Delaware Yacht registration

[markram]

I dont know if there is a previous thread on this subject, so apologies in advance..

Our Bavaria is located permanently in the Mediterranean and at present is registered in the Marshall Islands, but we are thinking of switching flags and registering in Delaware. I was told that a boat registered in the State of Delaware has to be located for most of the year in Delaware and if not, then it cannot be registered there! This also appears on the official vessel registration form.
We had a previous boat that was registered in Delaware and I cannot recall if this issue came up. But now that I am a bit older and wiser, I am wondering if this is an issue that should be taken seriously or not. Especially in terms of boat insurance claims for example.
I would appreciate any feedback from members that have any experience in this matter.
Thanks

[Paul L]

The Delaware registration form says:
NOTICE: VESSELS CAN ONLY BE REGISTERED IN THE STATE OF PRINCIPLE OPERATION*. (If you do not use your vessel in
Delaware waters more often than waters of another state during the calendar year, you cannot register your vessel in Delaware.)

Clearly there are lots of boats that don't meet this requirement but are still registered. You vould contact one of the Delaware boat regustration compsnirs that do LLCs for info.

[malbert73]

For how lousy the waters of Delaware generally are for cruising there sure are a lot of boats registered there. Hmmm. [emoji3]

[markram]

Originally Posted by Paul L

The Delaware registration form says:
NOTICE: VESSELS CAN ONLY BE REGISTERED IN THE STATE OF PRINCIPLE OPERATION*. (If you do not use your vessel in
Delaware waters more often than waters of another state during the calendar year, you cannot register your vessel in Delaware.)

Clearly there are lots of boats that don't meet this requirement but are still registered. You vould contact one of the Delaware boat regustration compsnirs that do LLCs for info.

You are correct Paul - and that is my dilemma - the registration companies are of no real help as they are an interested party and they do not fill out the registration from you mentioned. By lying on the form one is performing an act of perjury by lying on this statement - not that this bothers me too much, but the insurance implications could be an issue. Anyway thanks for the feedback

[Sand crab]

If you keep your boat in the Med then you will not be using "your vessel in in another state more than Delaware ". That is the loophole and why Delaware is popular. If you come to the US go to Delaware most.

[Woodland Hills]

There are many documented boats with a Delaware home port, but I wonder how many are actually registered there. Or are registered in any state. There is a big difference between the location on the transom and the state on the window sticker.

[malbert73]

I am sure all are aware of no sales tax in Delaware as main reason for this

[Woodland Hills]

Originally Posted by malbert73

I am sure all are aware of no sales tax in Delaware as main reason for this

Also liberal incorporation laws that encourage the formation of LLCs that own boats as their sole asset.

[S/V Illusion]

The difference between tax minimization and tax avoidance is - one is smart, the other a felony.

[Woodland Hills]

Originally Posted by S/V Illusion

The difference between tax minimization and tax avoidance is - one is smart, the other a felony.

Exactly: avoiding taxes by buying an LLC that owns a boat is smart, illegally registering a boat in Delaware to evade sales tax is a crime. Avoidance is legal, evadence is not.

[markram]

Originally Posted by Sand crab

If you keep your boat in the Med then you will not be using "your vessel in in another state more than Delaware ". That is the loophole and why Delaware is popular. If you come to the US go to Delaware most.

Hi Sand crab - ok so if I follow you correctly the keyword here is "State" - in other words another state in the USA. No mention of another "country" more than Delaware - big difference of course.
In addition on the registration form there is a question asking whether you intend to operate the boat outside of US waters so I assume there would not be this question if it was not an option.
Thanks Sand crab - you helped me get to a decision.

[Mixman1]

There is a big difference between USCG Documentation and State Registration.
When you document your boat you can choose any hailing port you want. Even a landlocked state.

If you have the boat in a US state long enough (every state has its own laws) then you have to register it with the state.

If your purpose is minimizing taxes, that's a completely different subject and you have to take into account where you bought the boat, where you are keeping the boat, if import duty was ever paid on the boat....etc...

Since your boat is in the Med, you don't have to "Register" with any state at all.

