US Cruising Permit for Canadian (and state tax question)

[KevinE]

Canadia citizen looking to buy a boat on the eastern seaboard and wondering what current rules are for getting the boat out of country within 90 days of purchase in order to get a cruising permit (thing there was state tax involved as well?)?

When we bought our last boat in Lauderdale we had to go to Bahamas and back to get our permit. Things get a bit more challenging though if farther up the east coast. Don't want to come back to Canada as tax would be payable as soon as we cross the border.

2012 cruising up the east coast from Bahamas, our cruising permit expired. We were in Annapolis and the way the rules read to me we had to get the boat out of the country to renew which meant Bermuda in the middle of hurricane season. Talking to other cruisers we got the name of a person in Baltimore who renewed our permit without issue.

As a side note, always surrender your cruising permit if leaving the states for any significant period of time to stop the clock.

[Montanan]

Originally Posted by KevinE

Canadia citizen looking to buy a boat on the eastern seaboard and wondering what current rules are for getting the boat out of country within 90 days of purchase in order to get a cruising permit (thing there was state tax involved as well?)?

When we bought our last boat in Lauderdale we had to go to Bahamas and back to get our permit. Things get a bit more challenging though if farther up the east coast. Don't want to come back to Canada as tax would be payable as soon as we cross the border.

2012 cruising up the east coast from Bahamas, our cruising permit expired. We were in Annapolis and the way the rules read to me we had to get the boat out of the country to renew which meant Bermuda in the middle of hurricane season. Talking to other cruisers we got the name of a person in Baltimore who renewed our permit without issue.

As a side note, always surrender your cruising permit if leaving the states for any significant period of time to stop the clock.

It appears you may be confusing / combining a few different subject matters together.

As to State Sales / Use taxation, that is an issue that is specific to each individual State, 50 States / 50 sets of rules. So review the laws in the State in which one either purchases the vessel and/or uses the vessel. There is no US Federal Sale or Use taxation, nor VAT / GST.


As to the 90 day period for temporary import under bond program:

Vessels that are entered into the United States for display at boat shows, testing, to take part in a race (not for money) and will not be in the United States for more than 90 days may be admitted without formal consumption entry or bond. A certificate identifying the boat will be issued to the importer and must be delivered with the vessel to the CBP office at the point of departure from the country. If a vessel entered for such purposes will be in the country for more than 90 days the importer will be required to post a bond. Any boats entered for sale or for sale on approval are not eligible for the Temporary Importation Under Bond (TIB) program and must be entered as a formal entry on a form CF7501.

As to the Cruising Permits:

References:

https://help.cbp.gov/s/article/Artic...language=en_US

Title

Pleasure Boats - Procedures for entering the United States


Summary


Date Published

4/11/2022 11:43 AM


Content


Small Vessel Reporting System (SVRS) is no longer in service and float plans will no longer be accepted.

Boaters looking for a new, faster way to report their arrival and/or apply for a registered boater program may use the CBP ROAM app, available for free on the Apple App and Google Play stores. Boaters may also continue to report their arrival via designated telephone reporting numbers, if desired.

All operators of a non-commercial small vessel/pleasure boat must report immediately to the nearest U.S. Customs and Border Protection (CBP) Port of Entry upon arriving in the United States from a foreign port or place.

If referred for a formal entry, the operator of the pleasure boat/small vessel must provide a formal vessel entry on CBP Form 1300 within 48 hours. The operator will also need to report any foreign merchandise on the boat that is subject to duty.

Upon arrival in any port or place within the United State including, the U.S. Virgin Islands, any vessel from a foreign port or place, any foreign vessel from a port or place within the United States or any vessel of the U.S. carrying foreign merchandise for which entry has not been made, the master of the vessel must immediately report that arrival to the nearest CBP facility. The CBP officer may require the production of any documents or papers deemed necessary for the proper inspection/examination of the vessel, cargo, passenger, or crew.

CBP has designated specific reporting locations that are staffed during boating season for pleasure boats to report their arrival and be inspected by CBP. The master of the boat must report to CBP telephonically and be directed to the nearest Port of Entry to satisfy the face-to-face requirement, or report to the nearest designated reporting location along with the boat's passengers for inspection.

A cruising license exempt pleasure boats of certain countries from having to undergo formal entry and clearance procedures and can be obtained from the CBP Port Director at the first port of arrival in the United States. A U.S. pleasure craft and a foreign-flag vessel without a cruising license (30 feet or longer in length) must pay an annual decal user fee of $27.50. User Fee Decals may be purchased online through the Decal Transponder Online Procurement System DTOPS.

