Aussie Flag or US Flag on Vessel ?

[swagman]

Originally Posted by AllezCat

ok,
so since I am not a British subject I could document/flag with company in the channel islands, yes?
then back to the cruising permit issue for the USA.

Hi Allez Cat,
Practically, if you've a pal in the UK happy to advise UK Registration Authorities that you are sometimes resident in the UK at their address, and prepared to receipt and forward your registration paperwork when due, then you can amend the registration to your name and retain the UK flag...
No one is going to check twix immigration and registrations to see if this is true or false.
Plus if a boat has been VAT paid and stays out of the EU for more than (I believe 4 but please check it yourself) years then they are liable for new VAT when they come back in even with same owners. The is clearly open to local intepretation and certainly never heard of anyone being hit - nor when we returned after 5 years away did anyone expect us to pay VAT a second time.
But I understand they could if they wanted to.
If it were me and Australian and had a choice, then I'd go whatever route allowed me to fly my own countries ensign off the stern.
Good luck.
JOHN

[savoir]

Originally Posted by AllezCat

Thanks
Are you saying that boats incur real annual property taxes?
For you Aussies American property taxes are like "council rates", except can be exceedingly high.

I am saying exactly that.

Taxes on boats are state based and so vary enormously but I know a few of them. The state I know best is California where property taxes are charged annually by the counties - 0.5% is typical. NY has no property tax on boats but does have sales tax which is based on the purchaser's residence at the time of purchase not the place of purchase. That tax is payable once only by each NY resident owner. If you buy a boat from a state that has a sales tax you can claim a credit against your NY tax. NY also has a small use tax but that is not likely to exceed $100 pa.

Delaware registration is cheap and attracts no tax but if you move the boat to NY you only get a 90 day freebie. There is no sales tax on boats in RI either which might be a good deal if you are OK with keeping it up there.

Confused yet ?

[osirissail]

If you are a dual citizen - USA/Australia - you are subject to USA taxes on any income earned anywhere subject to a deduction for taxes paid to other countries, etc. That puts you under the auspices of the local States and their tax regimes just like a USA-only citizen.
- - Trying to evade sales taxes by claiming the boat is under a Australian flag and USA cruising permit can get into some very ticklish waters. Unless you a huge amount of money to spend on tax lawyers it would be the simplest solution to just ignore your Australian alter ego and go ahead and operate like a normal USA citizen boater.
- - If your job - tax home is in N.Y. you are liable for NY taxes. If you move your tax home to another State which coincidentally has no sales tax or a very low tax liability then you are doing what most other USA citizens do - avoid taxes - not, evade taxes. It is a tricky situation if you have a job and income specifically from one State.
- - Currently States are hurting on tax revenue and are looking to extract what they can from anybody who appears to be trying to evade taxes. And there are a lot of those folks keeping the tax man busy.
- - If you are only going to be in the USA for one more year or so you can avoid a lot of hassles by Titling and registering the boat in a State. This will allow you to use it in USA waters and the Bahamas. When you get ready to move the boat out of USA waters then you can decide whether to go with an Australian or USCG documentation (providing you are a USA citizen). If the boat is currently a "foreign" boat then there is the USA import duty, but otherwise you have only to title and register it with a State.

[hellosailor]

"NY also has a small use tax but that is not likely to exceed $100 pa."
Nope. NY has sales and use tax. Sales tax is applied to sale transactions that physically take place in the state. Use tax, at the same rate, is applied to sales transactions that have taken place OUT of the state, when the goods are brought back into the state.
The use tax is a legal way to collect the equivalent of sales tax, when the transaction itself falls outside of the venue and sales tax cannot legally be applied.

Part of the morass of taxation issues that arise from fifty" sovereign states" as well as a national tax system.

"If you move your tax home " It isn't even that easy. Regardless of your home, residence, or domicile, in most US states a boat with an engine in it is considered a "motor vehicle" and taxation and registration kick in when the vehicle itself--regardless of anything else--is in a venue for a set period of time. Typically ranging from 30-183 days, 60-90 being the most common AFAIK.

All good reasons to just "render unto Caeser" rather than trying to find a favorable venue, unless you really do the homework. Especially since in the US, the tax collectors generally have the authority to seize assets, including boats, and then tell you to defend your position, or pay up, before you can get them back.

[AllezCat]

I surrender.
Seems paying the import duty and NY tax is safest and easiest(if budgeted).
Will probably lose the "asset" of taxes previously being paid elsewhere regardless.

Just hope the marina continues to allow live-aboards after paying all that tax. Will ride out the 90 days first...
thanks for all the info, is very helpful for finalizing offer...

[billwa]

Out of interest, Australia recognises 64 shares in any commonwealth registered ship. Each share can have different ownership.

This gives some interesting possibilities regarding ownership and registration.

[savoir]

Originally Posted by billwa

Out of interest, Australia recognises 64 shares in any commonwealth registered ship. Each share can have different ownership.

This gives some interesting possibilities regarding ownership and registration.

Only for people with 63 friends.

[savoir]

Originally Posted by AllezCat

I surrender.
Seems paying the import duty and NY tax is safest and easiest(if budgeted).
Will probably lose the "asset" of taxes previously being paid elsewhere regardless.

Just hope the marina continues to allow live-aboards after paying all that tax. Will ride out the 90 days first...
thanks for all the info, is very helpful for finalizing offer...

You could always buy in another state and immediately commence Australian registration. There is another thread here on the subject but it seems to take about 2 months if the boat is outside Australia. After registration you could then enter NY on your Australian passport and claim a 1 year cruising permit with no charges for tax or registration. The downside is your boat must leave the country after that year.

