Personal property tax on foreign-flag boat stored in US East Coats

[svlamorocha]

Hello everybody.

Does anybody know if the counties in Virginia and North Carolina that charge Personal Property Tax on boats (example;: Mathews, VA) will actually charge it on a foreign-flag boat that stays in the US under a valid Cruising License andis therefore not registered with the state?

[Cheyne]

Lancaster County, north side of the Rappahanock River, isn't a boat tax county. Folks in Urbanna move over their in December to avoid Middlesex County PPT then come back in the Spring.

[boatpoker]

Originally Posted by svlamorocha

Hello everybody.

Does anybody know if the counties in Virginia and North Carolina that charge Personal Property Tax on boats (example;: Mathews, VA) will actually charge it on a foreign-flag boat that stays in the US under a valid Cruising License andis therefore not registered with the state?

We've done it in Virginia 2022/2023 ... No we were not taxed.

[VBsail]

I am in Va, Tax is different in each county. Several summers I used a marina in Norfolk and received a bill in the fall. I was able to successfully appeal it by showing a lease that I had a full time slip in Virginia Beach. My understanding is tax is on the boat for where it is parked, not the owner or registration. I live in Mathews. They don't prorate and base it on if your boat is there Jan 1 you pay for whole year. I believe Mathews county marinas have to submit a list only once each year during January. If you are looking at a specific marina I would call them and ask about the county personal property tax.

[boatpoker]

Originally Posted by VBsail

I am in Va, Tax is different in each county. Several summers I used a marina in Norfolk and received a bill in the fall. I was able to successfully appeal it by showing a lease that I had a full time slip in Virginia Beach. My understanding is tax is on the boat for where it is parked, not the owner or registration. I live in Mathews. They don't prorate and base it on if your boat is there Jan 1 you pay for whole year. I believe Mathews county marinas have to submit a list only once each year during January. If you are looking at a specific marina I would call them and ask about the county personal property tax.

Tax on a foreign vessel with current Federally issued Cruising License ?
I find that one hard to believe.

[VBsail]

Its a small town so I called the Mathews county Treasurer, Phone: 804-725-2341. They connected me to the county assessor who said foreign owners with foreign registered vessels are required to pay a personal property tax if the vessel is stored in Mathews county on Jan 1 of the year.

[boatpoker]

Originally Posted by VBsail

Its a small town so I called the Mathews county Treasurer, Phone: 804-725-2341. They connected me to the county assessor who said foreign owners with foreign registered vessels are required to pay a personal property tax if the vessel is stored in Mathews county on Jan 1 of the year.

I have twice been in VA on Jan 1st and never received a tax bill/ There are numerous Federal Laws regarding foreign vessels on a Cruising License. Nowhere does it state they be subject to any kind on State tax.

I'd bet they have nothing in their state or municipal laws giving them the right to tax foreign vessels and its just a pompous small town bureaucrat ... I'd tell them to get stuffed. Thats a ball of wax their lawyers would tell them to put away.

The closest I could find on this issue refers to commercial vessel and goes back to 1945

https://digitalcommons.law.uw.edu/cg...50&context=wlr

Under US CFR Title 46, A vessel under a Cruising License is exempt from US boat requirements as long as they are compliant with their Country of Register ... might not be germane but a negative cannot be proven.

[Cheyne]

One of the marina's near us only reports boats that are state registered since the State/County already know about them. I asked why. The dockmaster would have to report himself and that isn't going to happen anytime soon. He has been there since the 1980's.

Cheyne

[svlamorocha]

Originally Posted by VBsail

I am in Va, Tax is different in each county. Several summers I used a marina in Norfolk and received a bill in the fall. I was able to successfully appeal it by showing a lease that I had a full time slip in Virginia Beach. My understanding is tax is on the boat for where it is parked, not the owner or registration. I live in Mathews. They don't prorate and base it on if your boat is there Jan 1 you pay for whole year. I believe Mathews county marinas have to submit a list only once each year during January. If you are looking at a specific marina I would call them and ask about the county personal property tax.

Many thanks. If you live in Mathews I have a question for you:

- Is there anything bad about Zimmerman Marine's Mathews storage yard that I should be aware of? Storage for a 22-ft wide cat at $9 per ft per month seems too cheap!

[svlamorocha]

Thank you for the offer. Can you pleaese find out what does Zimmerman´s Mathews facility do with foreign flag boats stored out of the water on January 1st?

