buying a boat in america

[fender59]

Hi
I am considering buying a krogen 39 or 42 and sailing the Loop. Problem is I am English and I wonder what if any problems I will/could face in doing what I intend in terms of : customs issues, tax etc.

I dont want to find myself in the position of buying the boat and then not be able to go for the Loop.

Any advice/help would be very much appreciated.

Thanks

Chris

[boatman61]

Its all pretty straight forward.. your broker should have it all at his finger tips... Register SSR for the least hassle...
You may need a cruising permit.. but that depends on how long you intend to stay...

[osirissail]

First off, based on a lot of missing background information in your post - I would assume that you are solely a British/UK citizen and not a dual national (U.S. & U.K.) and the "Loop" is the journey from the US east coast to the Erie Canal to the Great Lakes to the Mississippi River and back around to the US east coast.

Given those parameters - purchasing a vessel in the USA is not difficult or a major problem for folks who are not US citizens/LPRs. And if you "Register" the boat in a State of the USA (e.g., Florida, etc.) there are no problems with the boat remaining in USA indefinitely.

However, if you want to register/document the boat in a country outside the USA then you get into the "cruising permit" arena which introduces maximum time limitations that the boat can remain in the USA. It would most probably be more sensible to purchase the vessel and keep it "Registered" in a USA State until you have finished "The Loop" and any other "in US waters" activities. If after that you wish to retain ownership of the boat and move it to places outside "US waters" then you could register/document the boat in another country.

That leaves only - you - and the limits on the maximum uninterrupted span of time you can stay inside the USA. So long as you do not attempt to take the boat outside "US waters" and then re-enter with the boat, your "visitor visa" obtained by VWP by arriving in the USA via a major commercial carrier will suffice. But there are time limits on how long you can wander about before having to "go home."

If you go to the expense and trouble to obtain a USA B1/B2 visa (multiple entry, multiple year) while still in the U.K. then you can wander about the USA and even take the boat out of and back into the USA (e.g., Bahamas). See: B visa - Wikipedia, the free encyclopedia

And you can extend it if desired from the normal maximum of 6 months to 1 year of uninterrupted time inside the USA. And if you "pop out" and visit another country and then re-enter your clock resets.

Customs only applies when you bring something of value into a country, not something purchased here and kept here.

Same with "taxes" - they vary with the individual State of the USA in which you purchase the boat and where you plan to Register/Document and keep the boat. Basically a boat needs to be "Registered" in one "State" even when you are moving the boat constantly from one State to another State - such as "doing the Loop." So purchasing and Registering the boat in a State without a Sales Tax could save considerable money.

[fender59]

Thanks for your assistance. It would seem (as you suggest) that the best plan of action is to buy and register in a particular state. Which I will now do.

The only question I now have is regarding the issue of Sales Tax. If for instance I purchase the boat in a State that has sales tax (by virtue of the boat being in that State at the time of purchase) can I register it in another State thereby avoiding Sales Tax. The other point here is a non resident liable for sales Tax.

I can only thank you sincerely for the advice, it has saved me a lot of worry. By the way you are correct in that the Great Loop you refer to is the intended route.

[hellosailor]

Fender, registering the boat in any State may be problematic for you. Registration is sometimes limited to residents, with proof of residency. And insurers may not be willing to insure a boat for you in this situation. Make sure that you can register and insure the boat as you intend before you make the purchase and start the clocks running.

There is, or was, some obscure and quirky remnant of the War of 1812 that got into the peace treaty and from there into title 10 of the US Code, ( "10 USC ### etc.") IIRC, which also allows British flagged vessels to travel considerably up the Mississippi River without the usual Customs clearance. Your broker, or our ICS, are both unlikely to have any idea about that but since it is on your route, you might want to check into that as well.

Of course if you are UK-flagged your insurance will need to allow for the non-UK cruising area, that's still something to enquire about.

[jeremiason]

Originally Posted by fender59

The only question I now have is regarding the issue of Sales Tax. If for instance I purchase the boat in a State that has sales tax (by virtue of the boat being in that State at the time of purchase) can I register it in another State thereby avoiding Sales Tax. The other point here is a non resident liable for sales Tax.

