Boat Registration Regulations

[uweboerst]

I apologize in advance if my questions are all too obvious for you, but with my German background I’m still struggling now and then with American (state) laws and I foud contradicting information in the Internet…


So that’s the situation: We recently bought a sailing catamaran in New Jersey. Our home address is in California and we are planning to do the ‘Great Loop’ within the next few years. That means – at least for the next few years - the boat will not have a proper ‘home port’ and no state where it will be dominantly located. During the winter season, we want to keep the boat on the dry in the state where we will be at the time. The boat was also US Coast Guard documented by the previous owner.


Here are my questions:
1. Where do we have to (state) register the boat. In New Jersey (where the boat was purchased), in California (where we live) or would both be legal
2. Where would we have to pay the sales taxes and/or could we save money, if we register it in one state and not the other?
3. Would we have any advantages (i.e. sailing to Canada) if we also renew the Coast Guard documentation?


Thanks for sharing your experiences and knowledge




Uwe

[MarkSF]

If you are not a US citizen, you cannot have the boat USCG documented in your name, anyway. You will have to de-document the boat, then state register it. I would recommend the services of a marine titling company to do this, as it is reasonably complicated.

If you have not done anything yet, the boat is still USCG documented in the previous owner's name. You need to do something about this.

[JPA Cate]

1. Where do we have to (state) register the boat. In New Jersey (where the boat was purchased), in California (where we live) or would both be legal

Check with the individual States.

2. Where would we have to pay the sales taxes and/or could we save money, if we register it in one state and not the other?

I believe Delaware does not tax boats, but again, where you pay the taxes will be determined by the State. Some of them may tax you after a "residency" of only a few months.

3. Would we have any advantages (i.e. sailing to Canada) if we also renew the Coast Guard documentation?

You'll receive lots of answers to this one, but I think you will not be able to avoid taxes, due to the lengths of time the boat will be in the individual States. You did not mention if you are a US citizen. If you are not, you may be ineligible for C.G. Documentation, much as we are ineligible to register our yacht in Australia, as we are not Australian citizens.

Good luck with it.

Ann

[uweboerst]

Ann and Mark

thanks for your answer. My wife is a US-Citizen, so the boat will be registered and/or documented under her name. Again I really did a longer research in the Internet and didn't find out, in which state it has to be registered. We went to the DMV in California and they obviously didn't exactly know it. We were told, we could do it however we want...
If it all depends on the states law, could that mean, that we have to re-register the boat in a state during our Great Loop trip if we keep it there for a few months?
As far as I understood, the boat has to be state registered even if it is US Coast Guard documented. Am I at least right with that?
Uwe

Originally Posted by Ann T. Cate

1. Where do we have to (state) register the boat. In New Jersey (where the boat was purchased), in California (where we live) or would both be legal

Check with the individual States.

2. Where would we have to pay the sales taxes and/or could we save money, if we register it in one state and not the other?

I believe Delaware does not tax boats, but again, where you pay the taxes will be determined by the State. Some of them may tax you after a "residency" of only a few months.

3. Would we have any advantages (i.e. sailing to Canada) if we also renew the Coast Guard documentation?

You'll receive lots of answers to this one, but I think you will not be able to avoid taxes, due to the lengths of time the boat will be in the individual States. You did not mention if you are a US citizen. If you are not, you may be ineligible for C.G. Documentation, much as we are ineligible to register our yacht in Australia, as we are not Australian citizens.

Good luck with it.

Ann

[Sun and Moon]

Ideally, the boat is registered in the state it lives in (or spends the most time in). That is not necessarily the same state you live in. If the boat is spending time in several states, you can probably choose which one works for you.

There is no real requirement to prevent you from registering the boat in any state you choose, or registering it in another country. However, if the boat spends more than X days in a state, that state can impose taxes on it no matter where it is registered. The number X depends on the state, but I think is between 30 and 120 in all states. Some states, like Florida and California, are more aggressive than others in going after this revenue. And I think that some states (like Florida) don't count time the boat spends on the hard, only time that it is in the water.

If you want a cheap place to register the boat, look at Colorado.

Sorry if this is too vague to help. If you post more specifics about where you plan to use and store the boat I'm sure people will chime in with suggestions.