Thanks

[Montanan]

FYI:

The issue is as clear as mud, as is often the case between US federal regulations [e.g., a cruising license] and the 50 State laws.

As to vessels with issued federal cruising licenses, an exemption from State and local property taxes, and of sale and use taxes are not explicitly listed as to privileges and exempt obligations; reference the bold font portion of section (c) below of the US Federal Code of Regulations:

I would recommend discussions with the State of Virginia and / or the County at which one is anticipating mooring or storing the vessel on January 1st of a year. If the vessel is not present on January 1st it will not be subject to property taxation. 50 sovereign States, 50 sets of laws and regulations, quite often completely different as to registration, taxes, etc.

It is not uncommon for State sales or use taxation to apply to foreign vessels, so I do not see why there would be an exemption from property taxes, or excise taxes, etc. There typically is exemption for short term visitation to a State, 60 days, or 6 months, again each State is unique. A property tax is basically similar to an annual use taxation, whereas use taxation is invoked only upon new usage within a State. A property tax is a form of use privilege taxation of which the US federal government is not a factor in determining.


https://www.ecfr.gov/current/title-19/chapter-I/part-4/subject-group-ECFR9bbbb4feecf5410/section-4.94#p-4.94(b)


§ 4.94 Yacht privileges and obligations.
(a) Any documented vessel with a pleasure license endorsement, as well as any undocumented American pleasure vessel, shall be used exclusively for pleasure and shall not transport merchandise nor carry passengers for pay. Such a vessel which is not engaged in any trade nor in any way violating the Customs or navigation laws of the U.S. may proceed from port to port in the U.S. or to foreign ports without clearing and is not subject to entry upon its arrival in a port of the U.S., provided it has not visited a hovering vessel, received merchandise while in the customs waters beyond the territorial sea, or received merchandise while on the high seas. Such a vessel shall immediately report arrival to Customs when arriving in any port or place within the U.S., including the U.S. Virgin Islands, from a foreign port or place.

(b) A cruising license may be issued to a yacht of a foreign country only if it has been made to appear to the satisfaction of the Secretary of the Treasury that yachts of the United States are allowed to arrive at and depart from ports in such foreign country and to cruise in the waters of such ports without entering or clearing at the customhouse thereof and without the payment of any charges for entering or clearing, dues, duty per ton, tonnage taxes, or charges for cruising licenses. It has been made to appear to the satisfaction of the Secretary of the Treasury that yachts of the United States are granted such privileges in the following countries:

Argentina

Australia

Austria

Bahama Islands

Belgium

Bermuda

Canada

Denmark

Finland

France

Germany, Federal Republic of

Greece

Honduras

Ireland

Italy

Jamaica

Liberia

Marshall Islands

Netherlands

New Zealand

Norway

Saint Kitts and Nevis

Saint Vincent and the Grenadines

Sweden

Switzerland

Turkey

United Kingdom and the Dependencies: the Anguilla Islands, the Isle of Man, the British Virgin Islands, the Cayman Islands, and the Turks and Caicos Islands

(c) In order to obtain a cruising license for a yacht of any country listed in paragraph (b) of this section, there shall be filed with the port director an application therefor executed by either the yacht owner or the master which shall set forth the owner's name and address and identify the vessel by flag, rig, name, and such other matters as are usually descriptive of a vessel. The application shall also include a description of the waters in which the yacht will cruise, and a statement of the probable time it will remain in such waters. Upon approval of the application, the port director will issue a cruising license in the form prescribed by paragraph (d) of this section permitting the yacht, for a stated period not to exceed one year, to arrive and depart from the United States and to cruise in specified waters of the United States without entering and clearing, without filing manifests and obtaining or delivering permits to proceed, and without the payment of entrance and clearance fees, or fees for receiving manifests and granting permits to proceed, duty on tonnage, tonnage tax, or light money. The license shall be granted subject to the condition that the vessel shall not engage in trade or violate the laws of the United States in any respect. Upon the vessel's arrival at any port or place within the U.S. or the U.S. Virgin Islands, the master shall comply with 19 U.S.C. 1433 by immediately reporting arrival at the nearest Customs facility or other place designated by the port director. Individuals shall remain on board until directed otherwise by the appropriate Customs officer, as provided in 19 U.S.C. 1459.