The DTOPS is an easy way for commercial vehicles, private aircraft and private vessels (thirty feet and over) to purchase their annual user fee online. Commercial vehicle purchasers also have the ability to request replace transponders, transfer vehicles into their fleet and maintain their fleet inventory.

While vessels that receive the CBP Cruising License may have some CBP reporting requirements reduced, the license does not exempt these vessels from the requirements for filing the Notice of Arrival (NOA) with the National Vessel Movement Center (NVMC) with the U.S. Coast Guard.

Under 33 Code of Federal Regulations (CFR) § 160.205 the owner, master, operator, or person in charge of a vessel must submit a NOA with NVMC prior to arrival into the United States. For more information on the reporting requirements, please visit the National Vessel Movement Center (NVMC).

U.S. citizens should carry proof of citizenship such as a passport or birth certificate. Canadian citizens should present proof of Canadian citizenship; Mexican citizens may present a border-crossing card. Canadian, Mexican, and U.S. citizens must carry a passport if they are arriving in the United States from outside the Western Hemisphere.

Permanent residents of Canada who are nationals of a designated Visa Waiver Program (VWP) country, may enter the United States by means of a pleasure boat along the northern border of the United States, if in possession of a valid, unexpired, passport issued by his or her country of nationality, and an unexpired multiple entry Form I-94W, Nonimmigrant Visa Waiver Arrival/Departure Form, or an unexpired passport, valid unexpired United States nonimmigrant visa and I-94 Arrival/Departure Form. Entry may be made only as a visitor for pleasure.

If your boat has anchored or tied up, you are considered to have entered the United States. No one shall board or leave the boat without first completing customs processing, unless permission to do so is granted by the CBP Officer in charge. The only exception to this requirement is to report arrival. If it is necessary for someone to leave the boat to report arrival to CBP, he or she must return to the boat after reporting and remain on board unless instructed otherwise. No one who arrived on that boat may leave until the CBP Officer grants permission to go ashore. A report of arrival into the United States should be made to the CBP office nearest to your point of entry. See the list of Pleasure Boat Locations.

For questions or inquiries, please contact the NVMC 24/7 line at 1-800-708-9823 or 1-304-264-2502. For questions/inquiries, send an email to sans@nvmc.uscg.gov

Further reference:

https://help.cbp.gov/s/article/Artic...ing%20licenses.

Title: Pleasure Boats - Obtaining a cruising license after old one expires


Summary


Date Published

12/3/2021 9:32 AM

Cruising licenses are normally valid for up to a year. These licenses can be obtained from the U.S. Customs and Border Protection (CBP) Port Director at the first port of arrival in the United States.

Under CBP policy, non-U.S. residents are not eligible for successive cruising licenses. A new license will not be issued unless the following two conditions have been met: (1) at least 15 days have elapsed since the previous license either expired or was surrendered, and (2) the vessel arrives in the United States from a foreign port or place. (Customs Directive 3130-006A) CBP will want to see foreign clearance paperwork as evidence that you are arriving from a foreign location.

Non-residents are cautioned to plan carefully so that the mandatory 15-day period does not fall in the middle of a planned stay in U.S. waters. It may make sense to surrender your cruising license to a CBP Officer when you leave the United States waters and then obtain a new one when you re-enter the United States.

Traveling outside of U.S. waters while your cruising license is still in effect does NOT fulfill the 15-day requirement.

[KevinE]

Thanks. To rephrase my question, if I purchase a vessel in say, the Chesapeake Bay, is there any work around to not have to take the vessel out of country and re-enter in order to get a US Cruising Permit? If I take the vessel back to Canada I would be subject to Canadian taxes. My intended cruising grounds are elsewhere so no desire to go down this route.

In my OP I alluded to previous experience where were renewed an expired cruising permit on a boat we used to have without having to do an exit and re-entry.

[Montanan]

Further reference:

Cruising Permits, boat registration, vessel register, USA.

[Ardbeg]

Montanan: Thank you for the summary. The only thing I did not see is how the rules change if skipper and crew are all NEXUS card carriers? Does that change anything.?

[flyingfin]

Just buy a vessel without Federal Documentation and simply register it with the State you will be staying in.

[AiniA]

Originally Posted by KevinE

Thanks. To rephrase my question, if I purchase a vessel in say, the Chesapeake Bay, is there any work around to not have to take the vessel out of country and re-enter in order to get a US Cruising Permit? If I take the vessel back to Canada I would be subject to Canadian taxes. My intended cruising grounds are elsewhere so no desire to go down this route.

