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Go Back   SailNet Community > Out There > Cruising & Liveaboard Forum > Confused non-resident
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Topic Review (Newest First)
10-02-2008 05:17 PM
lynn1120
It actually depends on the boat manuf

Quote:
Originally Posted by Valiente View Post
^ ^^ ^ ^^
I believe this is correct.

I am in Toronto and I wanted to go check out an NY state-registered boat, but as it was French-built, buying it in the States and "importing" it back to Canada would have totalled 24% of the purchase price, making it no bargain at all irrespective of what I thought of the boat (a Jouet 1280, if anyone's wondering).
The non nafta tax may not even come up or be an issue if the manufacturer produces or produced some boats in NA
10-02-2008 11:54 AM
sab30 Thanks guys...
10-02-2008 06:39 AM
sailingdog Just to clarify, here is the language from AB-1452

Quote:
The people of the State of California do enact as follows:

SECTION 1. Section 6248 of the Revenue and Taxation Code is amended to read:
6248. (a) On and after the effective date of this section, there shall be a rebuttable presumption that any vehicle, vessel, or aircraft bought outside of this state, and which is brought into California within 12 months from the date of its purchase, was acquired for storage, use, or other consumption in this state and is subject to use tax if any of the following occurs:
(1) The vehicle, vessel, or aircraft was purchased by a California resident as defined in Section 516 of the Vehicle Code.

(2) In the case of a vehicle, the vehicle was subject to registration under Chapter 1 (commencing with Section 4000) of Division 3 of the Vehicle Code during the first 12 months of ownership.

(3) In the case of a vessel or aircraft, that vessel or aircraft was subject to property tax in this state during the first 12 months of ownership.

(4) The vehicle, vessel, or aircraft is used or stored in this state more than one-half of the time during the first 12 months of ownership.
(b) This presumption may be controverted by documentary evidence that the vehicle, vessel, or aircraft was purchased for use outside of this state during the first 12 months of ownership. This evidence may include, but is not limited to, evidence of registration of that vehicle, vessel, or aircraft, with the proper authority, outside of this state.

(c) This section shall not apply to any vehicle, vessel, or aircraft used in interstate or foreign commerce pursuant to regulations prescribed by the board.

(d) The amendments made to this section by the act adding this subdivision shall not apply to any vehicle, vessel, or aircraft that is either purchased, or is the subject of a binding purchase contract that is entered into, on or before the operative date of this subdivision.

(e)
(1) Notwithstanding subdivision (a), any aircraft or vessel brought into this state for the purpose of repair, retrofit, or modification shall not be deemed to be acquired for storage, use, or other consumption in this state.

(2) This subdivision shall not apply if, during the period following the time the aircraft or vessel is brought into this state and ending when the repair, retrofit, or modification of the aircraft or vessel is complete, more than 25 hours of airtime in the case of an airplane or 25 hours of sailing time in the case of a vessel is logged on the aircraft or vessel by the registered owner of that aircraft or vessel or by an authorized agent operating the aircraft or vessel on behalf of the registered owner of the aircraft or vessel. The calculation of airtime or sailing time logged on the aircraft or vessel shall not include airtime or sailing time following the completion of the repair, retrofit, or modification of the aircraft or vessel that is logged for the sole purpose of returning or delivering the aircraft or vessel to a point outside of this state.

(3) This subdivision shall apply to aircraft or vessels brought into this state for the purpose of repair, retrofit, or modification on or after the operative date of this subdivision.
(f) The presumption set forth in subdivision (a) may be controverted by documentary evidence that the vehicle was brought into this state for the exclusive purpose of warranty or repair service and was used or stored in this state for that purpose for 30 days or less. The 30-day period begins when the vehicle enters this state, includes any time of travel to and from the warranty or repair facility, and ends when the vehicle is returned to a point outside the state. The documentary evidence shall include a work order stating the dates that the vehicle is in the possession of the warranty or repair facility and a statement by the owner of the vehicle specifying dates of travel to and from the warranty or repair facility.