(d) Cruising licenses shall be in the following form:

License To Cruise in the Waters of the United States
To Port Directors:
For a period of ________ from ________(Date) the ________(Flag) ________ (Rig) yacht ________(Name) belonging to ________________ of (Owner's name) ________________(Address) shall be permitted to arrive at and depart from the United States and to cruise in the waters of the Customs port of

(Name of port or ports)
without entering and clearing, without filing manifests and obtaining or delivering permits to proceed, and without the payment of entry and clearance fees, or fees for receiving manifests and granting permits to proceed, duty on tonnage, tonnage tax, or light money.
This license is granted subject to the condition that the yacht named herein shall not engage in trade or violate the laws of the United States in any respect. Upon arrival at each port or place in the United States, the master shall report the fact of arrival to the Customs officer at the nearest customhouse. Such report shall be immediately made.

Issued this __________ day of ______________, 19____

(Port Director of Customs)
Warning: This vessel is dutiable:

(1) If owned by a resident of the United States (including Puerto Rico), or brought into the United States (including Puerto Rico), for sale or charter to a resident thereof, or

(2) If brought into the United States (including Puerto Rico) by a nonresident free of duty as part of personal effects and sold or chartered within one year from date of entry.

Any offer to sell or charter (for example, a listing with yacht brokers or agents) is considered evidence that the vessel was brought in for sale or charter to a resident or, if made within one year of entry of a vessel brought in free of duty as personal effects, that the vessel no longer is for the personal use of the non-resident.

If the vessel is sold or chartered, or offered for sale or charter, in the circumstances described, without the owner first having filed a consumption entry and having paid duty, the vessel may be subject to seizure or to a monetary claim equal to the value of the vessel. See Chapter 89, Additional U.S. Note 1, HTSUS, and subheadings 8903.10, 8903.91, 8903.92, 8903.99.10, 8903.99.20, and 8903.99.90, HTSUS.

(e) A foreign-flag yacht which is not in possession of a cruising license shall be required to comply with the laws applicable to foreign vessels arriving at, departing from, and proceeding between ports of the United States.

[T.D. 69–266, 34 FR 20423, Dec. 31, 1969]

[Montanan]

Methods of discovering watercraft.

The Virginia Department of Wildlife Resources (DWR) and the US Coast Guard furnishes the Commissioner of the Revenue a list of all watercraft registered in a City or County as of January 1 each year. Taxes are based on ownership as of January 1 of the current calendar year. The watercraft does not have to be in the city on January 1 to be considered taxable for the whole year.

If the watercraft is normally garaged, docked, or parked in the city / county, it has acquired a degree of permanency and is taxable for the whole calendar year.


The amount of property taxation, if any, could be trivial.

By way of example, billed at 1/millionth of the assessed value.

The boat licensing fee is also modest.

[Island Time O25]

Here in MA a boat is taxed by the town where it is on July or August 1st. Which is weird since it may be in the water for only 3 to 5 months. And I have not heard of a town taxing anchored boats. But then again we do not have many of those, mostly docked or moored.

The tax itself is $10 per assessed $1,000 but the assesed value is usually not that high unless you have a boat worth next to nothing then it is still assessed at a few thousands, say $5,000 or thereabouts, for a tax bill of $50.

My first boat was bought for $400.00 but they didn't want to reflect that in their assessment of, if I remember correctly, $5,000 because that was their magic bottom line number for all old boats. Did not formally challenge them as I didn't want to make enemies at the city hall for $50. Since then the lady in charge of those things gave me plenty of slack in other matters. So I figure it was $50 per few years well spent.

[Montanan]

Foreign-flagged boats normally pursue receive a cruising license from U.S. Customs and Border Protection. This federal licensing step exempts the boat from formal custom's clearance and entry procedures and which prevents by explicit state and local exemption most, but not all states from trying to collect use tax and / or a personal property tax when the vessel is in state waters for an extended period of time [e.g., 90 days].

By way of example, Florida explicitly exempts foreign flagged vessels operating under a cruising license from Florida use taxation.

In California, foreign vessels with a license to cruise are subject to property tax.

[CaptJimFrei]

In Chatham County NC, the tax man will go to the marina and dry storage places and get copies of the leases and send a bill to the boat owner. Unless you can prove your boat is parked in another county for 184 days, you will pay the Chatham County tax. I live in Wake County, but pay the Chatham taxes on my boats and trailers because the rate is lower.

NCDMV sends notice of tagged trailers to the counties for property tax purposes.