US Cruising Permit for Canadian (and state tax question)

[Montanan]

FYI: The federal code.

LII Electronic Code of Federal Regulations (e-CFR) Title 19 - Customs Duties CHAPTER I - U.S. CUSTOMS AND BORDER PROTECTION, DEPARTMENT OF HOMELAND SECURITY; DEPARTMENT OF THE TREASURY PART 4 - VESSELS IN FOREIGN AND DOMESTIC TRADES General § 4.94 Yacht privileges and obligations.
19 CFR § 4.94 - Yacht privileges and obligations.

§ 4.94 Yacht privileges and obligations.
(a) Any documented vessel with a pleasure license endorsement, as well as any undocumented American pleasure vessel, shall be used exclusively for pleasure and shall not transport merchandise nor carry passengers for pay. Such a vessel which is not engaged in any trade nor in any way violating the Customs or navigation laws of the U.S. may proceed from port to port in the U.S. or to foreign ports without clearing and is not subject to entry upon its arrival in a port of the U.S., provided it has not visited a hovering vessel, received merchandise while in the customs waters beyond the territorial sea, or received merchandise while on the high seas. Such a vessel shall immediately report arrival to Customs when arriving in any port or place within the U.S., including the U.S. Virgin Islands, from a foreign port or place.

(b) A cruising license may be issued to a yacht of a foreign country only if it has been made to appear to the satisfaction of the Secretary of the Treasury that yachts of the United States are allowed to arrive at and depart from ports in such foreign country and to cruise in the waters of such ports without entering or clearing at the customhouse thereof and without the payment of any charges for entering or clearing, dues, duty per ton, tonnage, taxes, or charges for cruising licenses. It has been made to appear to the satisfaction of the Secretary of the Treasury that yachts of the United States are granted such privileges in the following countries:

Argentina
Australia
Austria
Bahama Islands
Belgium
Bermuda
Canada
Denmark
Finland
France
Germany, Federal Republic of
Greece
Honduras
Ireland
Italy
Jamaica
Liberia
Marshall Islands
Netherlands
New Zealand
Norway
Saint Kitts and Nevis
Saint Vincent and the Grenadines
Sweden
Switzerland
Turkey
United Kingdom and the Dependencies: the Anguilla Islands, the Isle of Man, the British Virgin Islands, the Cayman Islands, and the Turks and Caicos Islands
(c) In order to obtain a cruising license for a yacht of any country listed in paragraph (b) of this section, there shall be filed with the port director an application therefor executed by either the yacht owner or the master which shall set forth the owner's name and address and identify the vessel by flag, rig, name, and such other matters as are usually descriptive of a vessel. The application shall also include a description of the waters in which the yacht will cruise, and a statement of the probable time it will remain in such waters. Upon approval of the application, the port director will issue a cruising license in the form prescribed by paragraph (d) of this section permitting the yacht, for a stated period not to exceed one year, to arrive and depart from the United States and to cruise in specified waters of the United States without entering and clearing, without filing manifests and obtaining or delivering permits to proceed, and without the payment of entrance and clearance fees, or fees for receiving manifests and granting permits to proceed, duty on tonnage, tonnage tax, or light money. The license shall be granted subject to the condition that the vessel shall not engage in trade or violate the laws of the United States in any respect. Upon the vessel's arrival at any port or place within the U.S. or the U.S. Virgin Islands, the master shall comply with 19 U.S.C. 1433 by immediately reporting arrival at the nearest Customs facility or other place designated by the port director. Individuals shall remain on board until directed otherwise by the appropriate Customs officer, as provided in 19 U.S.C. 1459.

(d) Cruising licenses shall be in the following form:

License To Cruise in the Waters of the United States
To Port Directors:
For a period of ____ from ____(Date) the ____(Flag) ____ (Rig) yacht ____(Name) belonging to ________ of (Owner's name) ________(Address) shall be permitted to arrive at and depart from the United States and to cruise in the waters of the Customs port of

(Name of port or ports)
without entering and clearing, without filing manifests and obtaining or delivering permits to proceed, and without the payment of entry and clearance fees, or fees for receiving manifests and granting permits to proceed, duty on tonnage, tonnage tax, or light money.
This license is granted subject to the condition that the yacht named herein shall not engage in trade or violate the laws of the United States in any respect. Upon arrival at each port or place in the United States, the master shall report the fact of arrival to the Customs officer at the nearest customhouse. Such report shall be immediately made.

Issued this _____ day of _______, 19__

(Port Director of Customs)
Warning: This vessel is dutiable:

(1) If owned by a resident of the United States (including Puerto Rico), or brought into the United States (including Puerto Rico), for sale or charter to a resident thereof, or

(2) If brought into the United States (including Puerto Rico) by a nonresident free of duty as part of personal effects and sold or chartered within one year from date of entry.