Basically, under the new law, if you bought a boat, and have it in California for more than six-months, for whatever reason, out of the first 12, you're gonna have to pay sales taxes on it, regardless of where you bought it. The exception is if the boat was bought and then put into repair/refitting... however, you can't use the boat for much more than a calendar day after finishing said refitting/repairing or you'll get nuked with the tax.

However, registering the boat in Canada may give you an out, via section (b).
10-02-2008 04:42 AM
sasfish one year I cant believe it. Thats crazy.
10-02-2008 02:27 AM
emagin Here's a tidbit on California - you now have ONE YEAR to get a boat out of California if you don't plan to stay long term and want to avoid the sales tax.

-------- Original Message --------
Subject: [San Francisco Sailing] CA Sales Tax
Date: Thu, 02 Oct 2008 00:30:46 -0000
From: jam48hass
Reply-To: SanFranciscoSailing@yahoogroups.com
To: SanFranciscoSailing@yahoogroups.com



FYI:

AB 1452 has been signed, abolishing the California "90-day yacht
club". THe "waiting time" (to keep your new boat out of CA waters and
avoid paying sales tax) is now 1 year. Bill apparently says it takes
effect immediately.
10-01-2008 08:15 AM
Idiens
Quote:
Originally Posted by Omatako View Post
... 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. ...
Try sailing into UK or Dutch waters these days, their officials ask every time they stop you (plus proof of VAT payment, etc..). I fly a Belgium ensign and in both those countries I get stopped and asked. In Holland, several times a year.
10-01-2008 08:02 AM
sasfish
re

USCG documentation requires US citizenship however you could ride out a long cruising permit. You could also think about where you will sell the boat when youíre done with her; as you will have to import in order to sell. It cost us $25,000 plus the customsí crap in Australia when we sold two years ago
10-01-2008 01:26 AM
Omatako 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. Buyerís obligation to purchase the Vessel from Seller is conditioned upon Sellerís 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?"

FWIW
10-01-2008 12:46 AM
sab30
Quote:
Originally Posted by magnusmurphy View Post
Here's the way we looked at it:

We're Canadian and proud to sail under the Canadian flag. Why fly a foreign flag???
We bought the boat in the US and paid only GST in Canada, no duty and no PST. Yes we know that when we eventually bring the boat back to Canada, which we likely will do, those will be payable. In the meantime however we get a nice deferment. We did take the boat out of US waters to the Caribbean though and things might be different if you leave it in the US. We bought it in RI and only left six months later and nobody ever said anything about any local taxes.

I was also told that since we're Canadian citizens we cannot US flag the vessel. I have met people who flagged boats in countries they've never lived. To me that makes absolutely no sense though and I can never be proud of a flag that has no personal meaning to me. We fly our Canadian flag on our boat's stern proudly - only matched by our South African flag on the port spreader showing our heritage!

Magnus
Magnus,

I couldnt agree more..my post may have been confusing..Transport Canada says I can register the boat in Canada and fly the Canadian flag. I was told (by Canada Customs)) no duties and taxes would be owed unless I physically brought the boat into Canada. So being that we never plan on sailing it to Canada no sense in paying local taxes and fees...I will just pay the state tax where purchased and fly CDN flag as a CDN registered vessel.
09-30-2008 09:36 PM
magnusmurphy Here's the way we looked at it:

We're Canadian and proud to sail under the Canadian flag. Why fly a foreign flag???
We bought the boat in the US and paid only GST in Canada, no duty and no PST. Yes we know that when we eventually bring the boat back to Canada, which we likely will do, those will be payable. In the meantime however we get a nice deferment. We did take the boat out of US waters to the Caribbean though and things might be different if you leave it in the US. We bought it in RI and only left six months later and nobody ever said anything about any local taxes.

I was also told that since we're Canadian citizens we cannot US flag the vessel. I have met people who flagged boats in countries they've never lived. To me that makes absolutely no sense though and I can never be proud of a flag that has no personal meaning to me. We fly our Canadian flag on our boat's stern proudly - only matched by our South African flag on the port spreader showing our heritage!

Magnus
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