US Citizen buying a US flagged boat abroad?

[LLCoolDave]

Hi all, I'm looking at a boat that's on the hard in Trinidad. The boat is US flagged through a Delaware corporation since the owner is Brazilian. I'm wondering what, if any paperwork, I'd need to do in Trinidad. Wondering if I can just show proof of ownership and check out of the country.

I plan on having crew aboard to help sail it north this season. I don't know where I'll keep it when I get to the US. I'm wondering if I should just set up a Delaware corp. to limit my liability if any crew gets injured. There also is no sales tax for Delaware but I may owe sales tax in the state I end up keeping it. I may just be deferring the tax for a time.

Anyway, all advice is appreciated.
Thanks,

Dave

[boatpoker]

Originally Posted by LLCoolDave

Hi all, I'm looking at a boat that's on the hard in Trinidad. The boat is US flagged through a Delaware corporation since the owner is Brazilian. I'm wondering what, if any paperwork, I'd need to do in Trinidad. Wondering if I can just show proof of ownership and check out of the country.

I plan on having crew aboard to help sail it north this season. I don't know where I'll keep it when I get to the US. I'm wondering if I should just set up a Delaware corp. to limit my liability if any crew gets injured. There also is no sales tax for Delaware but I may owe sales tax in the state I end up keeping it. I may just be deferring the tax for a time.

Anyway, all advice is appreciated.
Thanks,

Dave

Buy the corporation (and it's assets) that owns the boat, then you are good to go.

[SailsWithFists]

In my opinion, the easiest thing to do is to purchase the Delaware Corporation that owns the boat. (This assumes that the Corporation does not own any other assets other than the boat.) This way, you do not need to register your own Corp, then transfer the boat from one to the other. You simply assume the asset (the boat) owned by the Corp (the boat never changes ownership, only the corporation does.)

If that does not work, it is always a good idea to register the boat under an LLC. Delaware is not the only choice.

Generally speaking, state sales tax would only occur when a sale and possession occurs in the actual state. You are buying a boat in a foreign country and taking possession in a foreign country, outside of the jurisdiction of a US state.

Various states can, will, and do force owners to pay the state registration fees when boats are within their waters beyond certain periods of time, but not sales tax.

As far as what Trinidad requires if you purchase the boat (or the Corp that owns the boat), I have no idea.

[belizesailor]

If you want to Federally Document the boat, then it should be very easy to transfer ownership just using standard USCG forms. Ive done this with State Registered boats in international venues before and it was very easy.

Cant help you in Trini law though.

[billknny]

Originally Posted by SailsWithFists

Generally speaking, state sales tax would only occur when a sale and possession occurs in the actual state. You are buying a boat in a foreign country and taking possession in a foreign country, outside of the jurisdiction of a US state.

"Generally speaking" about tax and legal matters can get you in a whole lot of trouble.

Florida, for example, WILL collect "use tax" from you if you keep the boat in Florida long enough to register it there (90 days) no matter where or when you bought the boat discounting only the amount you might have had to pay to other US jurisdictions.

[belizesailor]

Originally Posted by billknny

"Generally speaking" about tax and legal matters can get you in a whole lot of trouble.

Florida, for example, WILL collect "use tax" from you if you keep the boat in Florida long enough to register it there (90 days) no matter where or when you bought the boat discounting only the amount you might have had to pay to other US jurisdictions.

Several States will go after you for sales tax too, if in their waters too long and/or you cant prove you paid it somewhere else. Ive run into that issue in both FL and TX.

[SailsWithFists]

Originally Posted by billknny

"Generally speaking" about tax and legal matters can get you in a whole lot of trouble.

Florida, for example, WILL collect "use tax" from you if you keep the boat in Florida long enough to register it there (90 days) no matter where or when you bought the boat discounting only the amount you might have had to pay to other US jurisdictions.

Well, I was only addressing SALES TAX, which is what the OP was referring to specifically. No state can collect SALES TAX unless very specific criteria are met according to federal laws which govern interstate commerce, but that will not prevent them from trying.

I have had four different boats in Florida, registered in other states, and only paid the Florida registration fees after 90 days stay, but NEVER have I paid SALES TAX, on a boat I purchased outside of the state. I was speaking "generally" because states do impose other forms of taxation, that are not SALES TAX, which vary from state to state, i.e.: some jurisdictions in Virginia will hit you with what can be very steep Personal Property Tax if you overstay.