In my OP I alluded to previous experience where were renewed an expired cruising permit on a boat we used to have without having to do an exit and re-entry.

We bought a boat in RI and took it to NYC to live on since my wife had a job there. After the boat was delisted with the USCG and registered in Canada I went to the nearest US Customs office, which was at a big container port, and they issued a cruising permit. They only gave us a one-year permit rather than an open-ended one which we should have had since we had residemce visas.

[Rumrace]

Dang. I just got insurance and left 4 days later for Canada. I was so happy to enter Lake Chaplain. Never got a cruising license never talked to coast guard. Finally entered Canada officially in Kingston Ontario. I didn’t have any flags with me. Missed our list. In Kingston I used a hair dryer to remove the lettering with port and state. We christened the boat with beer to make it an Honorary Canuck.
Maybe our picture is in US post offices.
Did you know Canadians represent the largest group of ppl overstaying their welcome in the US and the same is true in Canada.
Frankly I’ve always found the US Coast Guard top notch. The OPP Marine unit are great folks too. We have similar boarder issues to the US but they are tiny. Mexicans are welcome in Canada and can get a visa to work in one hour in good standing.
One winter 22,000 people from the US braved hunting trails in the winter to enter Quebec and Manitoba. One Syrian Couple arrived pushing a carriage. They had flown to Mexico entered US illegally gave birth and some generous American gave them a pram to carry on to Canada.
The country fell in love with them so we kept them.
So there is a real concern to protect our continent, but to honour those who join us in freedom.
My bad I promise next boat to follow the rules and pay the 32$. Dang

[hjohnson]

Originally Posted by Ardbeg

Montanan: Thank you for the summary. The only thing I did not see is how the rules change if skipper and crew are all NEXUS card carriers? Does that change anything.?

Nope. Co-owner and myself are both Canadian, and have NEXUS. The first time we crossed into the Gulf Islands (west coast), we had to pay PST/GST on our boat. No big deal, as her official valuation was only $6000 (thank you WA registration papers). At least we could do it with a credit card, over the phone, with no inspection?

[Montanan]

Originally Posted by Ardbeg

Montanan: Thank you for the summary. The only thing I did not see is how the rules change if skipper and crew are all NEXUS card carriers? Does that change anything.?

Ardbeg:

The NEXUS is related to Immigration, that is a visa program, to permit trusted persons for entry whereas the cruising permit is related to Customs and issued to the vessel [that is the imported good], basically the cruising permit is a Temporary Importation Document which is why it is issued to vessels that arrive from a foreign port and why the vessel must depart the USA every year and can only return after 15 days have lapsed as to being issued a new cruising permit.

The cruising permit is issued to the vessel, not the passengers and crew.
The cruising permit somewhat facilitates customs clearance procedures as one progresses to various ports of the USA.

NEXUS is a joint Canada Border Services Agency and U.S. Customs and Border Protection-operated Trusted Traveler and expedited border control program designed for pre-approved, low-risk travelers. Members of the program can avoid waits at border ssel and facilitates it's ability to transit between ports as to entry points by using reserved lanes at land crossings into Canada and the United States, by using self-serve kiosks at airports in Canada, the US and some international locations, or by phoning border officials for a marine entry. A NEXUS membership card is a valid document under the Western Hemisphere Travel Initiative, so it can be used in place of a passport, including by air if flying between the US and Canada.

The NEXUS card was created for low-risk, preapproved travelers to help speed up border crossings between Canada and the United States. As a NEXUS member, you bypass the regular line of travelers and enter a special security/customs line when you arrive in either country. These lines are typically much shorter, and the process is much quicker.

The NEXUS card also offers the benefits of Global Entry at no additional cost. NEXUS members can use Global Entry kiosks when entering the United States and also have TSA PreCheck eligibility.

In addition, the NEXUS card can be used in place of a passport when traveling between the U.S. and Canada. Be aware that when traveling by air from Canada to the United States, you can use your NEXUS card only at Canadian airports with a U.S. preclearance area. If the airport doesn't have a U.S. preclearance area, you'll have to use your passport to access your NEXUS benefits.

Snipets: https://www.marlinmag.com/cruising-p...-foreign-boat/

What is a Cruising Permit?
Under federal law, a foreign-flagged pleasure vessel may be issued a cruising permit by U.S. Customs and Border Protection, which enables a vessel to cruise freely in U.S. waters.

