax. You will be exempt from sales tax if you can prove out of state or out of country residency."
First off, in the US the term "US registered" is generally never used. It is US federally DOCUMENTED vessel, versus STATE registered, and we ensure minimal confusion by using the terms separately.
Almost all states charge sales tax on ANY SALE OF GOODS TAKING PLACE IN THAT STATE and unlike parts of Europe where sales may be VAT-exempt...there are no exemptions for non-residents. There ARE sometimes exemptions if the boat is purchased and promptly removed from the state, or removed from state waters (i.e. hauled out ashore), but those exemptions also vary BY STATE. The only way an alien would be sure of not paying the state sales tax, would be if they promptly re-flagged the vessel under a foreign flag. (Which would also mean obtaining a cruising permit or removing the vessel from US waters promptly as well.)
That appears to be what you are referring to, i.e. buying a boat which is immediately re-flagged to a foreign flag and then issued a cruising permit allowing it to remain in US waters. And I suspect even that will vary by state, since the sale (and the obligation to pay sales tax) would typically occur before the buyer owned the vessel, so technically, it could not be flagged and exempted unless that particular state allowed for the circumstances.
Yes, our differing state laws can be that maddening.

[john61ct]

**Property** tax is usually assessed by where the boat is kept.

**Sales** tax by where the transaction takes place, but usually exempted if promptly moved out of state.

Not in the owner's state of residence.

But yes varies completely by state.

Big enough amount, worth asking a lawyer