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post #1 of 24 Old 11-09-2011 Thread Starter
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Boat Registration USA

Hello, We are a few yrs away from buying a cruising sail boat. However we have a question that came up when calling and checking on what boat insurance might cost. They asked us what state we plan to have the registration in.

We have read a few places where ppl suggest Delaware? But our plans will take us all over the US east and gulf coast before heading south through the Islands and maybe beyond that. We don't really plan to call any state home for more than a few weeks at a time.

What are most cruisers doing? Are any states better than others to call home (for boat reg)?

Other questions along these lines have to do with taxes both sales and property. Are some states cheaper than others?

What happens if we buy a boat in one state and reg it in another. Will we get hit twice for sales tax? Indiana tries to do that.
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post #2 of 24 Old 11-09-2011
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To be honest I don't know the first thing about US boat registration, but I can tell you that in Canada you register your boat as a Canadian vessel with Transport Canada and then lisence it in your home province.
The marina in Sidney B.C. where I keep my boat in is full of American boats. When you talk to the owners most will lie to you and say, "We keep our boat here because it is just so beautiful up here". Yah sure.
Some are more honest and will explain to you that the US tax laws are why they are here.
I have not counted them but I will guess that there are more American boats in our marina than there are Canadian ones. They are from everywhere, California, Delaware, Nevada, Florida, Washington, Oregon you name it.
I don't know what's going on down there as far as your tax laws go but it's quite apparent that it is very expensive. Why would you leave a Swan 61 sitting up here, rotting away, unused, when it's registered in Pensacola FL.
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post #3 of 24 Old 11-09-2011
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Here's an article that might help, with taxes: ( I'm not sure how current it is)

How to Avoid Boat Tax - Legally

And Boat U.S. : http://www.boatus.com/gov/state_boat.asp

United States Sales Tax Site: Table of Sales Tax Rates

I purchased my boat in Maryland and registered it in NJ, I only paid sales tax to NJ.
Even though my boat is federally documented, I still need to pay annual registration fees to NJ. ( so, you may want to research, which states do not require documented vessels to be annually registered).

With regards to insurance, you'll need to talk to several companies to see their coverage area. Boat US covers me on the east coast from Canada to Jacksonville Fla. If I want to head further south, I need to get a rider policy. Last time I checked it was an additional $1,000. Some policies may stipulate that you need to be above a certain latitude by a particular date.

Some states will charge you a use tax if you spend more than a specified time in their waters.

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post #4 of 24 Old 11-09-2011
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Sales and use tax varies by state. RI has none, whereas neighboring Massachusetts has a 6.25 sales/use tax. Assuming you are federally documented, you probably will need to register in a state and obviously one with no sales/use tax would be the choice.

However, states you transit will have rules related to periods of residency (usually 90 or 120 days) where their registration requirement kicks in, and they want to apply their use taxes, if you haven't previously paid somewhere. Most states have reciprocity agreements that credit you for previously paid sales/use taxes.

There are numerous threads on SN about sales and use taxes. States are very aggressive about these taxes, and will charge penalties and interest when they decide the tax might have been due and not paid...the boater is presumed guilty unless you can prove conclusively that a tax is not due.

When you buy a boat it's going to be in some state, and you likely wont be moving it for the first 90 days. My opinion is to register it wherever you first keep it, then deal with other states as you transit them. If you end up obligated for a use tax somewhere, just pay it...

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post #5 of 24 Old 11-09-2011
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"and they want to apply their use taxes, if you haven't previously paid somewhere"

actually, some of them will charge you if you stay long enough whether you paid somewhere else or not. It varies by state and depends on where the boat actually is and for how long. You can usually stay under the radar if the boat is on the hard but if it is in the water, especially at a marina, some states will have their tax people patrolling to see that all boats appearing to be resident (for 90 days or whatever) have paid the tax.
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post #6 of 24 Old 11-09-2011
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In some parts of the world eg. Martinique you must have USA federal registration. State registration is not accepted.
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post #7 of 24 Old 11-09-2011
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Quote:
Originally Posted by TQA View Post
In some parts of the world eg. Martinique you must have USA federal registration. State registration is not accepted.
FWIW the term is Federal documentation...

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post #8 of 24 Old 11-09-2011
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You will still need a dirt address for things like; Federal and State taxes, passport, driving license, insurance, voting,....

Perhaps a relative or mail forwarding service. This address may, if tax and registration fees are reasonable, also be the home state for the boat even if the boat is never there.

USCG documentation if you plan to visit other countries, otherwise state registration is all you need.

Keep originals of all fees and taxes paid, registration and title, and original purchase information with you to show to other state tax authorities. Have a friend or relative keep a hard copy and .pdf of all documents to forward if needed.

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post #9 of 24 Old 11-09-2011
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No one has even mentioned that the Federal law on registration (state registration, not USCG Documentation) says the boat must be registered in the state of principle use. Typically this means either where you are a resident, or if you keep your boat in another state, the state where the boat is kept. Most States have rules about how long you can keep the boat in their state without having to give them a pound of flesh. So first you have to determine what is the state of principle use. the look up their rules. See National Assoc Of State Boating Law Administrators, - National Association of State Boating Law Administrators

If you document the boat, you will still have to pay the state whatever taxes they may have for boats. This may include sales tax and personal property tax, and fees.

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post #10 of 24 Old 11-09-2011
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No one has even mentioned that the Federal law on registration (state registration, not USCG Documentation) says the boat must be registered in the state of principle use. Typically this means either where you are a resident, or if you keep your boat in another state, the state where the boat is kept. Most States have rules about how long you can keep the boat in their state without having to give them a pound of flesh. So first you have to determine what is the state of principle use. the look up their rules. See National Assoc Of State Boating Law Administrators, - National Association of State Boating Law Administrators

If you document the boat, you will still have to pay the state whatever taxes they may have for boats. This may include sales tax and personal property tax, and fees.

Ike
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