Each State has its own tax laws and they vary quite a bit.

As a rule of thumb you are not liable for sales tax if the boat leaves the State it was purchased in within 90 days, again some states give more or less time depending on their laws.

Registering it in Florida or another State normally works, as long as the boat doesn't enter the State for a certain period of time, normally a year, but again this varys.

Some States won't let you register a boat in their State, if you not resident as well, which opens you to tx liablility.

The bottom line is check with the Yacht Broker and the States involved before you do anything.

Good Luck!

[osirissail]

As jeeremaison says - each State has its own tax laws - and it is well worth your time to research which State would be the most advantageous to you. Sales Tax is attached to the physical item, not the person purchasing the item. There are ways to "take delivery" of the boat in your selected non-Sales Tax State that brokers should be able to set up for you.

Where the boat you wish to purchase is located is a major first consideration. Florida, for instance has a 6% Sales/Use Tax but is very lax about having an address. You can probably set up a deal with St Brendans Isle mail service - see: St. Brendan's Isle - Cruisers Home Port™
to get an address for your purchase and registration of the boat if it is located in Florida.

If trying to avoid/save on paying a State's Sales/Use tax you should find a non-Sales Tax State that allows you use a Mail Service organization as your "residence" in that State.

If the boat you want to purchase is not in the same State then purchasing it "across State lines" and moving it from its sales location to your adopted non-Sales Tax State and registering it there should avoid paying Sales Tax. However, as mentioned by others, there are time limits on how long you have to move the boat out of the purchase State. That varies with each State. A good broker should be able to advise and set that up for you.

[Syserenity]

Hello Fender59
I am Swiss citizen without Green Card nor Residence in the USA and have just purchased a 31-foot Hunter and registered in the State of Texas. As an alien non resident you will have to delete any USCG Documentation on the vessel, as no non-American citizen is entitled to have a vessel documented by USCG.
As per the sales taxes, you will have to pay them. If the boat has been in one State registered, then you can overtake that register, paying taxes and the best, you give an address at the preowners address. If you intend to travekl within the USA, make sure you don´t leave the boat more than 90 days in another state. Otherwise you will be asked for the change of registration, which leads again into a trouble maybe with USCG, as you may requiere a documentation to traspass the title from one state to another, depending on the state.
In a conflict with the USCG Regulation, you don´t like to run into, since then you are asked to leave American waters within 10 days, with a registration in another country. American laws can be tricky, but at the same time pretty easy.
Good luck in your project...

[hellosailor]

"If the boat has been in one State registered, then you can overtake that register, paying taxes and the best, you give an address at the preowners address."
If you are saying that you can use the previous owner's address for the registration, no, you cannot. That would be considered fraud since it is not your address, and grounds for expulsion from the US, as well as criminal penalties.

" If you intend to travekl within the USA, make sure you don´t leave the boat more than 90 days in another state." The time period varies and needs to be checked for each state. You are probably safe up to 89 consecutive days in any state, but on the 90th day things may change. Or not--you must check for each state.

"Otherwise you will be asked for the change of registration, which leads again into a trouble maybe with USCG, as you may requiere a documentation to traspass the title from one state to another, depending on the state."
No, the USCG will not be involved with matters of state registration. No, you will not be required to have federal documentation to transfer (traspass is not a word here) the title from one state to the next.
You are more likely to have a problem because you have no residency address and states address that differently.

"In a conflict with the USCG Regulation, you don´t like to run into, since then you are asked to leave American waters within 10 days,"
I think there's more confusion with state and federal matters here. If the boat is state registered, the USCG will not ask anyone to remove it from the country. They have no jurisdiction to do that. If the boat is US-documented (which aliens cannot legally do) or if the boat is foreign-flagged and in violation of federal laws, then yes, you may be asked to leave with the boat.

All of this really becomes simple if you do it properly. If you are a bona fide resident alien, or you are residing in one state under some extended entry, then you have the option of registering the boat in that state, or flagging it with a foreign flag and bringing it in under a national cruising permit, which also exempts the vessel from any state registration requirements if you are moving from state to state.

