Paying Tax Again on your Boat

[RogerLloyd]

In the UK, the rule next year will be that if you take your UK tax paid boat outside the UK for over 3 years when the boat returns you will be eligible for another dose of tax, as if you had just purchased the boat from new, but based upon its current value (presumably, whatever that is with out a sale being made).

Please would you tell me the equivalent tax situation in the USA ? I.e. what tax is due on a USA tax-paid vessel returning to the USA after some years abroad ? Thanks

[Zzmeyer]

Of heavens! You will get lots of input here, much of which isn't correct. Taxes are based on the state. There are also lots of different types of tax. Sales tax, use tax, property tax. Depends on how long you have been out of the state. Etc. There are a thousand, "oh by the way" issues that determine tax. This should be a fun thread!

[skipmac]

ZZmeyer hit the high points but perhaps I can simplify it slightly. There basically two taxes.

1. Sales tax which for all practical purposes is the same as a use tax. Typically in the 6-7% range and varies state to state. A very few states charge no sales tax on the purchase of a used boat. All that I know charge for a new boat. Some states also put a cap on the sales tax so the buyer of a $1,000,000 yacht won't get taxed $60,000.00.

2. Ad valorem tax or property tax. This is an annual tax on the value of a possession. Many states do not charge an annual tax on boats or other possessions.

No states that I have ever heard of charge sales tax more than once for any reason. Even if you buy a boat in a state different than your state of residence and pay tax in that state, your state of residence will give you credit for the sales tax you paid and charge you only the difference if any.

The ad valorem tax is of course paid annually and is charged to people that are residents of that state but not generally to anyone just passing through.

[Allied39]

I think, could be wrong, but the OP is enquiring about sales tax
IE: he is asking if when us yanks sail our vessel out of the US do we have to pay import tax when we return?
. If so, what amount of time does apply.

I am no Tax expert but I am pretty sure you only ever import a vessel into the US once.

I believe that any vessel manufactured in the us does not pay import tax when returning.

I also do not know the rate, I would bet it's low compared to a lot of other "developed" countries though.

Yes state taxes are a different issue and I am not addressing that ....no dog in that fight.

Ok, let the games begin!!!

[dfelsent]

A vessel that is imported into the us and the exported and imported again needs to pay duty again. This is 1.5% of the sales price. Or 0. Or more. Depending on the country you are importing from. And where the vessel was built.

Separately a resident of a state may need to pay sales tax on the vessel. This is typically 0%-7%.
Can depend on the time between purchase and bringing the vessel into your state.

Some localities (state city or town) also assess a property tax. This is often nominal in terms of boat bux. Depends a lot on the “assessed value” which often drops like a stone over time.

If you change residence from one state to another, depending on time etc, you may be on the hook for the difference between the old state and the new state sales tax rate. Or nothing.

So:
Import duty. Maybe.
Sales tax. Maybe.
Property tax. Maybe.

Yeah it depends
on the country of origin.
On the state of your residence.
The municipality of your residence.
How long between purchase and bringing the vessel in state.
And if you change residence how long did you own the boat.

Really different depending on circumstance.

I paid 1.5%. Duty
And 6%. Sales tax
On $175000
And pay about $200 per annum to my town. Property tax.

In Massachusetts. Is what it is. Not complaining, just saying.

On a 1972 boat. That was imported in 1972 but was exported. So second importation. No discount for that.

Btw in Massachusetts town means town meeting government. We have an annual open town meeting. So I have a vote on that local tax rate.
Those town meetings are the only body that can change local taxes or local laws. Can be brutal debates but can really kind too.

[acem]

Every state is different.

I live in Arkansas. I have not yet had to pay sails tax on a used boat here and they came from out of state. I expect this to change in the future. I would pay sales tax only when I first register the boat in my name (when I buy it). You only pay sales tax once. I could travel the world for 20 years and not have to pay sales tax again so long as I owned the boat.

I have to pay property tax yearly but this is small bucks here.

I pay a fee every two years when I register the boat. Again small change.

Thx-Ace

[ggray]

Originally Posted by dfelsent

A vessel that is imported into the us and the exported and imported again needs to pay duty again. This is 1.5% of the sales price. Or 0. Or more. Depending on the country you are importing from. And where the vessel was built.

Is the OP really exporting and importing his boat? I would think that implies a sales transaction, not a matter of movement, or travel.

[CarlF]

I believe that a US CG documented boat is not exported unless it is reflagged to another country. It can leave the US indefinitely without owing the 1.5% import duty when it returns. It's probably advisable to pay the $26 each year to keep the CG documentation in force.

