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Discussion Starter · #1 ·
First time buyer legal advice

This summer will be my first time buying a sailboat and there are some point I'd like to clarify before its too late.

I'm Canadian and I will buy the boat in the US and plan to sail it in lake Champlain since it's already located there.

I have heard that it is possible to avoid the sale tax (completely legally) by registering the boat in Canada and sailing it in the US and only taking it back in Canada during winter (inbound vessel).

I'd like to know the procedure for doing so. I've looked around a bit but haven't found any source clearly explaining this.

Thanks!
 

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You'll be hit for the Canadian taxes and possibly duties the moment you bring the boat into Canada. Not sure about the US tax ramifications, I think each state had its own way of administering this sort of thing. We bought our boat ten years ago in WA, didn't pay US taxes but we were taking the boat out of the US right away.

Wondering, though, why you're willing to pay a 40% premium (assuming the CDN dollar hasn't recovered by then) granted the selection may be better (was for us) but the exchange is brutal now.
 

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Discussion Starter · #3 ·
I know the CAD$ is pretty bad now but I've found a boat I really like and I haven't found anything comparable in Quebec for the same price.

For the tax, thats where I'm a bit lost. I'm not really sure what the procedure is.
 

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Discussion Starter · #4 ·
Do you know what would be the better course of action between registering in Vermont and leaving it in Vermont or registering in Canada and storing it in Canada. Since you indicated that either way I would have to pay tax I would be better paying them in CAD. Or maybe you would know where I could find this information?

Thank you
 

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As Faster says, no taxes are due in Canada until you bring it across the border. If the boat is of non NAFTA manufacture duty will be payable as well as sales tax. I'm going to assume that you don't know the difference between a licensed Canadian boat and a Registered Canadian boat maybe this will provide a little background. Licensed or Registered.
 

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Discussion Starter · #6 ·
As a Canadian am i obligated to license my boat in Canada or can I do s in the US?

If I license (and register since I plan to name it) in Canada and only sail in the US and store in in the US (Vermont) during summer, will I have to pay taxes either in Canada or the US?

If I can License it in the US (what they call register), is there any advantage in doing so?
 

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As a Canadian registered boat you will pay no Canadian taxes as long as the boat is out of the country. The first time you bring it in taxes are due.

There's no obligation to truly 'register' the boat just to be able to 'name' it. In fact registration complicates the naming because the name must be unique in the registry (eg our last boat was registered and had to be re-named Phantom V because there were 4 other Phantom x's already registered) If you license the boat you get a provincial number (here 'BC - 123456' and at no cost) that identifies the boat. What you name her is up to you. There may be some advantage to registering the boat if you intend to keep her in the US.

Sorry I can't help with the ramifications of a foreign-owned state or USCG registered boat. We have lots of Canadian boats moored in WA marinas close to the border so that is do-able - but I'd expect if you register the boat as a US vessel their taxes would be due - and probably any other user fees that the various states may impose. But it's possible that foreign registration of that sort is not permitted.. not sure.

Best to ask the government agencies that you'll have to deal with.. many of these answers may well be available from official sources on-line.
 
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