Join Date: Sep 2003
Location: Auckland New Zealand
Thanked 34 Times in 31 Posts
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I've been avoiding this thread because I'm neither Canadian or American so I sort of left this up to the folks that live there. However, I have bought a boat in California as a foreigner and the process that I used hasn't been mentioned sofar so I will.
When I bought the boat, there was a condition called an Out of State delivery. Here is the paragraph in my offer to purchase:
B. Delivery of the Vessel By Seller to Buyer Outside of the State of California is Mandatory. Buyer’s obligation to purchase the Vessel from Seller is conditioned upon Seller’s delivery of the Vessel to the Buyer outside of the State of California including its territorial waters, but not more than twelve (12) miles beyond California Territorial Waters, hereinafter referred to as the "Out-of-State Delivery Point." Territorial Waters of California include the waters within three (3) miles of the coastline of California; the waters within three (3) miles of the coast of all islands which are a part of California; and the waters within at least three (3) miles to seaward of a line drawn between the headlands of all bays and harbors along and adjacent to the coast, with the exception of the four areas commonly known as Crescent City Bay, San Luis Obispo Bay, Santa Monica Bay and San Pedro Bay. With respect to these four areas, the Territorial Waters of California extend only three (3) miles to seaward from the low-water mark on the mainland shore. The exact location of the Out-of-State Delivery Point shall be established by the mutual consent of both the Buyer and the Seller.
When the deal was done and the transfer of ownership was to be effected, the seller, the broker and I took the vessel to a point 4 miles off of San Diego and the broker took a host of pictures of the process of the documents being signed with the chart plotter on in the background to prove the location of the boat at time of signature.
In this way, the vessel was deemed to have been sold outside of California and no taxes were payable at all. Nix. And this is not a scam or some sort of under-the-counter process, it is an accepted way of trading boats to foreigners in California.
The vessel was then immediately returned to San Diego as a foreign vessel flying a US courtesy pennant from the spreaders and I went to the Customs and signed in as if I was freshly arriving in the US. Remember this is customs, not immigration so no passport issues.
The next day a customs agent had the vessel deregistered off the US register. There was no new registration required by the US authorities and they never even asked where the boat was destined to be registered. On the voyage home I flew a NZ flag but there was no official registration done that "authorised" me to do that.
I was leaving the US within 2 weeks of this deal being done so I don't know what the longer term issues are surrounding staying in the US but I reckon it would be governed only by my visa conditions. When I left I cleared Customs and Immigration in the same way any other foreign boat would.
And here is the next thing that I need to share and maybe I've just been lucky but if that is true, my luck has been running good for a heck of a long time: I have never been asked by ANY country (and I've sailed to several over the last 15 years) where my boats were registered. The only thing anyone was interested in as far as the vessel itself was concerned was departure docs from the last port and proof of ownership. Nothing else. Ever.
Now I don't want to prescribe to anyone what they should or shouldn't be doing and I won't be entering any debate as to whether any of the above is a good or a bad thing, just to say that this is what we did and it was fine. How it effects returning the boat to Canada I have no idea. Suffice it to say if I had sailed the boat around the Pacific for 24 months, I would have been entitled to return to NZ without any taxes payable.
My boat is now in New Zealand and although I paid the required taxes to keep it here, it is not registered anywhere officially as a NZ vessel. Wherever I ask about official registration, the reply is "Why would you want to?"
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