[Greenhand]

If you choose a home port in California, they will be aggressive about property taxes. You will have to prove that the boat isn't in California. If you don't have a marina bill, this can be difficult to accomplish.

Each state has different laws, so you will have to keep an eye on them as you move around. On the east coast, many states require their registration if you are in the state for more than 30-90 days, even if it is USCG documented.. On the west coast, fewer states require state registration in addition to USCG documentation.

[David M]

Document the boat federally in your US citizen wife's name. Then you will not have to register it in any state.

You will still have to pay luxury taxes in the state where you keep the boat....but that is a different topic.

[hellosailor]

Uwe-
You will find that most, if not all, US states have "motor vehicle" or "vessel" regulations on state web sites. If the boat has an auxiliary engine permanently installed, it is a "motor vehicle" in many states, a "boat" or "vessel" in others.


As to where you must register or document it?


The "proper" address would be your wife's residence, or the location where the boat actually will be kept. Either one. Since the boat will be voyaging, one might suggest your wife's residence is the proper location. The US Vessel Documentation Center can be reached online and by phone, and they are most helpful with any concerns about documentation.


Be aware that there are tax implications as to where the boat is bought and documented or registered, and California is notorious for trying to get money whether it is owed to them or not. And they demand stiff penalties and interest if that is not paid on time.


Also, to operate a boat with a motor in the state of New Jersey, you MUST have proof of an operator's certificate, either from your home state, or from NJ, or from one of the nationally accepted online sources. NJ is, as far as I know, the only state with this kind of "universal, no exemptions, no grandfathering" policy.


Some states will allow you to skip state registration for a federally documented vessel, most will not. Also be aware that there could be complications if your wife is the sole documented owner, for instance, if she takes ill and someone asks "Who are you?" well, you're not the owner, are you? You might want to check into something like putting together an inexpensive LLC where you are the 49% owner of the boat, which still allows her (as the 51% owner and US citizen) to have the LLC document the vessel, while showing you are an owner.


Insurance may also be a consideration, as most insurance will be priced based on your geographic range, how far from "home" you are sailing. California to the East Coast might cost more than a boat registered in NJ, with a range of just half as much. (I think insurers might presume "California to nj" must involve the Panama Canal, one never knows how they think.(G)


Personally I would suggest keeping things as simple as you can, while accommodating your circumstances. Venue shopping, like documenting the boat in Colordado or Montana, while you both live in California and only one of you is a citizen, and there's no other relation to that state, is likely to get you a raised eyebrow and some extra unwanted attention to anyone who happens to be checking your papers, for any reason.

[accomplice]

Keep the boat US documented, and you only have to register it in any state where you keep the boat in excess of their time limitation. (60 days in many states) -- and if you don't exceed their time limits you would not need state registration at all.

I suggest keeping CA out of it -- not include them as hailing port or anything.

If you seek to register it in a state, they *may* wish to collect sales tax and/or annual excise/use tax. There are some states that do not do this... for example, Rhode Island has neither a boat sales tax nor boat property tax, but does have a requirement to register if you're in RI waters more than 60 days.

[Greenhand]

Originally Posted by David M

Document the boat federally in your US citizen wife's name. Then you will not have to register it in any state.

As several posters have pointed out, this is not necessarily true. There are several states that require state registration along with USCG documentation. Please look up the specific state information for anywhere that you will spend more than 30 days!

[denverd0n]

Originally Posted by David M

Document the boat federally in your US citizen wife's name. Then you will not have to register it in any state.

Frequently stated, but not true (at least, not necessarily so). In my own state of Florida, if you keep it here for more than 90 days then you will be required to register it with the state, even if it is federally documented. This is true for several states.

So, to the OP, where you have to register it depends on where you are and how long you stay there. Yes, if you travel slowly, and stop in multiple states for months at a time, you may have to register it in state after state as you move along.

The good news is that state registration is usually not terribly expensive. Here in Florida, unless you own a super-yacht, you would pay less than $200 per year.

Good luck.

Edit: Looks like you beat me to the punch, Greenhand.

