Rules, taxes, registration on non-US boat

[alha]

I was just reading the thread Boat Registration and Sales Tax, and it got me wondering about my eventual situation. I had posted the question (with some editing when I posted it here):

"This question has reminded me of one that I had rolling around in my head since I considered joining the cruising lifestyle. The odds are pretty good that I will be buying my boat overseas, and bringing it back here till I head out on the big adventure, which hopefully would be fairly soon after the purchase. I live in MN, but the plan is to be an ex-pat, though I think it needs to be registered _somewhere_. I know some states have no sales tax (I believe SD has no sales tax, and I could get there via the Missouri river if necessary, so I suppose I could register her there?), and is sales tax even an issue if it isn't going to be based in the US, and not being there often, or for long periods of time? A little different angle than the OP, but kinda along the same lines. Very new to this, so thanks for the patience!"


I received a reply from Sailcrazy, as they have done a similar thing, but one thing mentioned was that they said was that their boat has never seen conus waters, and don't expect to sail her there. I probably do plan on doing that at some point, probably before I leave, which raises some issues? They federally documented her(USCG) when they bought her, and could "pick" their home port.... They picked Anchorage.

This is all pretty new to me, but might be good information for people after me who are considering doing the same thing. If anyone can shine some light on what to expect, and how to avoid any unnecessary expenses, or doing something stupid, I'd appreciate it. Thanks!

[alha]

Anyone?

[svGenesis]

If you will be in the states for any extended period of time(60-days or more) you will pay taxes on the boat. (sales tax) Plenty of threads on the subject as i recently bought my boat and I scoured this forum, the USCG registration, and the broker who sold the boat. Obviously you can try to skirt them but I didn't want that stress looming over me while im enjoying myself.

[Lepke]

I live in Oregon - no sales tax - and bought a Canadian owned, US built, boat. Total import cost was about $12. I was an Oregon resident, but my residency was a commercial po box and a private marine dock address.
I would think it not too difficult to change your residency to a non sales tax state. Some states waive the sales tax if taxed object was owned for some period before moving into the state.
Another option would be a flag of convenience unless that complicates financing or insurance. Since you are planning on living outside the US anyway, foreign registration shouldn't hurt you. Some states require the non documentation sticker but it's no where near the sales tax. If you're not going to be in the US long, the boat could bounce between two or more states until you're ready to leave.
And some wonder why there are expats.

[alha]

Thanks for the reply. So then, back to my thought, I would then be wise to just register it in a state that doesn't charge sales tax, and pass up on that cost? Or is there a federal tax that would be due? Does it really matter where I register it, even if I own a home in MN, if I am not actually at that home most of the time? Will that make any difference with insurance? I know I have a lot to learn, and I do search the forum. I'll do more of that, but appreciate any suggestions.

[alha]

Originally Posted by Lepke

I live in Oregon - no sales tax - and bought a Canadian owned, US built, boat. Total import cost was about $12. I was an Oregon resident, but my residency was a commercial po box and a private marine dock address.
I would think it not too difficult to change your residency to a non sales tax state. Some states waive the sales tax if taxed object was owned for some period before moving into the state.
Another option would be a flag of convenience unless that complicates financing or insurance. Since you are planning on living outside the US anyway, foreign registration shouldn't hurt you. Some states require the non documentation sticker but it's no where near the sales tax. If you're not going to be in the US long, the boat could bounce between two or more states until you're ready to leave.
And some wonder why there are expats.

Would it make a difference if it was made in Europe? I hope to not have to finance it, but I am still at the beginning of the learning curve regarding insurance, so not sure about the flag of convenience, have to learn more about that.

How long would I have before I would have to move it between states, if I was going to work on it before sailing? Is there a state that would be better than others for doing so? I know FL has much to offer in terms of facilities and supplies for repair/upgrade, but there are of course other places on all 3 coasts that would be acceptable to do those tasks.

[Nicholson58]

First, If you are near the Great Lakes, Why don't you look for a lightly used fresh-water boat? There are at least 30 boats in the yard at Torresens in Muskegon & every coast town around the lakes has yards with boats for sale. No salt, short seasons and most only go out in good weather on weekends. Also, no transport costs or import duty.


USCG documentation home port is only part of its name. You could name it Frog Guts - Steamboat, Colorado as long as no one else has taken the name. Choose any name & place that suits you EXCEPT anyplace, California. They will attempt, incorrectly, to tax you. On sales tax, you will likely be obliged to pay sales tax where you or the boat live, most likely, where it is registered. I found there is not a sure fire way to escape paying tax unless you really live in a state with no boat transfer/sales tax.

