Selling a US Boat in the US/non US Citizen

[goeasy123]

This kind of question has been asked before, but I can’t find an answer for this specific issue.

Can someone point me at the relevant US law, a website or general information that relates to a non-US citizen selling a US boat to a US citizen? or even the terminology used in this case. It is something to do with relief from import duty on US built and duty paid vessels

Background: This is how I understand it. When a non-US citizen buys a used US boat in the US it loses its USCG documentation status and is assumed to have the flag of the owner. Say, after a year going around the Great American Loop the foreign owner wants to sell it to a US citizen it seems it has to be imported, but with relief from import duty and/or using some special process, maybe involving a broker. I’m trying to find out where this is stated. Or is there another mechanism altogether?

[Tin Tin]

Just an idea, I would explore getting the boat de-registered from USCG in the USA and then re-register as a State registration in Delaware or other tax free state. I don't think the State cares where you are from. You can then sell it like any other boat to a US citizen, they can then get it documented with if they want to go overseas in it. If you are doing the great loop you are unlikely to be in any state longer than the 3 month exepmtion period for "use" tax. If you want to cross into Canada in the Great Lakes - that may or may not be an issue, they might be relaxed about state registered boats - I don't know on that score. Insurance may be an issue to obtain.

[psk125]

What TinTin says makes sense. Also, does the nationality of the buyer make any difference when you sell the boat? When someone buys a boat it's up to them to register it - not you.

[Shrew]

Originally Posted by goeasy123

This is how I understand it. When a non-US citizen buys a used US boat in the US it loses its USCG documentation status and is assumed to have the flag of the owner.

This is absolutely incorrect. The Boat loses the US flagging, but doesn't acquire flagging in a new country unless the boat is proactively flagged in that country.

You don't need a documented vessel to continue sailing it in the US. You will need to have the vessel flagged SOMEWHERE if you choose to sail out of the US and check into a foreign country.

Buying a US owned vessel by a non-US citizen doesn't export the vessel. There would be no reason to import the vessel under the circumstances you outlined.

[skipmac]

Originally Posted by Shrew

This is absolutely incorrect. The Boat loses the US flagging, but doesn't acquire flagging in a new country unless the boat is proactively flagged in that country.

You don't need a documented vessel to continue sailing it in the US. You will need to have the vessel flagged SOMEWHERE if you choose to sail out of the US and check into a foreign country.

Buying a US owned vessel by a non-US citizen doesn't export the vessel. There would be no reason to import the vessel under the circumstances you outlined.

I do believe this is correct. When I was a yacht broker some years ago I sold a US boat owned by a non citizen in the US to a US citizen. Boat is not considered exported nor require any reimportation. Just follow normal procedures for registration or documentation.

[Montanan]

A US manufactured boat sold in the USA is not an imported vessel thus there would not be any customs duty imposed.

But a vessel sold in the USA maybe subject to Sales / Use taxation depending on which State the vessel is sold and which State that may become the State of Principal Use.

50 States / 50 sets of taxation rules, regulations, registration, etc. including Sales / Use taxes, excise taxes, property taxation on the vessel, etc.

There is no Federal VAT or Sales / Use taxation.

Review the laws of the State in which the sale transaction will occur and which waters the vessel will be stored / operated in. Highly State specific.

[Johan Leopard51]

The Q gets complicated with regards what the status of the boat being sold is.

If you for example imported a vessel to X country as a commercial / charter vessel, you would in some instances I can think of, been exempt from Value Added Tax and import duties (vessel dor charter). If you imported it normal way for recreational purpose you would have paid VAT and duties.

If you later sell, you first have to go through X’s export rules (no VAT on export and import duty depends on your buyer) and tax consequences and then deal with the import rules of your buyer country.

[Johan Leopard51]

Originally Posted by Montanan

A US manufactured boat sold in the USA is not an imported vessel thus there would not be any customs duty imposed.

But a vessel sold in the USA maybe subject to Sales / Use taxation depending on which State the vessel is sold and which State that may become the State of Principal Use.

50 States / 50 sets of taxation rules, regulations, registration, etc. including Sales / Use taxes, excise taxes, property taxation on the vessel, etc.

There is no Federal VAT or Sales / Use taxation.

Review the laws of the State in which the sale transaction will occur and which waters the vessel will be stored / operated in. Highly State specific.

That story gets very complicated, fast. Our vessel (physically made in South Africa), has sale agreement recorded as a sale by a US entity. I suspect the actual factory “sells” the vessel to a tax-friendly entity that sold t you.

Our vessel was never anywhere within 10k nm of the entity that sold her to us.