taxes and registration
Scott, The 8.6% you paid in Washington State did not go to pay the Coast
Guard. The federal income tax you pay (paid) each year pays that.
If you are not using a boat in a state, then I see no reason to pay tax to
that state. It is legal to document your boat anywhere you wish, and avoid
paying that state tax.
At least in Florida, if a foreign flagged boat is in the waters more than 90
days, they are hit with various taxes--and sometimes penalities which are
substantial. I know that Washington also goes after people who leave their
boats in the Washington marinas. There are tax people who walk the docks and
check off the boats--because I was contacted by these people when I kept my
boat in Washington state. I had to prove that I had paid sales tax in
California on the vessel, and I had to pay a small fee to Washington state,
even though I left the boat in the marina during the winter only.
There are also a number of legal ways to deminish various taxes, and there is
nothign wrong with taking these steps. That is what tax lawers and
accountants make the big bucks for.
The US documentation has nothing to do with either protection of the US
military or the military being able to sieze your vessel for national defense.
It is a good way of "flagging" your vessel when traveling overseas. On
occasion rarely it may save some state taxes. It gives a paper trail of
ownership and any liens against the vessel. I have taken state registered
vessels to Mexico, with no problems. But all the vessels I took to multip
countries were documented.
Bob Austin
Bob,
Is there a practical list of documentation that one should have aboard in
any situation? Barring the unforeseen complications of entering another
country, what should we include in those documents?
Robert Miller
Scott, The 8.6% you paid in Washington State did not go to pay the Coast
Guard. The federal income tax you pay (paid) each year pays that.
If you are not using a boat in a state, then I see no reason to pay tax to
that state. It is legal to document your boat anywhere you wish, and avoid
paying that state tax.
At least in Florida, if a foreign flagged boat is in the waters more than 90
days, they are hit with various taxes--and sometimes penalities which are
substantial. I know that Washington also goes after people who leave their
boats in the Washington marinas. There are tax people who walk the docks and
check off the boats--because I was contacted by these people when I kept my
boat in Washington state. I had to prove that I had paid sales tax in
California on the vessel, and I had to pay a small fee to Washington state,
even though I left the boat in the marina during the winter only.
There are also a number of legal ways to deminish various taxes, and there is
nothign wrong with taking these steps. That is what tax lawers and
accountants make the big bucks for.
The US documentation has nothing to do with either protection of the US
military or the military being able to sieze your vessel for national defense.
It is a good way of "flagging" your vessel when traveling overseas. On
occasion rarely it may save some state taxes. It gives a paper trail of
ownership and any liens against the vessel. I have taken state registered
vessels to Mexico, with no problems. But all the vessels I took to multip
countries were documented.
Bob Austin
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Clipping = Bob,
Is there a practical list of documentation that one should have aboard in
any situation? Barring the unforeseen complications of entering another
country, what should we include in those documents?
My suggestion is a notebook that includes:
- Passports for every crew member
- A typed list of all crew members with name; date of birth; nationality;
passport number; passport issuing office - Ships documentation
- Current slips insurance certificate
- Radio operators license and radio license
Optional (some countries request)
6) Make and model and serial number of ALL engines on the boat
7) Fire arm details and ammunition count
8) Make model and serial number of life raft
9) Life raft repack certificate
10) Wine, beer and liquor quantities on board
11) Some available cash for fees (occasionally as much as $100+
equivalent), sometimes they will accept other currencies or credit card, or
you can go to an ATM
I also suggest that you have a sealed envelope that every crew member has
written with there medical history and current list of medications if any.
This is only to be opened in case of a medical emergency.
Good boating, John Harris
Bob said: Scott, The 8.6% you paid in Washington State did not go to pay
the Coast
Guard. The federal income tax you pay (paid) each year pays that.
[scott] I know, it just feels like it should. It would really bum me out
to think all that money went to Washington state.
[Bob]: If you are not using a boat in a state, then I see no reason to pay
tax to
that state. It is legal to document your boat anywhere you wish, and avoid
paying that state tax.
[scott] Not true. If you live and use the boat in WA you pay either a
sales tax or a use tax, they get you one way or another. It's one of the
states even a corporation won't protect you from paying the use tax.
[Bob] At least in Florida, if a foreign flagged boat is in the waters more
than 90
days, they are hit with various taxes--and sometimes penalities which are
substantial. I know that Washington also goes after people who leave their
boats in the Washington marinas. There are tax people who walk the docks
and
check off the boats--because I was contacted by these people when I kept my
boat in Washington state. I had to prove that I had paid sales tax in
California on the vessel, and I had to pay a small fee to Washington state,
even though I left the boat in the marina during the winter only.
[scott] Yup, that's it.
[bob] There are also a number of legal ways to deminish various taxes, and
there is
nothign wrong with taking these steps. That is what tax lawers and
accountants make the big bucks for.