[alha]

I am looking at Amel 53's, I wonder if there are any hanging around the great lakes? I would most certainly be nailed for sales tax, which would be pretty substantial on a boat of that type, hence purchasing it overseas. I can see I have quite a bit more research to do on this matter, but at least I have the time to get all those ducks in a row. I thought I'd ask on here to see if anyone has already blazed this trail before me, who could pass along a few nuggets of wisdom. So much to learn...

[Jman]

There are so many threads on avoiding sales tax it is becoming tedious. At the end of the day if you attempt to keep a new to you boat in a given state beyond a few months you are liable for that state's sales tax (if any), once you have have paid that tax (or not if it is not required), you are free and clear to move it to any other state generally after six months. The hailing port you use for UScG documentation has nothing to do with this.


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[denverd0n]

I could be wrong, but you appear to be under a couple of misconceptions. Where you register your boat, or where you list the home port if you federally document it, has no bearing on whether or not you have to pay sales tax.

Sales tax is due in the state in which the boat is purchased/sold. Many states have a provision that allows you to avoid the sales tax if you move the boat out of the state within a certain time frame (usually 30-90 days). Most states also have a provision that if you bought the boat recently, and didn't pay sales tax where you bought it, then you have to pay a use tax to them. So you don't usually avoid the tax by buying the boat in one state and moving it to another. You have to pay the tax to one state or the other.

If you buy the boat overseas then you will have to pay an importation tax, and most states will also charge you a use tax, when you bring it to the United States.

Now, if you buy the boat in the U.S. and then move it completely out of the country, you may be able to avoid the sales tax that way. But then, typically, if you ever bring the boat back to the United States, you will have to pay the tax at that time. So they get you one way or the other.

As for registration, you can't just pick a state to register the boat in. Generally speaking you have to register the boat where you are keeping it. Go ahead and register your boat in Delaware, for instance, but if you bring it to Florida and stay more than 90 days then Florida requires you to register the boat here.

If you are looking for general information I would suggest you search the forum, as the subject has been discussed ad nauseum. You can also search the websites of specific states, for their specific information, as each state is a little different. If you have particular questions then more details about what you have in mind will get you more detailed answers.

[alha]

Jman and Denverd0n, thanks for the explanations. I'll keep doing research on this and try to keep up on changes to the laws so when the time comes, I will be sure that everything is above board and within the law, because at the current selling prices of the boats I have been looking at, the tax itself is in the neighborhood of $15-20k, which works out to be a nice chunk in the cruising kitty.. One question though, if you are out of the country for years, say 5-10, and come back with a boat that has (sadly) depreciated greatly over that time frame, how would they attempt to base the tax on? Surely not on the price you paid for it 10 years ago?

[Moody46CC]

DenverDon has given you good advice. Just one addition. In most states, when you bring the boat in to dock or moor it, will ask for proof of sales tax when you register the boat. If the state where you did pay the tax has a lower rate than the one in which you are now registering it, that state will gleefully ask for the difference. And, of course, you will have to pay property tax annually if the state or county has one. Sadly, most do.

[denverd0n]

Originally Posted by alha

JOne question though, if you are out of the country for years, say 5-10, and come back with a boat that has (sadly) depreciated greatly over that time frame, how would they attempt to base the tax on? Surely not on the price you paid for it 10 years ago?

No, you would pay tax based on the value of the boat at that time.

As for the comment about property taxes on boats, I don't know about "most." I know that North Carolina does charge a property tax. I do not believe that Georgia or South Carolina do. I am absolutely certain that Florida does not.

[Moody46CC]

Do not know about Georgia, but South Carolina does tax boats as personal property and at a rate much higher than cars. Each county sets its own rates, and mine (Charleston) is truly ugly. As a result, I keep my boat in VA where the tax is 80% less. In VA, taxes on boats are by counties; near or in Norfolk (and Lancaster County--Northern Neck) there are no taxes. In VA, 1 January is the day of record. Where the boat is that day is where you pay.

Owing to some scandals, SC has become aggressive at imposing the boat tax. Check out the rules very carefully before making a long stay. People who have wintered over in Charleston have had some nasty shocks. And if you thnik a tax agency will admit to a mistake, well, ......

[KidSheeleen]

A great source for freshwater great lakes vessels is WWW.greatlakesscuttlebutt .com Has both brokers and marina locations' boats for sell, and articles . as was said earlier, most boats fresh water use and short season for boating. thousands of sail/power boats in the G lakes.