[newhaul]

In Washington state you pay $25.25 each year after the first year in which you pay sales tax at the rate of 9.8% on the stated purchase price residency required

[uweboerst]

Dear all,
thank you for your contributions and suggestions that helped me to see things a little bit clearer .
I also posted the question at another forum and got many (partly contradicting) answers.
I try to summarize what (I think) I’ve learned:

• a boat can only be USCG documented for a US citizen (luckily my wife is one…

• if it is documented, it has to show the vessels name, hailing port and state at the stern

• the hailing port of a documented vessel can be chosen within the US without any geographical restriction and has not to be the owner’s residence town, or within the state, where the boat might be state registered
• if it is documented, most states require a state registration if the boat is longer than X days (determined by state law) in this particular state
• if a documented boat is more or less permanently moving around (stays per state are shorter than the X days mentioned above), it has not to be state registered at all

• sales taxes only have to be paid, when the boat is state registered
• sales taxes vary from state to state, some don’t even have one
• a boat should be state registered in the state, where it is dominantly in use, it doesn't matter, where the owner's permanent residence is
• if a documented boat is state registered, it wouldn’t get (and display) a state registration number
• a boat on the hard (i.e. for winter storage) is not classified as ‘in use’ causing the accepted X days stay in a state to be extended by the time on the hard

Please insist, if one of these statements is not right.
What I have not yet fully understood is what happens, if I move my boat (no owner change) from a state with a low or non-existing sales tax after a while to a state with a higher sales tax and re-register it there.
Would I than still have to pay the sales tax in the ‘new’ state?
Uwe

[hellosailor]

Uwe-
A few slight but important errors.


"

• a boat can only be USCG documented for a US citizen

Or a corporation that is at least 51% owned by US citizens. 51% is technically incorrect, there's a formula used that basically translates into "51%" though/

• • if a documented boat is more or less permanently moving around (stays per state are shorter than the X days mentioned above), it has not to be state registered at all

Not quite. Some states will require SOME state registration for any motor vehicle (car, boat or plane) with an engine in their state. I believe Florida is one, where there is no grace period. You enter the state by "motor" equipped vehicle of any kind, and it had better have a state registration then and there. Any state, but before it enters Florida.

• • sales taxes only have to be paid, when the boat is state registered

No. Sales tax has to be remitted to any state that charges it upon a sale taking place within that state. Sales tax is normally remitted (by the buyer) and collected (the the registration clerk) at registration. However, sales tax laws vary by state. If you buy a boat in some other state, you may be required to pay USE TAX by your home state. In some cases, that is due immediately, and it is only waived if the boat never enters your home state. Bring the boat home 20 years later, never having paid use tax on it, and you will be hit with use tax plus 20 years of penalties and interest. And they will place a lien on the boat until you have paid.


You need to check the sales tax laws, and the use tax laws, for your home state as well as ay other state that has an interest in the transaction. Those would include any state where the sale takes place, or where the boat is registered, or where the home port and documentation and made. All of this varies from state to state.


Just think of us as being the same as the EU. Back when it was all borders and different currencies and no "EU" or Schengen nonsense.

• If a documented boat is state registered, it wouldn’t get (and display) a state registration number
  • a boat on the hard (i.e. for winter storage) is not classified as ‘in use’ causing the accepted X days stay in a state to be extended by the time on the hard"

Probably, but again that will vary by state law. In some states they don't care where ir why the boat is there, after ## days they own you and tax you and file liens. In other states, a boat must be "in the waters" of a state, or they don't care. Even a single day-trip to the neighboring state (proven with a gas receipt, etc.) restarts the clock. In some states it is "contiguous days" and in others it is "days within one calendar year" *or* "days within one year" meaning, 365 consecutive days, regardless of the calendar year.


It's easy. Just like exchanging your lira for drachma for pounds and pence. (G)

[skipmac]

Hi Uwe,

I live in Florida, I used to be a yacht broker in Florida and researched the registration and tax issues very carefully.

Denverdon's answer is complete and correct.

A few points to emphasize.

Most states will want you to pay a sales (or a use tax but pretty much the same thing) if you register the boat in that state or buy it and keep it in that state or sometimes even if you move it to that state. Most states will give you credit if you pay the tax in one state so you won't have to pay twice. Sales or use tax usually 6%. A few states don't charge tax, RI is one but you will have to verify to other states you are exempt from paying tax to them.

Some states will also charge you a property tax on the boat every year. Sales tax is only once. CA is one that will tax you every year.