Buying Yacht as non-US resident - help !

[belizesailor]

Originally Posted by AndrewA2

Would USCG Documented be the same (or close too) flagging it ? Ie only US citizens can US flag a boat?
But anyone can state register a boat ?

And which of those triggers a TAXable event? I ask as if i buy a boat overseas, i would pay sales tax there and then. But the more i read, the more it sounds like the instant you hit US waters you have to pay sales or use tax (basically double taxing). But i am also reading that that is not the case, but im either not reading/or understanding how that can be.

Thanks for all your help and patience BTW - as well as information !!!

USCG Documentation can only be done for boats which are majority USA citizen owned. State registration requirements vary by State.

Flag. Regardless of whether USCG Documented or State registered the typical practice is to fly a USA flag (there are some obscure laws around State registered foreign owned vessels and which flag to fly, but Ive never heard of the flag police coming after anyone)

Sales Tax laws vary by State, which helps to make this more confusing. Be sure you understand the relevant tax laws of the State where you buy the boat AND the State where you plan to keep it. Or, hire someone who does.

Many States will come after you for sales tax if the boat is in their waters for more than a certain period of time (varies by State, but 30 to 90 days is common)...regardless of where it is registered/documented/flagged.

I suggest you hire a documentation service to sort this all out for you. This is what they do every day. There are loads of them in Florida and likely some in MS (my home State!...great mini cruising ground along the MS coast all the way into FL). However, you dont have to use one in any particular State...all can be done remotely. Google will turn up a pile of them and members here likely have recommendations (Ive not lived in the USA for 20 years so no recent recommendations).

[belizesailor]

Documentation service recommendation from a friend from a recent transaction. He is Brazillian, boat was French flagged in Martinique, he transfered it to a Delaware corp, vessel is now State registered in Delaware...so they know how to deal with complicated international transactions.

ASAP Marine Documentation & Registration

https://www.registeryourboat.com/

[skipperpete]

Do the EPA laws affect any of this process? Does the engine need to be tier 2 , tier 3 or is this not even an issue?

[Montanan]

Originally Posted by belizesailor

Documentation service recommendation from a friend from a recent transaction. He is Brazillian, boat was French flagged in Martinique, he transfered it to a Delaware corp, vessel is now State registered in Delaware...so they know how to deal with complicated international transactions.

ASAP Marine Documentation & Registration

https://www.registeryourboat.com/

State registration is available and may be required of boats that reside in the State's waters. A State registration is inappropriate if the vessel does not reside in that State's waters. State registration does not require US citizenship or even residence of the owner within the State, only the vessel must reside in the State's waters.

A State registration does NOT avail nationality to a vessel, it is not a flagging of the vessel under UNCLOS, United Nations Convention for the Law of the Sea.

Note that State registration is not a titling of the vessel. States can and will title the vessel separately and in addition to registering a vessel, but titling is not available if the vessel has been flagged, e.g. documented by the USCG or under a foreign nation's flagging registry.

[belizesailor]

Originally Posted by Montanan

State registration is available and may be required of boats that reside in the State's waters. A State registration is inappropriate if the vessel does not reside in that State's waters. State registration does not require US citizenship or even residence of the owner within the State, only the vessel must reside in the State's waters.

A State registration does NOT avail nationality to a vessel, it is not a flagging of the vessel under UNCLOS, United Nations Convention for the Law of the Sea.

Note that State registration is not a titling of the vessel. States can and will title the vessel separately and in addition to registering a vessel, but titling is not available if the vessel has been flagged, e.g. documented by the USCG or under a foreign nation's flagging registry.

True, under the letter of the law, but not in practice.

Delaware registration of foreign owned yachts is very common and they all fly USA flags (though not technically "flagged" USA).

Many of those vessels even clear in and out of the USA, and many other countries, with no issues (Ive been aboard them when they did both in the USA and other countries).

Almost none of those boats actually reside in Delaware, or even the USA for that matter. Few have ever been to either.

[Montanan]

Originally Posted by belizesailor

True, under the letter of the law, but not in practice.

Delaware registration of foreign owned yachts is very common and they all fly USA flags (though not technically "flagged" USA).

Many of those vessels even clear in and out of the USA, and many other countries, with no issues (Ive been aboard them when they did both in the USA and other countries).

Almost none of those boats actually reside in Delaware, or even the USA for that matter. Few have ever been to either.

