Urgent: buying Canadian boat now in USA

[Tetepare]

Having been long boat shopping, ironically yesterday a boat we love was docked next to us yesterday.

US made boat, transiting through USA bound for Canada on a cruising permit. Owner planned to depart for Canada tomorrow

Having previously read, and now reread the threads, and the COVID problems with US/ Canadian cross border owner, I need to confirm my belief on the only reasonable way to do a sale.

I think the boat can be imported to USA while in USA; no duty since it’s US made. The Canadian owner would have to import it?

After import the sale. After which I can register the boat and owner returns to Canada by land.

Other thoughts? How long might this take with COVID?

THANKS so much!

[JKMilligan]

I would talk to someone like ASAP Marine Documentation down in Miami. I used them to wade through this and did exactly what you’re doing - bought a Canadian registered, US-built boat in NC as it was passing through. If the boat was ever documented here it will be even easier.

[robert sailor]

Should be easy, deregister in Canada and register in USA plus whatever taxes are due in USA.

[Tetepare]

Canadian seller has Pleasure Boat License, Registration, Bill of Sale. He showed them to me. Are these sufficient to import to USA and register?

No title or manufacturers certificate of origin. Do boats sold in Canada not have a title or did this one get lost along the way?

[Stu Jackson]

https://www.cbsa-asfc.gc.ca/import/imp-mar-eng.html


Read the links under Important Information which describe Canadian differences about licensing (provincial) and registration(national) which are different than the US.

[Montanan]

Originally Posted by Tetepare

Having been long boat shopping, ironically yesterday a boat we love was docked next to us yesterday.

US made boat, transiting through USA bound for Canada on a cruising permit. Owner planned to depart for Canada tomorrow

Having previously read, and now reread the threads, and the COVID problems with US/ Canadian cross border owner, I need to confirm my belief on the only reasonable way to do a sale.

I think the boat can be imported to USA while in USA; no duty since it’s US made. The Canadian owner would have to import it?

After import the sale. After which I can register the boat and owner returns to Canada by land.

Other thoughts? How long might this take with COVID?

THANKS so much!

There should not be any import duty / tariff for a US made boat reentering the USA. There may be import duty on the vessels accoutrements & dinghy if they are not US made and were not a part of the original purchase from the US manufacturer. The Canadian owner is liable for all import duty / tariffs on all the goods that have been offered for sale and the tariff was due the instant that the Canadian owner offered to sell the vessel to you. Be sure that the Canadian owner declares the vessel as being imported and its accoutrements immediately by contact Customs for declaration and settling with them. I believe Canadian owner's USA issued cruising license is void the moment the offer to sale was enacted and should be returned to the US CBP.

You will need to determine if there are any lien holders on the Canadian registered vessel which liens will need to be fulfilled and released so as to attain clean title transfer. You need to check with the Canadian agency that issued title to the vessel to determine the lien status before closing the sale. Do not rely on the Canadian owner to investigate the lien status, it is your exposure, so you need to perform such.

There may be a sales or a use tax imposed by the State in which the private sale transaction occurs, and / or where the boat is transported to be used. One will need to review the specific rules for the State jurisdiction(s) that apply to your actions.

State titling and registration, and / or in the alternative USCG documentation [and State registration is applicable] will apply after purchase has occurred and into which State waters the boat resides. Again specific State rules apply so investigate the relevant jurisdiction.

[robert sailor]

In Canada sailboats can be registered in a Province or in the Federal registry. Much nicer if it Federally registered.

[Emouchet]

A boat under a cruising license cannot be sold while in the US to a US citizen.
It is written clearly in the cruising license document.

[Montanan]

Originally Posted by Emouchet

A boat under a cruising license cannot be sold while in the US to a US citizen.
It is written clearly in the cruising license document.

Correct: The boat is deemed to have been imported the moment it is first offered for sale to a resident of the USA. The cruising license thence becomes void and needs to be promptly returned and a customs declaration must be made. There is no duty on a USA made boat, but the appurtenances [of which there is customarily a long and detailed list associated with a boat sale] may be subject to duty.

And the boat must then comply to the CBP rules of navigation in the USA without the cruising license.

[JKMilligan]

Originally Posted by Montanan

Correct: The boat is deemed to have been imported the moment it is first offered for sale to a resident of the USA. The cruising license becomes thence void and needs to be returned and a customs declaration must be made. There is no duty on a USA made boat, but the appurtenances [of which there is customarily a long and detailed list associated with a boat sale] may be subject to duty.



And the boat must then comply to the CBP rules of navigation in the USA without the cruising license.

Nevertheless, it can certainly be done. Maybe wording has changed in the last few years but I remember it all hinging on something like “...entering the US with the intent of selling...”, which left a lot of wiggle room. In my case it was true - the boat was never listed for sale. There were no issues in completing the sale, documenting the boat, etc.

[Macblaze]

Originally Posted by Tetepare

I think the boat can be imported to USA while in USA; no duty since it’s US made. The Canadian owner would have to import it?