[scott] I would rather pay taxes to the government than hire a lawyer. Yes
I realize many government employees are lawyers. My experience is if you
need a lawyer it's more trouble than it's worth. I do have an accountant. I
have nothing against lawyers personally, I just want to keep my life simple.
Since I can't understand most documents a lawyer writes I avoid them.
[Bob] The US documentation has nothing to do with either protection of the
US
military or the military being able to sieze your vessel for national
defense.
[scott] Really? Are you saying in time of war the government doesn't seize
documented vessels? I thought I'd read instances of that during WWII, but
I'm getting old and my brain is full, so I'm probably mistaken.
[Bob] It is a good way of "flagging" your vessel when traveling overseas.
On
occasion rarely it may save some state taxes. It gives a paper trail of
ownership and any liens against the vessel. I have taken state registered
vessels to Mexico, with no problems. But all the vessels I took to multip
countries were documented.
[scott] As I said in my original post, I don't fully understand the issues
around documenting a vessel. I don't understand why it would be documented
in another country if the motivation wasn't to escape paying taxes? Again,
I'm pleading ignorance in this regard. Perhaps someone can elaborate on why
a boat bought and paid for by a US citizen, who lives in the US, pays taxes
in the US and keeps his boat in the US would document it offshore (if for
any other reason that to escape taxes).
Scott Bulger, Alanui, N40II, Seattle WA
I also suggest that you have a sealed envelope that every crew member has
written with there medical history and current list of medications if any.
This is only to be opened in case of a medical emergency.
[scott] If you have controlled substances on board you need a prescription
in your possession as well. While you can get morphine and other narcotics
for your ships medical kit, if you are boarded, don't declare them and then
can't produce a prescription, you can be thrown in jail and have your boat
confiscated.
Scott Bulger, Alanui, N40II, Seattle WA
From the US perspective, one reason for a flag of convenience would
be if you ever wanted to hire a foreign national to crew on your boat
when you were entering US waters. US flagged vessels must have only
US crew. Penalties are very big if you violate this one.
Some states make it easy to avoid taxes with an offshore registry
(flag of convenience), so that's one motivation. Your (and my) home
state of WA doesn't happen to be one of those 'easy' states.
But I agree with posters who say you can legally avoid state taxes,
either as a US documented vessel or foreign flagged, if you do an
offshore DELIVERY (beyond any states waters, usually 3 miles), you
(usually) have to stay completely out of your home state and if you
don't stay in any one state very long. But each state's laws need to
be studied to find a legal path to do this. Some states don't have
sales tax (Oregon, etc.) and others have caps on the sales tax (like
Virginia) that are very low. CA residents have their own strategies
that are well known.
Personally, I think its too much of a hassle to avoid taxes if you
are planning on staying in US waters for some period of time. You
have to live like a gypsy.
But if you buy the boat with intention to cruise outside the country
for a few years, and are just keeping it inside US waters only long
enough to get it commissioned and ready, then why not do an off-shore
delivery and then delay paying the tax bill until you return? Who
knows, you might sell the boat before you return or return somewhere
else and never have to pay it.
John
[scott] As I said in my original post, I don't fully understand
the issues
around documenting a vessel. I don't understand why it would be
documented
in another country if the motivation wasn't to escape paying
taxes? Again,
I'm pleading ignorance in this regard. Perhaps someone can
elaborate on why
a boat bought and paid for by a US citizen, who lives in the US,
pays taxes
in the US and keeps his boat in the US would document it offshore
(if for
any other reason that to escape taxes).
Scott Bulger, Alanui, N40II, Seattle WA
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[scott] Not true. If you live and use the boat in WA you pay either a
sales tax or a use tax, they get you one way or another. It's one of the
states even a corporation won't protect you from paying the use tax.
Yes, but consider the huge numbers of expensive boats with American
hailing ports that reside in Sidney, B.C. I can tell you they are
not there for the climate. Their occasional voyages to US waters
satisfy the Canadians and their "permanent" moorage in B.C avoids
state sales taxes for their owners.
Best,
Steve
Steve Dubnoff
1966 Willard Pilothouse
www.mvnereid.com
sdubnoff@circlesys.com
Steve suggested: Yes, but consider the huge numbers of expensive boats with
American
hailing ports that reside in Sidney, B.C. I can tell you they are
not there for the climate. Their occasional voyages to US waters
satisfy the Canadians and their "permanent" moorage in B.C avoids
state sales taxes for their owners.
If I'm not mistaken they enforce the reciprocal 6 month timing to the T.
I've heard of people being ticketed and having to prove they were out of the
country (each country) the required amount of time.
My head hurts. This is why I just pay the tax.
On a positive note, today I washed the soot and ash of the boat. She's a
beautiful lady again! Scott