I speak about various legal matters in which I am familiar, of which there are many. However, because of nuances in every jurisdiction, all the way down to city level, I speak "generally." I am not offering legal advice, simply general guidance based on experience.

[LLCoolDave]

Thanks for the comments so far. I'll do some research as to what it would take to purchase the corporation and look into USCG documentation.

[DotDun]

Originally Posted by billknny

"Generally speaking" about tax and legal matters can get you in a whole lot of trouble.

Florida, for example, WILL collect "use tax" from you if you keep the boat in Florida long enough to register it there (90 days) no matter where or when you bought the boat discounting only the amount you might have had to pay to other US jurisdictions.

Only if:

you register the boat in Florida within 6 months of purchase

or

you are a Florida resident at the time of purchase

[ranger58sb]

Originally Posted by boatpoker

Buy the corporation (and it's assets) that owns the boat, then you are good to go.

Just FWIW, I've read buying an existing corporation can also mean you become liable for all their debt.

Might not be a big deal, especially if there's no other debt involved... just mentioning that it'd be good to fully understand the corporations total liabilities before you jump in.

I believe there are also ways to buy a corporation but NOT their other debts, if any; that would probably be accomplished via contract wording.

-Chris

[boatman61]

If the boat is an American built and originally owned and operated in the USA before the Brazilian bought it and took out a registration of 'convinience' to get around his national restrictions just register it as you would if you bought it in say Florida..
When I bought my Hunter 37c in NC and went through the customs etc process I was told "The boat is an American citizen" it could leave, return, stay in NC under a UK flag forever with no penalties..
I however.. would only ever get 90 days at a time..
So if its a US boat by birth.. treat as normal.

PS; The Customs officer was a very nice lady who was also an enthusiastic sailor based out of Beaufort/Morehead City so I figure she knew her onions.

[Caribbeachbum]

Originally Posted by SailsWithFists

Well, I was only addressing SALES TAX, which is what the OP was referring to specifically. No state can collect SALES TAX unless very specific criteria are met according to federal laws which govern interstate commerce, but that will not prevent them from trying...

The use tax is essentially the same thing as sales tax. The sovereign expects a taste no matter where you spend the money. If I buy a boat in Tennessee, I will pay sales tax. If I buy it in Florida and take it to Tennessee, I will pay use tax. Most states that have a use tax (most do) will discount it by the sales tax, if any, that you paid on the purchase elsewhere.

I don't know if Florida has a use tax, but they certainly had a sales tax when we bought our last boat there. (We didn't pay any, but we had to file "we're leaving the state with out boat" paperwork to avoid it.)

[ranger58sb]

Originally Posted by Caribbeachbum

The use tax is essentially the same thing as sales tax.

I don't know if Florida has a use tax, but they certainly had a sales tax when we bought our last boat there. (We didn't pay any, but we had to file "we're leaving the state with out boat" paperwork to avoid it.)

Well, not exactly.

A sales tax is on purchase. A use tax is on ownership.

A sales tax is a one-time occurrence (at least here in the U.S., and for simplicity, ignoring the VAT concept in some countries). A use tax can (and usually does) re-occur, often yearly.

When we lived there, Florida had both a sales tax (upon purchase) and a periodic "registration" fee for our non-documented small boats. Can't remember whether we had to periodically renew that kind of "registration" for the documented big boat or not...

-Chris

[Caribbeachbum]

Originally Posted by ranger42c

Well, not exactly.

A sales tax is on purchase. A use tax is on ownership.

A sales tax is a one-time occurrence (at least here in the U.S., and for simplicity, ignoring the VAT concept in some countries). A use tax can (and usually does) re-occur, often yearly.

When we lived there, Florida had both a sales tax (upon purchase) and a periodic "registration" fee for our non-documented small boats. Can't remember whether we had to periodically renew that kind of "registration" for the documented big boat or not...

-Chris

Perhaps your state uses different words and definitions than the ones I've done business in. The recurring tax you describe is, in my experience, referred to as a personal property tax (but not the same as a property tax, which is shorthand for real property tax, ie real estate).

For what it's worth (not much, I guess), Wikipedia appears to agree with me.

[aucoingc]

Why not confect the sale in Int'l waters documented with signing photos and photos of your lat/long? Should be no sales tax on sale finalized out of the jurisdiction of Trinidad--or any other Soverign.