Are you absolutely sure about this? I know its true under the old free trade agreement but I haven't seen if it was included in the new. Just something to double check.

Edit: Oh never mind, I see it's going back to the US. Still something for me to lookup...

[JPA Cate]

The seller would probably have to do quarantine in Canada, having arrived from the USA. If so, it will certainly add to his/her costs.

Ann

[Montanan]

Originally Posted by Macblaze

Are you absolutely sure about this? I know its true under the old free trade agreement but I haven't seen if it was included in the new. Just something to double check.

Edit: Oh never mind, I see it's going back to the US. Still something for me to lookup...

Canada had implemented a retaliatory tariff of 10% against boats made in the USA due to The Donald having imposed very steep Section 232 tariffs on aluminum and steel imports from Canada. 90% of boats sold in Canada are made in the USA. That retaliatory tariff has since been discontinued by Canada, all it was doing was taxing Canadian consumers.

Donald's tariffs are authorized under Section 232 of the Trade Expansion Act of 1962 on the grounds of national security. The presidential orders impose a 25% tariff on imported steel and 10% on imported aluminum, which came into effect on March 23, 2018.

The USA does not have tariffs for Canadian made vessels. The USMCA agreement is almost identical to NAFTA, just a few changes as to quantity of North American made automotive component content requirements and wages that need to be paid for auto assembly [increases wages to Mexican workers so as to reduce the differential between USA and Canadian automotive workers] and some modest adjustments on dairy products and lumber, otherwise essentially the same trade relationships. Reality: Largely much ado about nothing.

[Tetepare]

Thanks to those who contributed meaningful insight.


Long and short of it, our dream boat departed for Canada this morning. It is likely gone for good. We understood each other concerning price, all we needed was the bureacratic paperwork, which was the killer.


We had given up boat hunting until this one happened to be moored alongside us, on the last leg to Canada from an two-year overseas cruise. It is a fairly common boat, but what was uncommon was the upkeep and upgrades just the way I would have done it.


What killed the deal, besides bureaucracy, was our over-simplification of the BS, brokers both busy and greedy, the seller's mistrust of brokers, the US holiday weekend when nothing happens, and COVID.


Prior to COVID it would be simple- boat goes to CA, we buy boat, bring boat back and clear customs. But we cannot go to Canada to get the boat. And these stories of "meet in the middle of the sea" are just that- stories.


So much time was spent chasing, trying to find a way to sell/ buy while the damned boat was right next to us. Lots of time was spent chasing import regulations, etc; upon trying to employ a boat broker to handle the bureaucracy things flip-flopped, costs grew, and (like this thread) anecdotal and only tangentially relevant info abounded, wasting time and distracting.



The boat broker who "wanted" to help first cited a 10% fee- despite not having to show the boat, etc. Long story, but broker later suggested a Buyer's Broker relationship at 5% then later flipped back to Sellers Broker at 10%. Another broker- that's done this before- was compassionate, but had no time. I'd also reached out to an import broker (non-boat) and thanked them, but said we'd go with the promising "experienced" boat broker- likely a mistake, in hindsight.



What I now know is that the Canadian can import the boat, or I could. But it has to be bonded, waiting for Customs inspection. This happens "when Customs feels like it" and after the import broker does the paperwork "when they feel like it." Again, I should have just worked with the non-boat import broker I know, since they'd be responsive and would have bent over to help me.


We were in a rush because the owner was hours from Canada and, understandably, wanted to go home. And he was burning the last weeks of his visa. As it was, he waited almost a week, for which we are grateful. Sadly, six of the seven days were burned up waiting through the "extended" holiday.



The boat broker rep, being local to the marina, was fully aware of what we wanted to do. But it seemed that despite stories that the brokerage had "done this before" it wasn't an identical situation, it was all pre-COVID stories. Time was wasted with stories of how the brokerage is so much bigger than others, has multitudes of certifications, etc. Time was wasted chasing claims that the surveyor must be NAMS or SAMS certified by the lender (not true) and insurance company (also not true.) And of course, the flip-flop from buyer's to sellers broker, and delays in responses (though, given the workload, they're going to focus on the big money, I understand that. I'm sure from their perspective they jumped through hoops to find a solution.)



Ultimately though the owner could have turned the boat over to the broker, but he wasn't going to pay 10% when they're doing 25% of the normal workload, and had lost faith in them.


So what we thought would be simple turned out to be, in sad reality, anything but. Big government and those paid to navigate the morass win again.

[pcmm]

That's really unfortunate. Maybe try to stay in touch with the owner and when this all subsides, take another crack at it. As a Canadian it appers to be much (or was) simpler to purchase a bot in the U.S. and import it into Canada. really the only time consuming part was deregistering it in the U.S. before getting it documented in Canada (which you can do before entering into Canada) When I did it in 2016, all I did was declare that I was importing the boat to customs when I crossed the boarder and then give them my CC for them to charge the sales tax on. might have added 10 minutes to clearing in...
You still need your purchase agreement and documentation but its straight forward when going to Canada