[Johnathon123]

Originally Posted by AllezCat

Hi All,
I am an American and Australian citizen. But, primarily live in New York.
I intend to purchase a vessel soon. And live-aboard in NYC, Florida/East Coast with some offshore to Canada and Bahamas within the first year.
I just want to pick the best flag to avoid hassles/fees.
Some have suggested I Aussie flag it and get a 1 year cruising permit for USA.
If a vessel currently has British flag and VAT paid - then re-flagged as Aussie or USA , does the VAT remain for the next(European) owner?
What are the experiences and opinions?
Cheers

Rupert, is that you?

[savoir]

Maybe that pay for internet thing didn't work out too well. Hits on Times of London shrank 90%.

[AllezCat]

Originally Posted by Johnathon123

Rupert, is that you?

I used to work in the same building as him.
Surely he would have Cayman Island's rego, and not pay any tax...

[osirissail]

Originally Posted by savoir

. . . After registration you could then enter NY on your Australian passport and claim a 1 year cruising permit with no charges for tax or registration. The downside is your boat must leave the country after that year.

The OP is a USA citizen living in the US. You don't have to "check-in" to a USA State. You are simply there and if your boat is seen in one location for more than the 90 days (+/- depending upon the State) you must get a State registration decal and probably pay an "USE" tax, if the State has one.
- - Trying to bring the boat in under the Australian passport most probably constitutes tax evasion and besides serious fines and possible jail time - the IRS/State Tax officials take no prisoners - he could very well lose the boat. Even though the Federal Cruising Permit exempts you from paying State sales/use taxes, the States are starving for tax revenues now and the costs of lawyers and the hassles of a protracted tax court battle just might make paying the normal taxes the better deal. Most certainly if the boat was going to be kept out of USA waters for the vast majority of the time, if not all the time, then offshore documentation does have value for tax and liability considerations.
- - There are people who do tax evasion all the time and quite a few don't get caught - but - that is a really major risk and the OP needs to decide if the money saved is really worth the risk.

[AllezCat]

Originally Posted by osirissail

The OP is a USA citizen living in the US. You don't have to "check-in" to a USA State. You are simply there and if your boat is seen in one location for more than the 90 days (+/- depending upon the State) you must get a State registration decal and probably pay an "USE" tax, if the State has one.
- - Trying to bring the boat in under the Australian passport most probably constitutes tax evasion and besides serious fines and possible jail time - the IRS/State Tax officials take no prisoners - he could very well lose the boat.
- - There are people who do tax evasion all the time and quite a few don't get caught - but - that is a really major risk and the OP needs to decide if the money saved is really worth the risk.

yea I don't want to risk any tax problems.
But, last time I bought a boat I was Aussie citizen, US legal resident. I left had no residency. Documented the boat by mail as Aussie while in South Africa.
I had no other plans other than to cruise around the Caribbean having fun. I ended up in USA on a one year cruising permit for the boat(but I could stay indefinitely as a resident). Spent about 3 months in New York. Don't believe this was in any way trying to evade taxes.
If I were intending to only cruise(the world) and only visit New York for a short period I would not entertain the concept of paying taxes(and not obligated to ).
My intention now is to purchase a boat - probably in the Caribbean. Document in America, then bring it in to NY as a lawful tax-paying resident (which I definitely am as I successfully fought 2 IRS audits).
After 90 days I will know if I intend to remain here. I don't have a job, I have no property, I don't even have a lease. I have a furnished sub-let.

The issue with Aussie passport and documentation. The captain owner/crew are issued visas to a particular country as applicable. The Boat is a separate issue. I am entitled to document/flag the vessel in Australia/America because I am a citizen of both. And would only ever enter America as a citizen.
I don't believe most countries have different lengths of stays for different flagged vessels, as they do with people.
cheers

[AllezCat]

Another immportant question.
I traveled thru Cuba before as an Aussie and Aussie vessel - no worries.
Have any of you Americans been to Havana preceding US entry?

Would love to go again, but again I am risk averse with such things...
I would promise not to "trade with the enemy"...

[osirissail]

Again it's the complication of being a dual national that raises problems. A purely "foreign" citizen visiting Cuba and then sailing to Key West rarely has any problems or is almost never is questioned as US/Cuba law does not apply. However the waters between Cuba/Haiti and the Bahamas/USA are patrolled by the USCG and DEA and if your luck is not great you will be stopped/questioned about the boat, where you came from/going to, and the nationality of the boat and everybody on it. "Fudging" your nationality can raise suspicions and introduce a whole new world of hassles. The USCG has direct satellite computer links to their USA databases and can instantly verify - if the records exist - who you are and whether you are on a "watch list".
- - It is common for USA citizens on USA documented boats to visit an intermediate country like the D.R. or Bahamas or Mexico prior to entering the USA. Thereby you are checking-in from one of those countries, not Cuba. However, the Cuba/USA situation is very politically charged and depending upon the politics of the US officials you encounter you can have no difficulties all the way up to major harassment.

- - If your plans are only to cruise around the Caribbean, and not bring the boat into the USA or more specifically a State - then there is little advantage/disadvantage to USCG Documentation - you can go either way. Also there is no issue with State taxes until the boat actually enters a State as a USCG documented vessel.
- - For such a short time 90 days or less, leaving the boat in a Caribbean port keeps your options open until you have made a final decision about where you will work/live. - - Under normal times, the economy was good, folks were making money and paying taxes, everybody was happy - and - States generally were quite lax in enforcement/discovery of technical small violations. Times have changed (e.g. California) and now there is considerable zeal by State tax officials to find and scrape in every possible penny they can.
- - My personal suggestion would be to leave the boat in a Caribbean port and avoid the hassles while you concentrate on your career choices. Avoiding bureaucratically derived hassles or at least putting them off until you are settled would be my choice.