Yes, some boaters do game the system, but such vessels are in fact undocumented, non-flagged vessels subject to such categorization and treatment. Not having nationality the boats are not granted the UNCLOS treaty rights and benefits of the scope of law of their nationstate. They also have to deal with clearance as undocumented vessels upon entry into ports, be that USA ports or foreign ports because as non-flagged vessels they do not receive the reciprocal customs clearance privileges that nationstates provide to certain other nationstates.

Note that if a boat does not reside in the States waters then its registration is invalid and the boat becomes an unregistered boat and subject to all the adversity of law of the State into which waters the boat has entered. There is no reciprocal grace period for transiting through a States waters with a visting vessel an invalid registration from another State.

A vessel must be registered in its “State of Principal Use.” That is the state on whose waters the vessel is used or to be used most during a calendar year. Delaware regulations state that if the vessel is to be used, docked, or stowed on the waters of this State for over 60 consecutive days, Delaware is its “State of Principal Use.”

If the boat is titled in another state the original title must be submitted and will be kept [surrendered and not returned]. If the boat comes from a registering state then the registration is required with a notarized bill of sale. If the boat is new, the manufacturer’s original certificate of origin (MCO) must be submitted. All paperwork must include the vessel hull identification number. If the boat is currently registered in Delaware, the old registration card is required with a notarized Bill of Sale including a description of the boat. A notarized bill of sale is not needed if both buyer and seller appear in person with picture IDs.

[Montanan]

Validity of a State Registration of a Vessel.

To use as an example, from the State of California's Department of Motor Vehicles Agent's Handbook for Registration of Undocumented Vessel.

Definitions:

Situs—Principal location of the vessel.

State of Principal Use—The state on which waters a vessel is used or intended to be used most during a calendar year.

Undocumented Vessel—Any vessel which is not required to have, and does not have, a valid marine document issued by the U.S. Coast Guard.

Use of Waters—To navigate, operate, employ, or moor any vessel upon the waters of this state.


4.025 Registration of New Vessels (CVC §9852)

The state of principal use must be California to issue California vessel registration. Do not submit an application if California is not the state of principal use or if the vessel is located out of state.


Unavailable Records (CVC §9917)

The application is processed as an original registration when the vessel record is not on file and the applicant does not have either the California Certificate of Ownership or Certificate of Number. The requirements are:

The vessel must be located in California.

[belizesailor]

Originally Posted by Montanan

Yes, some boaters do game the system, but such vessels are in fact undocumented, non-flagged vessels subject to such categorization and treatment. Not having nationality the boats are not granted the UNCLOS treaty rights and benefits of the scope of law of their nationstate. They also have to deal with clearance as undocumented vessels upon entry into ports, be that USA ports or foreign ports because as non-flagged vessels they do not receive the reciprocal customs clearance privileges that nationstates provide to certain other nationstates.

Note that if a boat does not reside in the States waters then its registration is invalid and the boat becomes an unregistered boat and subject to all the adversity of law of the State into which waters the boat has entered. There is no reciprocal grace period for transiting through a States waters with a visting vessel an invalid registration from another State.

A vessel must be registered in its “State of Principal Use.” That is the state on whose waters the vessel is used or to be used most during a calendar year. Delaware regulations state that if the vessel is to be used, docked, or stowed on the waters of this State for over 60 consecutive days, Delaware is its “State of Principal Use.”

If the boat is titled in another state the original title must be submitted and will be kept [surrendered and not returned]. If the boat comes from a registering state then the registration is required with a notarized bill of sale. If the boat is new, the manufacturer’s original certificate of origin (MCO) must be submitted. All paperwork must include the vessel hull identification number. If the boat is currently registered in Delaware, the old registration card is required with a notarized Bill of Sale including a description of the boat. A notarized bill of sale is not needed if both buyer and seller appear in person with picture IDs.

May be so under the letter of the law, but none of this makes any functional difference in actual practice.

Delaware registered vessels, owned by Delaware corps which are wholly owned by foreign nationals, flying a USA flag, are treated no differently by officials in practice than a USA Documented vessel. Ive cleared such in/out of at least half a dozen countries.

[Montanan]

Originally Posted by belizesailor

May be so under the letter of the law, but none of this makes any functional difference in actual practice.

Delaware registered vessels, owned by Delaware corps which are wholly owned by foreign nationals, flying a USA flag, are treated no differently by officials in practice than a USA Documented vessel. Ive cleared such in/out of at least half a dozen countries.

Flying a flag and being actually flagged as to the vessel having been conveyed nationality are not the same. The prior is just cloth, the later has effect.

An invalid registration due to a State not being a State of Principal Use of a Vessel remains an invalid registration, subject to fines and penalties.

Not unlike illegally evading VAT or Sale/Use Taxation. Or using a false passport.