By the way...
I am no expert. I am in the buying process and have done a lot of this homework here on the forum and other sources. Verify everything you read online.

[letsgetsailing3]

Why would you register it in a state?

You can document it with the coast guard for a modest fee. You can paint any name and location on the back you want. (as long as it matches that on your application.)

[Woodland Hills]

Originally Posted by letsgetsailing3

Why would you register it in a state?

You can document it with the coast guard for a modest fee. You can paint any name and location on the back you want. (as long as it matches that on your application.)

I thought there had to be a US post office in the home port if you are going to US document.

[Montanan]

Registering a vessel with a State is not the same as documenting the boat with the USCG. A State registry does not derive nationality to the boat. A State of the United States of America is not a Nation State. State registry does not convey the right to fly the flag of the USA. A maritime law matter for those that understand such and have concerns regarding such. A State may title a vessel, titling and registration are two distinct matters. A vessel may not be simultaneously titled by a State and documented by the USCG. The State issued title must be surrendered at the time a vessel is documented by the USCG.

Similar to say, The International Certificate for Pleasure Crafts, which is a so called unofficial proof of ownership, which is issued in the languages English, French and Dutch. The ICP document states the name and address of the owner of the vessel and basic details of the boat, like name, hull-number, engine etc. Many European boats have the so called "Dutch Light" registration. The Dutch ICP document has been changed in recent years so as to explicitly state that the certificate does NOT convey the right to fly the flag of The Kingdom of the Netherlands as defined under Article 91 of the United Nations Convention of the Sea [UNCLOS], nor that consequently The Kingdom of the Netherlands does not accept have responsibilities listed in Article 94 of UNCLOS. Yet, many Dutch Lite registered boats do fly a Dutch flag on their boat, but not legally, and without valid legal effect. Portugal in particular does not recognize the ICP as a legal registry and a boat will have issues when arriving in Portugal traveling under such "undocumented" status. The ICP is nothing but a unofficial proof of ownership, specifically it states: "Prior to issue of this document ownership has been rendered credible. This certificate is only valid as long as the particulars have not changed. In case of change, it must be returned to the issuing organization for amendment."

As to the validity of a State registration, [any State registration], such registrations are either valid or not valid and that depends solely on the State of principle use of the vessel. A registration may start as being valid and become invalid by changing its State of principle use.

“State of principle use” means the jurisdiction on whose waters a vessel is used or to be used most during a calendar year, which is the period from January 1 through December 31.

“Use” means to operate, navigate, or employ a vessel. A vessel is in use whenever it is upon the water, whether it is moving, anchored, or tied up to any manner of dock or buoy. A vessel is also in use if it is kept in any structure in readiness for use.

If a vessel does not have a State of principle use it should not be State registered. That would similar to say, registering a vehicle in a State in which the vehicle is not used. It is illegal and invalid to register in a State in which the article is not used. That is not to say, that some boat owners misregister their boats, but misregistration is not valid registration and that can have legal consequences as to be an undocumented boat. Note "undocumented boat" is NOT a boat that is NOT documented by the USCG. Do not get confused as to the term undocumented. An undocumented boat is a boat that does not have valid documents of registration be that State registration, US federal registration / documentation, or a foreign [to the USA] nation state flagging.

Note that a vessel may need to be registered in more than one State. It could have a State of principal use, but then spend a period of time in another State's waters, for example, 90 or 120 days and by staying for such statutorial defined period of use the vessel may trigger the need to thence register with the State that it has temporarily come to use.

Note that a vessel may be documented by the USCG and thus be "flagged" as to having USA nationality. A USCG documented boat may also be required to be registered with a State of the United States of America. 50 States hence 50 different State laws regarding registration of boats.

As to UNCLOS, The United States of America participated in the subsequent negotiations of modifications to the treaty from 1990 to 1994. The UNCLOS came into force in 1994. Although the United States now recognizes the UNCLOS as a codification of customary international law, it has not ratified it. That is to say, the US Senate has yet to ratify the treaty but the USA has recognized the treaty.