[ranger58sb]

Fender59, there's a kiwi who had been doing the loop (although now currently returned to NZ), and he's 'blogged a lot about his buying/paperwork experiences.

See Loopy Kiwi for details.

-Chris

[fender59]

Thanks for all your help seems, to be a conflict of information between Syserenity and Hellosailor . The point is that my residence while in America will be on the boat. Hope that clarify s the situation.

Thanks for everyone's help up to this point.

[AnsleyS]

I have a friend who is selling a Krogen 38 cutter.

http://www.yachtworld.com/core/listi..._id=18824&url=

[twistedtree]

Originally Posted by ranger42c

Fender59, there's a kiwi who had been doing the loop (although now currently returned to NZ), and he's 'blogged a lot about his buying/paperwork experiences.

See Loopy Kiwi for details.

-Chris

+1 on reading up on what Phil (Loopy Kiwi) did. He researched all this very carefully and turned up all sorts of little gotchas relative to advice he received from various folks. He posted a lot about the trip pre-planning, boat buying, registration, and taxes on the GreatLoop.org forum. There's probably additional info there that complements what's in his blogs. And then drop him a note. He's a good guy, though I haven't met him personally.

By the way, he ended up registering the boat in New Zealand. Everyone's situation is a little different, so you might come to a different conclusion yourself, but I think his research was quite good. People would tell him - oh, just go do this that or the other and it will be fine. Then a few days later after researching it he would come back with solid, factual info showing why it wouldn't work, or side effects that were undesirable.

[hellosailor]

Hi fender. I expect some of the "conflict" is either misinformation or a translation error. A residence on the boat isn't a conflict, the problem is that in order to register a motor vehicle (including a boat which has an auxiliary or main engine) in most of the States, you often need to supply the authorities (usually a "Department of Motor Vehicle" or simply called "the DMV") with a fixed residential address. Some states will require that to be your actual residence, others will accept various service addresses, like a post box or a mail forwarder like Saint Brendan's Isle (SBI) in Florida.

State residency affects many things, such as eligibility to vote, or eligibility for the heavily-discounted resident rates at state universities, and many states have gotten strict about residency requirements because bogus residency can cost them a lot of tax money. i.e. they may subsidize a $20,000 per-annum college tuition down to $5,000 for a true resident so some clever folks are always trying to establish residency for the sole purpose of cutting their tuition bills. Transient boaters? Are just collateral damage.

Giving them someone else's address, where you never actually reside, would be illegal, especially if you were simply using it without their complicity. If the folks who sell you the boat agree to take mail addressed to you, and can be counted on to deal with it reliably, then "wink wink nudge nudge" that will work--but it it still technically illegal. If they drop the ball for some reason, you may have a problem.

Even US citizens who reside long-term on a boat or houseboat sometimes have problems with establishing a residency address, as there are some states that consider liveaboards to be vagrants no matter how long they've lived at the same dock.

Phil on Loopy Kiwi did things the right way, he foreign-flagged his boat and as such he has no concerns about US State registrations or tax issues. (Blue ensign on the boat's stern graphic, red ensign on the flagstaff ?!)

Although I should point out that in Florida they take those "manatee zone" restrictions quite seriously in some places, and there are plenty of watercops who do write up plenty of summonses there, although I doubt they'd deport you for that.<G>

[Syserenity]

Originally Posted by fender59

Thanks for all your help seems, to be a conflict of information between Syserenity and Hellosailor . The point is that my residence while in America will be on the boat. Hope that clarify s the situation.

Thanks for everyone's help up to this point.

Hello Fender59
As per my own experience, I do have a resident address at the preowners address, since there is the dock I have my boat on and this is the address I use. Therefore and as per explanation of the Immigration authorities, this is no fraude or any other legal implication.
When I purchased the boat and in order to accomplish with the laws of the state of Texas, I had to remove the USCG Documentation, which we did in less than 2 hours per Fax.
I was warned do by the USCG, that may some other state would ask for Federal documentation, if changing state register. This, I don't intend to do and so far, I don't mind with this.
In the practice I learned, that talking to Authorities in the USA gives you the response. There is a way and mostly Authorities have shown me the way to do so..... good luck in your project