In other words, the cruising permit exempts pleasure vessels of certain countries from the requirement of undergoing formal entry and clearance procedures in the United States. In many states, including Florida, a cruising permit also allows a foreign-flagged vessel to avoid being subject to the *relevant-use taxes. Depending on the port or jurisdiction in which the application is submitted, Customs may require the vessel to clear through a foreign port before issuing the license.

The Rules Remain
A cruising permit does not dispose of all rules relating to a vessel’s travel within our borders. Even with a permit, the captain must notify Customs whenever the vessel moves from one port jurisdiction to another, or when it enters and departs U.S. waters. Depending on the size, a vessel may also be required to file a Notice of Arrival/Departure when bound for, or departing from, ports within the United States. Notices can be filed electronically on the National Vessel Movement Center’s website, and the amount of notice required prior to arrival depends on the length of the voyage from the relevant foreign port to U.S. waters. Failure to file a proper NOA can result in fines or the Coast Guard not allowing the vessel to enter U.S. waters until sufficient information has been provided.

Additionally, a cruising permit will be renewed only if at least 15 days have elapsed since the previous permit expired or was surrendered and the vessel arrives in the U.S. from a foreign port or place. Traveling outside U.S. waters while a cruising permit is effective does not satisfy the 15-day requirement. Hence, vessel owners must plan their cruising itinerary a bit more carefully as the renewal date approaches.

Open for Interpretation
Strangely, ports oftentimes interpret the rules relating to cruising permits in different ways. For example, the port of Miami might issue licenses *differently than the port of Fort Lauderdale. Some ports are simply sterner than others, but the rules have become stricter in all jurisdictions in recent months. For example, cruising permits are typically issued for one-year periods, but port officials are now consistently awarding shorter cruise periods to certain vessels. Additionally, some ports are not allowing permits to be renewed if the relevant vessel is for sale, even if it is duty paid in the United States. These procedures are especially enforced against vessels with foreign owners, and the problem is exacerbated by the lack of consistency in the procedures, even within the same port office.

[Montanan]

Originally Posted by AiniA

We bought a boat in RI and took it to NYC to live on since my wife had a job there. After the boat was delisted with the USCG and registered in Canada I went to the nearest US Customs office, which was at a big container port, and they issued a cruising permit. They only gave us a one-year permit rather than an open-ended one which we should have had since we had residemce visas.

The visa is issued to a person and is a permit to be in country for a duration of time, the cruising permit is issued to the boat to facilitate its customs procedures upon entry into each and every port of the USA. The two are distinctly different issues and procedures.

Even citizens must clear customs when entering the USA, the visa status does not change the customs requirements.

Many cruising permits are issued for less than one year.

[Montanan]

Originally Posted by KevinE

Thanks. To rephrase my question, if I purchase a vessel in say, the Chesapeake Bay, is there any work around to not have to take the vessel out of country and re-enter in order to get a US Cruising Permit? If I take the vessel back to Canada I would be subject to Canadian taxes. My intended cruising grounds are elsewhere so no desire to go down this route.

In my OP I alluded to previous experience where were renewed an expired cruising permit on a boat we used to have without having to do an exit and re-entry.

. . .

As a side note, always surrender your cruising permit if leaving the states for any significant period of time to stop the clock.

The issuing officer used a bit of discretion that was beyond their authority because the vessel is required to depart the USA and reenter from a foreign place or port so as to have its original temporary importation into the USA to be discharged and then to reenter with the issuance of a new temporary importation license / permit.

Recopying from my prior post.

Non-residents are cautioned to plan carefully so that the mandatory 15-day period does not fall in the middle of a planned stay in U.S. waters. It may make sense to surrender your cruising license to a CBP Officer when you leave the United States waters and then obtain a new one when you re-enter the United States.

Traveling outside of U.S. waters while your cruising license is still in effect does NOT fulfill the 15-day requirement.

One does not so much as Stop the clock when surrendering your cruising permit upon leaving the USA, instead one is fulfilling the requirement to discharge your temporary importation by accomplishing an exportation of the vessel [the imported good]. Upon reentry a new temporary importation is started by issuance of a new license, albeit only after the 15 day period has been fulfilled.

[KevinE]

Originally Posted by Montanan

Further reference:

Cruising Permits, boat registration, vessel register, USA.

My question still remains: if I purchase a boat in the states, do I have to take it out of country and re-enter to obtain a cruising permit? This was the rule we followed with our last purchase, has this changed?

[Stmurray62]

Also, in Florida, if a non Florida resident, you get the 90 day “permit” then an additional 90 days for $450 fee. Too bad your broker didn’t advise you, as you could have kept the boat in FL (tax free) a bit longer.

