Fla Cruising permit vs tax the way to go?

If you flag the vessel foriegn flagged, you just need to leave to the Bahamas or out of Florida within 90 days, then when you come back, you can get a cruising permit for a year. Then once a year you need to go out of the country, but don't have to pay the FL sales tax. It's also fine if you do end up taking it to CA, because you could always run down to Mexico to check out of the country.

Jan Saxton

SAXTON DOCUMENTATION INC.
416 SE 15 Street
Fort Lauderdale, FL 33316

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Greetings,
Capt J. You're pretty darn close on your advice but a few other factors come into play such as checking in with Homeland Security EVERY time you change the location of the vessel (Reg's vary by district).
I second the suggestion of Jan Saxton. used her once-very satisfied.
Peter

It depends on the country you flag the vessel in. If it's flagged in some countries that reciprocate or something to that effect with the US, like Grand Cayman, you do not need to check in with Homeland Security if you go from port to port in US waters. Whereas other countries like Panamanian registered, you have to check in with homeland security each time it goes from one port to the next. If you come back from the Bahamas, you need to check in with Homeland Security and go there even if the vessel is US documented.

Check with a good documentation company.

It depends on the country you flag the vessel in. If it's flagged in some countries that reciprocate or something to that effect with the US, like Grand Cayman, you do not need to check in with Homeland Security if you go from port to port in US waters. Whereas other countries like Panamanian registered, you have to check in with homeland security each time it goes from one port to the next. If you come back from the Bahamas, you need to check in with Homeland Security and go there even if the vessel is US documented.

You may also get around paying the tax if you put/buy the vessel in a corporation (LLC) in a different state. But keeping the vessel out of FL for 180 days is a pain also, or is it once every 180 days it has to leave? I'm not sure on that one.

There is a bill on Gov Christ's desk that will limit state sales tax to $18K.
A big push by FYBA hopefully will make this a moot point for this owner, so he can keep in state w/o the aggro

Greetings,
Funny that Canada doesn't seem to have the afformentioed reciprical ageement with the US... eh?
Peter

If you do register the boat in another state, then the 180 day rule does not strictly apply if you get a dual state registration. FL allows a dual registration as long as the boat is not permamently in FL and will be moved out of FL in a reasonable period of time, but "reasonable period of time" is not specifically defined. Also, based on conversations with the FL authorities, time spent on the hard does not count towards the 180 days only time spent in the water or if the boat is immediately launchable as in a trailerable boat.

I would just pay the tax otherwise for years you will have to deal this and the fines are VERY substantial if you break the rules and they do monitor this.

At that price range I suggest to pay the tax to Florida. Then there are no hassles with cruising permits, Homeland Security, time in Florida and there may be an insurance break for you as a US flag vessel. Plus when you sell the boat you do not have the concern of "Not for sale to US residents while in US waters" which is the caveat for all boats that are here on a cruising permit.
The sales tax is currently a deduction on your IRS taxes, and if you finance you can deduct the interest as a second home.
Tucker Fallon

hi guys , anyone know what is the % of tax ,on the value of the boat to register it in FL ? why i ask , looking at buying a foreign flagged boat , then registering in FL
thanks

Greetings,
I suspect Jan Saxton would be able to answer all your questions...Peter

Cruising permits

Cruising permits require a check in at any port that has a customs office, a phone call usually suffices. The only exception is if you are stopping less than 24 hrs.

So what happens when a foreign flagged vessel arrives in Florida and wants to pay sales tax so that it can stay more than 180 days or whatever the time line is ?? or is that even possible without re-registering ?

The sales tax in Florida is now 6% to 7% depending on which county. (6% in Fort Lauderdale, the additional 1% is not on the entire amount) The new law sitting on the Governor's desk will cap the tax at $18,000 so that many yachts sold that might have been foreign flag, will now register in Florida. Unless he vetoes the bill it will become effective July 1st.
If you purchase a yacht that is currently flagged outside of the US and you want to register it in Florida, you might have to pay US Customs duty if it was built outsde of the US, and never legally imported. This duty however is only 1.5% on the current value, if it was built in the US a simple filing of a "returned goods" declaration will cover you.
Some US residents who own a yacht with a foreign flag may decide to register in Florida so that they will carry a US flag and avoid the problems of customs and cruising permits.
The Bill to cap the tax is known as the Maritime Full Employmnet Act and was passed so that Florida will now get $18,000 rather then nothing if it was foreign flagged. Plus boats could stay as long as they like in Florida and therefore spend more time in Florida boat yards giving more work to the employees.
Tucker Fallon

Sales tax and foreign flag

I don't believe a foreign national can register a foreign flagged vessel in the US, must be US citizen or resident..therefore... how does a foreign national with foreign vessel pay Florida "use tax" ??

Hi,

I think that to take advantage of the tax cap the vessel needs to be registered locally.

As you can see here anyone can own a US Registered Company.

http://www.myuscompany.com/

That company can own the boat,

Anyone can register a boat in Florida, citizenship is not a criteria. Then the boat is no longer "foreign flagged". I might suggest to future clients that they form a Florida corporation which is a fairly simple thing to do, so that the owner of the boat becomes a single asset corporation. This can be done for both US citizens and non citizens.
If the boat or corporation is owned by a foreign national when it is headed to the Bahamas or other foreign destinations, the captain or owner will have to clear US customs before leaving even if it is registered in Florida.
If the boat is US built and US flagged it then can be offered for charter in the US also.
The Florida Yacht Brokers Association will be having an educational seminar on June 17th, which I will be attending to get the latest information. Since I am not an attorney or accountant I am not giving legal or accounting advice here, but as a Certified Professional Yacht Broker I do need to keep up on the latest changes. Contact me through Yachtforums for more information.
Tucker Fallon