Any offer to sell or charter (for example, a listing with yacht brokers or agents) is considered evidence that the vessel was brought in for sale or charter to a resident or, if made within one year of entry of a vessel brought in free of duty as personal effects, that the vessel no longer is for the personal use of the non-resident.

If the vessel is sold or chartered, or offered for sale or charter, in the circumstances described, without the owner first having filed a consumption entry and having paid duty, the vessel may be subject to seizure or to a monetary claim equal to the value of the vessel. See Chapter 89, Additional U.S. Note 1, HTSUS, and subheadings 8903.10, 8903.91, 8903.92, 8903.99.10, 8903.99.20, and 8903.99.90, HTSUS.

(e) A foreign-flag yacht which is not in possession of a cruising license shall be required to comply with the laws applicable to foreign vessels arriving at, departing from, and proceeding between ports of the United States.

[T.D. 69-266, 34 FR 20423, Dec. 31, 1969]
Editorial Note:
For Federal Register citations affecting § 4.94, see the List of CFR Sections Affected, which appears in the Finding Aids section of the printed volume and at www.govinfo.gov.

[Montanan]

Per Denison Yacht Sales:

https://www.denisonyachtsales.com/20...in-u-s-waters/

All foreign-flagged vessels are required to obtain a cruising license. This license will allow you to travel from one jurisdiction to another without having to make formal entry or clearance all over again in each new location. If your vessel is eligible, you may be issued your cruising license during your first formal entry, and the license will be valid for up to one year. A first time cruising license also may be issued to a vessel during closing if the closing occurs in U.S. waters and the closing paperwork reflects this fact.

[Nightsky]

Originally Posted by KevinE

Thanks. To rephrase my question, if I purchase a vessel in say, the Chesapeake Bay, is there any work around to not have to take the vessel out of country and re-enter in order to get a US Cruising Permit? If I take the vessel back to Canada I would be subject to Canadian taxes. My intended cruising grounds are elsewhere so no desire to go down this route.

In my OP I alluded to previous experience where were renewed an expired cruising permit on a boat we used to have without having to do an exit and re-entry.

You can register the boat Canadian or licence it in your province of residence. So long as the boat doesn’t enter Canada no Canadian taxes are due. Then get your cruising permit. We did this with a boat we bought in Florida. We also had to renew our cruising permit when borders closed during early days of the pandemic. We were able to get a one year extension from the Baltimore office at the airport without having to leave the country. IIRC we had to wait for 2 weeks after our permit expired before getting the new one. As per one of Montanan’s posts it is entirely possible the agent in Baltimore exceeded his authority in not requiring the vessel to have left the country before issuing a new permit. This may have been due to restrictions imposed on all of us during the pandemic.

[AiniA]

Originally Posted by Montanan

The visa is issued to a person and is a permit to be in country for a duration of time, the cruising permit is issued to the boat to facilitate its customs procedures upon entry into each and every port of the USA. The two are distinctly different issues and procedures.

Even citizens must clear customs when entering the USA, the visa status does not change the customs requirements.

Many cruising permits are issued for less than one year.

Not the way it played out. We were told at the container port customs desk our CP would expire on Dec 31 (not quite a year) and we would have to take the boat out of the US for two weeks and reenter to get a new permit. I pointed out that this was basically impossible - to Bermuda or Nova Scotia in January. We planned a trip to Bermuda in June and asked if we could get a new permit when we got back to New Jersey. They said 'No' and we were back to step 1. The only solution I could come up with was to get state registry in Rhode Island, which seems to be like the Liberia of the US. The folks in RI were quite happy to take our money for a two year permit. We did our Bermuda trip and arrived back in the US. Cleared in with no problem but got a call from a Customs guy who said we could not be a Canadian vessel and have RI registry. I explained our situation and he said we should have been given an open-ended CP because we were legal residents of the US (visas). He then gave us an open-ended CP so long as we had visas. A big problem is that a lot of Homeland Security folks do not understand their own regulations. This was far from the only problem I am aware of.

[KevinE]

When we left for Bahamas we called and asked if we had to surrender our permit and where told no (false info). Came back to bite us 8 months later when our permit expired in Annapolis. Yay, let's go to Bermuda in hurricane season... Rules were black and white to me we had to leave and renter but somebody renewed for us...there were some high fives thrown that day.

After this we logged every phone call we had with customs when changing port, including officer and badge number. Today I would record all phone calls. Check in procedure was unclear back in 2010, some officers said every state, others, if you move 2 miles we want to know...then all the arguments because we didn't do it properly. Hopefully the phone app cleans all this nonsense up.