The US has no national VAT. A state "sales tax" is paid by the purchaser on buying a boat in most US states. It is more analogous to a Stamp Duty (STLD) tax in the UK on buying a house. You only pay sales tax at the time of purchase. There are wrinkles having to do with different state tax rates and state of residence but I can't think of a situation where you would ever pay a sales tax twice on the same boat. And in most states, once you have owned a boat for 6 months without bringing it into the state you are assumed to not owe sales tax.

Annual property and excise taxes are paid each year so don't really apply to the question

[Allied39]

[QUOTE=dfelsent;3283954]A vessel that is imported into the us and the exported and imported again needs to pay duty again. This is 1.5% of the sales price. Or 0. Or more. Depending on the country you are importing from. And where the vessel was built.


So:
Import duty. Maybe.
Sales tax. Maybe.
Property tax. maybe
End Quote

Missed the point I am thinking.

Ok, I am pretty sure he means if an american sails his boat around the world .....or wherever......cruising,,,,whatever....BUT NOT EXPORTING HIS BOAT...........does he have to pay import tax upon his return?

I am pretty damn sure the answer to the OP's actual question is no.

I have a feeling he is a little .....lets say perturbed , about the possibility of having to do this.....if thats the actual situation.

Which to be honest would not surprise me....lots of folks think free stuff is free.......and the wise know ABSOLUTELY NOTHING is free.

So places that give free stuff...........?

[skipmac]

Originally Posted by CarlF

I believe that a US CG documented or US state registered boat is not exported unless it is reflagged to another country. It can leave the US indefinitely without owing an import duty when it returns.

A state sales tax is paid by the purchaser on buying a boat in the US. You only pay sales tax at the time of purchase. There are wrinkles having to do with different state tax rates and state of residence but I can't think of a situation where you would ever pay a sales tax twice on one purchase.

Annual property and excise taxes are paid each year so don't really apply to the question

If you import a boat into the US you generally owe 1.5% to the federal government and a sales tax to a state. As part of this you either CG document it or register it in a state.

The US has no national sales or VAT tax.

Exactly.

If a boat is US made then of course no import duty, ever. If a foreign made boat is imported and duty paid then it will not pay import duty again just because it leaves the US cruising and returns, even if it leaves the US for many years. If the boat is legally sold and exported to another country then it might be liable to import duties again if reimported to the US but on this I am not certain.

So if you want to add import duty which is not technically a tax then there are ONLY three kinds of taxes.

1.Sales and use tax (similar to VAT in Europe but much lower rate). Charged on the sales price of a boat. All states charge the tax on new boats, most on used boats as well.

2. Ad valorem tax. An annual tax on property or goods you own. Only some states have an ad valorem tax on boats.

3. Import duties if you buy a foreign made boat overseas and import it into the US. A US made vessel will never be liable for import duty even if it was sold overseas and never previously owned by a US citizen.

[CdS2 Roland]

Hello,
My SV is registred in France. This looks to be the same in other European countries (for sure Germany). French rules about VAT is that if you leave French waters for more than 2 years you will have to repay the VAT on residual value wenn you come back. That means value decided by french customs...
BUT to avoid this you can announce you are leaving in advance, you will get a permisson, wich you can extend by customs. For this you have to be in French waters. Almost easy for french flag with french territories all around the world.

Perhaps this could be also possible with UK flag...

Good luck

[sailingforfun]

I sold my BVI flagged boat in Florida.

1) I paid a 1.5% import tax to be able to sell it in the US.
2) I had to surrender control of the boat to the broker while listed. Not a big deal, it just means you can’t be taking it out for a sail while it is listed for sale.
3) By surrendering control of the boat to the broker in Florida, you avoid paying Florida state tax of 6%, up to a maximum of $18,000, on the sales price.

[wizoc]

SKIPMAC- All states do not charge sales tax. I can tell you for certain R.I. does not. There may be others but that is one exception.

[skipmac]

Originally Posted by wizoc

SKIPMAC- All states do not charge sales tax. I can tell you for certain R.I. does not. There may be others but that is one exception.

Read my previous post where I said all states do not charge sales tax on used boats. I am not 100% certain but as far as I know all states charge sales tax on new boats including RI but RI I can confirm does not on used boats.

By the way, my (used) boat is documented and registered in RI where I paid no sales tax.

[FabioC]

In Washington State, you pay the sales tax only once. When you come back to the state, as long as you have kept the receipt for the sales tax that you paid in the past (they do not seem to keep a record of it, it is your burden to produce the receipt), you are fine.
Here, we pay a hefty excise tax when registering the boat every year, based on the current value of the boat and a few other factors. If you miss a year because the boat is out of the country, my understanding is that when you come back you do not need to pay the excise tax for the years you missed (at least that is the way it works with cars).