Also, you should investigate registering the boat in A US star (RHode Island is a very cheap place to register). That should help your entry back into the USA..

[Montanan]

Originally Posted by KevinE

My question still remains: if I purchase a boat in the states, do I have to take it out of country and re-enter to obtain a cruising permit? This was the rule we followed with our last purchase, has this changed?

There does not seem to be any change.

To be sold in the USA, the vessel must have been imported into the USA thus it does not need to be reimported.

If you foreign flag the vessel it has become of different status and must then clear customs. The cruising permit just simplifies matters modestly and is available to select foreign country flag status vessels.


Reference Article Author: BY DAVID R. MAASS, Alley, Maass, Rogers & Lindsay, P.A.

FOREIGN-FLAGGED YACHTS, CRUISING LICENSES AND OFFERS TO SELL OR CHARTER

https://iyba.org/news-detail/foreign...0%282012%29%5D.

Several U.S. Customs and Border Protection (CBP) offices in Florida recently have taken the position that foreign-flagged yachts that are offered for sale or charter are ineligible for a cruising license regardless of the yachts’ duty status. Customs reasons that any offer to sell or charter a yacht, even an offer that does not trigger liability for duty, amounts to engaging in “trade” and that vessels engaged in trade are ineligible for a cruising license. This article briefly explains the legal background to the current controversy about cruising license eligibility.

Under federal law, a foreign-flagged vessel “used only for pleasure” is eligible for a cruising license, which enables the vessel to cruise freely in U.S. waters, provided the vessel’s flag state recognizes similar privileges for U.S.-documented vessels cruising in the flag state’s waters [46 U.S.C. § 60504 (2012)]. A federal regulation, 19 C.F.R. § 4.94 (2016), in addition to listing compliant flag states, provides that a cruising license will be issued to a foreign-flagged vessel “subject to the condition that the vessel shall not engage in trade or violate the laws of the United States in any respect.” The regulation does not say what it means to “engage in trade.”

In 1983, Customs added a warning regarding dutiability to the text of the cruising license, which is prescribed by regulation [48 Fed. Reg. 48,653 (Oct. 20, 1983)]. The warning advises owners that offering a foreign-flagged yacht for sale or charter generally triggers liability for duty. At the time, Customs explained that it was adding the warning to alert owners of foreign-flagged yachts to existing law regarding dutiability. Customs did not suggest that the warning was meant to expand the requirements for issuing a cruising license, which have nothing to do with a yacht’s duty status. Customs also acknowledged that the warning would not apply to all foreign-flagged yachts, some of which are not dutiable because they are already duty-paid or were U.S.-built and never exported.

Against this background, Customs recently has taken the position that the warning means that a foreign-flagged yacht offered for sale or charter is ineligible for a cruising license, even if the yacht is non-dutiable. Customs apparently reasons that the language regarding offers to sell or charter relates to the prohibition on engaging in trade: a foreign-flagged yacht is engaged in trade, and therefore ineligible for a cruising license, if offered for sale or charter. However, as explained above, the language about offers to sell or charter was added only to alert owners to existing law regarding dutiability, not to expand the requirements for issuing a cruising license, which are unrelated to dutiability.

Moreover, although the relevant regulation does not specify what it means to “engage in trade,” the interpretation of related statutes strongly suggests that the term does not include offers to sell or charter. For example, federal law provides that a U.S.-documented vessel that carries only a recreational endorsement, much like a foreign-flagged yacht with a cruising license, “may be operated only for pleasure” [46 U.S.C. § 12114(b)]. This restriction means that a vessel with a recreational endorsement may not transport passengers or merchandise; however, it has never been interpreted to prohibit such a vessel from being sold, chartered under a bona fide bareboat charter, or offered for sale or charter, provided the end use is for pleasure. Under the vessel documentation statutes, a vessel is “engaged in trade” when it is used to transport passengers or merchandise, not when it is merely offered for sale or charter. There is no reason why a foreign-flagged yacht operating under a cruising license should be treated differently when the two statutes use almost exactly the same language to describe the pleasure-use restriction.

In short, it appears that Customs has plucked the warning that appears on cruising licenses from its original context and used that language to fashion a new requirement for issuing a license. Even if the new policy were based on a reasonable interpretation of the statute, such significant changes in policy are usually made only after a process involving public notice and an opportunity for comment by industry stakeholders. FYBA and other industry groups are currently working with Customs to reverse this new interpretation and ensure that non-dutiable, foreign-flagged yachts can obtain cruising licenses regardless of any offer to sell or charter those yachts.