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US boat / Canadian waters / long-term cruising

Discussion in 'General Yachting Discussion' started by Cowger, Feb 11, 2020.

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  1. Cowger

    Cowger Member

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    Hello, new member here trying to figure out US/Canadian laws and regulations.

    (To start, I'm very afraid that this is one of those topics that has been "discussed endlessly" on these forums, but for the life of me I can't seem to figure out the search feature here. Anything I do find seems to be a decade old. So with apologies in advance...)

    My wife and I (US citizens) are considering purchasing a boat in the US, moving her to Vancouver, BC, berthing her in a boat house there, and living ~half of the year on the boat. I understand that one option would be to import the boat into BC and pay the Provisional Sales Tax at that time. My question is whether there is a way to avoid paying this PST (20%?) and still keep the boat in BC long-term.

    In the US, if we purchase a boat as a sole-asset LLC, I believe that we avoid paying California sales tax. Is there any such provision for BC with an LLC?

    The boat is USCG Documented, in case that matters.

    Hoping that someone who has researched the latest laws on this might easily be able to share their wisdom.

    Thank you,
    Bryan
  2. JWY

    JWY Senior Member

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    You also want to be careful about duty depending on where the boat was built and if you need to import the vessel. NAFTA is no longer the ticket for US built boats going to Canada but if the boat is a US manufacturer, then the NAFTA option should at least be considered to see if there is accredibility. I can refer you to a US customs broker for that. The provincial taxes are serious and monitored. Transport Canada is the equivalent of the USCG. I have a current contact at Transport Canada if that is of interest. I also have contact with a Canadian maritime attorney who should be able to assist you on taxation issues.

    I have a lot of Canadian clients and sell a lot of Canadian built yachts so I am speaking from experience; however, note that I'm not giving you answers but am offering you the experts in the marine industry that I consult with.

    Judy
  3. Capt J

    Capt J Senior Member

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    I don't know the answers to your questions, that's the job of a lawyer.

    What I do know is you could run the boat to the US, and then back into Canadian waters to avoid the tax. I think Canada gives you a 6 month cruising permit, but double check the length of time. Supposedly according to one website you have to leave by October 31st for the winter or have to pay tax, but can get an E-99 permit (meaning you're getting work done over the winter) to get around the tax according to this website:

    boating.ncf.ca/canadaborder.html

    However, my recommendation is to contact a Canadian maritime attorney.
  4. Cowger

    Cowger Member

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    Thank you, both. I had intended to add "please point me to a good lawyer if you know of one", so I'll PM you, Judy.

    The boat is a Hatteras, BTW.

    Cheers,
    Bryan
  5. Perlmudder

    Perlmudder Member

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    From what I have seen an E-99 permit is the way many people go. My boating club is in Canada, but most of the members boats are registered in the US and owners, US citizens. Most of the boats, 100+/- per year get E-99's so the boats can stay in Canada for the winter. The club marina does work on them anyway in the off season, so it makes it simple. The club even arranges for customs agents to come down one day so that everyone can file their E-99.
  6. Cowger

    Cowger Member

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    This is great information, thank you! Maybe I should be looking to join a boating club in the Vancouver area. Our insurance is going to need to see that the boat is properly overseen during the winter (when we're back home in California), so this would perhaps solve both problems...

    Thanks again!
    Bryan
  7. Cowger

    Cowger Member

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    Looks like E-99 has been replaced by E29B. This does appear to be a valid way to keep the boat over-winter, as you suggest. There's a timer, though: After 12 months you have to start paying partial GST/PST, and after 24 months you need to pay the full amount.

    To avoid hitting that 12 month window, the boat must be exported from Canada. I can't seem to find anything specified, however, as to how long it must remain exported. Could this be as simple visiting the San Juans every year for a week and then bringing the boat back across into Canada? Seems too good to be true, though...

    Bryan
  8. Capt J

    Capt J Senior Member

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    That's precisely what foreign flagged vessels do in South Florida every year.....go to the Bahamas for a week or two, come back and renew their 1 year U.S. cruising permit.
  9. gsholz

    gsholz New Member

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    A US boat can cruise/moor up to a year in BC. Then you need to re-enter the US. No BC tax is due. There is no limit on how many times you can do this. Just tell customs how long you plan on staying in Canada (< 1 year) when entering and display the control number in a window. Once you enter the US, if you stay more than 60 days in WA, you may be subject to WA use tax (9%) if you are not a WA resident. If you are a WA resident, sales/use tax is due immediately on purchase or entry.
    Last edited: Feb 11, 2020
  10. Cowger

    Cowger Member

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    Excellent information, thank you!!
  11. Cowger

    Cowger Member

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    Awesome, I think we have resolution to my questions.... Thank you, Cap!
  12. olderboater

    olderboater Senior Member

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    No we don't. Capt J gave you that resolution in post #3, "However, my recommendation is to contact a Canadian maritime attorney." Don't forget that step. Rules and interpretations change all the time. The answers you get here are going to be generally correct, but you need specifics based on your exact boat and exact situation and your residency and all other factors. I believe you have your answer from here but advise you not to overlook the need to have it confirmed or adjusted by an attorney knowledgeable in the legal specifics and able to ask you all the right questions. A one hour consultation may be money very well spent.
  13. Cowger

    Cowger Member

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    Thank you, I already have been in touch with one and am in an active dialog with a second. I appreciate your concern and advice.

    Bryan
  14. dennismc

    dennismc Senior Member

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    we have 2 US citizens with US boats in the marina, they just leave once a year with the boat, clear back into the US and then return, no taxes no hassles. They also travel back and forth via ferry and vehicles as regular tourists, no problems. I think tje biggest issue may be keeping the boat out of the US more than one year prior to returning, may capture US taxes. I have always consulted the customs service as to current law and be sure to have all your questions in order first.
  15. Capt J

    Capt J Senior Member

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    Also customs in one port in Canada, may very well interpret and enforce the law differently than customs in a different port in Canada.
  16. Cowger

    Cowger Member

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    Great to know and I appreciate your "local" Vancouver perspective, exactly where we hope to be soon.

    Cheers!
    Bryan