French Citizen, Permanent resident in Canada buying a french registered boat in US

[Montanan]

Okay, California sales transaction. Devil is in the details.

Your going to need to move the boat to avoid California taxation. You will need a one trip permit.

First question, did the purchase or delivery transaction occur in State or outside the State?

California rules apply as to sales / use taxation, property taxation and registration and as to titling.

Use tax rules:

Reference: https://www.boe.ca.gov/pdf/pub52.pdf


Private party purchase for out-of-state use, one-trip permit:

The purchase of a vehicle from a person in California, who is not required to hold a dealer’s license or a seller’s
permit (private party), is generally subject to use tax at the time the vehicle is registered with the DMV. However,
a purchaser is not required to pay California use tax if the only use of the vehicle purchased from a private party
in California is to remove it from the state and it will be used solely thereafter outside this state. This exclusion
from use tax requires that no other use can be made of the vehicle in this state. A One-Trip Permit may be issued
by the DMV in lieu of registration, for operating certain vehicles while being moved or operated unladen for one
continuous trip from a place within this state to another place outside this state. This exclusion does not apply to sales tax.

If purchased or delivered out-of-state
The applicable test period used to establish whether a vehicle or vessel purchased or delivered out-of-state is presumed to have been purchased for use in this state generally depends upon the purchase date of the vehicle or
vessel.
If you purchase a vehicle or vessel outside of California but first functionally used it in California, the exclusion does not apply and the purchase and use is subject to use tax.
For purchases or binding purchase contracts entered into prior to October 2, 2004, and on or after July 1, 2007,
through September 30, 2008, contact your local BOE office for instructions on how to qualify for this exclusion.
For purchases beginning October 2, 2004, through June 30, 2007, and on or after October 1, 2008, a vehicle or
vessel purchased outside of California, first functionally used outside of California, and brought into California
within 12 months from the date of its purchase is also presumed to have been purchased for use in California and
subject to tax if any of the following conditions occur:
 Purchased by a California resident as defined in section 516 of the California Vehicle Code1
, or
 In the case of a vehicle, subject to California vehicle registration during the first 12 months of ownership, or
 In the case of a vessel, subject to property tax in California during the first 12 months of ownership, or
 Used or stored in California for more than one-half of the time during the first 12 months of ownership

The four conditions listed above are independent conditions under which the presumption of purchase for use in
California may arise. Only one of the conditions needs to be met for the presumption to apply.
The presumption may be rebutted if the purchaser provides sufficient documentation as evidence to prove the
vehicle or vessel was purchased for use outside California during the first 12 months of ownership. This evidence
may include, but is not limited to, proof of registration of the vehicle or vessel with the proper out-of-state
authority; whether the purchaser had a residence out-of-state; the location that the vehicle or vessel was insured
for; the amount of time the vehicle or vessel was in California; and whether the purchaser’s move to California was
voluntary or involuntary.
If a purchaser brings a vehicle or vessel to California during the first 12 months of ownership and provides
evidence that at the time of the purchase the purchaser had no intention that the vehicle or vessel would be used
in California, this alone is sufficient to establish that it was purchased for use outside California. For example, a
purchaser voluntarily moving to California within 12 months of the purchase date does not automatically prevent
the purchaser from overcoming the rebuttable presumption. Instead, a voluntary move is one factor to consider,
along with all the other facts and circumstances, when determining whether a vehicle or vessel was purchased for
use outside of California.

The presumption may be rebutted if the purchaser provides sufficient documentation as evidence to prove the
vehicle or vessel was purchased for use outside California during the first 12 months of ownership. This evidence
may include, but is not limited to, proof of registration of the vehicle or vessel with the proper out-of-state
authority; whether the purchaser had a residence out-of-state; the location that the vehicle or vessel was insured
for; the amount of time the vehicle or vessel was in California; and whether the purchaser’s move to California was
voluntary or involuntary.
If a purchaser brings a vehicle or vessel to California during the first 12 months of ownership and provides
evidence that at the time of the purchase the purchaser had no intention that the vehicle or vessel would be used
in California, this alone is sufficient to establish that it was purchased for use outside California. For example, a
purchaser voluntarily moving to California within 12 months of the purchase date does not automatically prevent
the purchaser from overcoming the rebuttable presumption. Instead, a voluntary move is one factor to consider,
along with all the other facts and circumstances, when determining whether a vehicle or vessel was purchased for
use outside of California.
Assistance with your questions on out-of-state purchases
The Sales and Use Tax Law can be complex, and you are encouraged to put your tax questions in writing. Not only
will that give us more information on which to base our advice to you, it may protect you from owing tax, interest,
or penalties if we should give you erroneous information. Such protection is not provided for advice given to you
verbally, in person, or on the telephone. Requests for written advice can be emailed to the Board of Equalization
(BOE) at www.boe.ca.gov/email/ or mailed directly to the BOE field office nearest you. For instructions on how to get
your tax questions in writing, please see BOE-8, Get It in Writing.
Also, please see Frequently Asked Questions—Use Tax on Purchases of Vehicles, Vessels, and Aircraft page on our
website at FAQ - Use Tax on Purchases of Vehicles, Vessels, Aircraft - Board of Equalization.

Vessels
Types of documents that should be retained to support your claim that a vessel was not purchased for use in
California include:
 Mooring receipts;
 Service/fuel receipts;
 Credit card receipts/bank statements;
 Miscellaneous receipts (incidentals, meals, or toll receipts);
 A copy of the purchase agreement or contract;
 Documents that show delivery outside of California and who contracted for that delivery (buyer or seller);
 Documents to show the first functional use outside of California;
 Insurance documents which indicate the location and time period of coverage of vessel and its navigational
limits;
 Receipts for lodging; and
 Any other documents showing the location of your vessel during the appropriate test period after purchase.
All documentary evidence must be retained for at least eight years.
For a purchaser to qualify for this exclusion from use tax, the vehicle or vessel must be delivered to the purchaser
outside of California. Generally, when the vehicle or vessel is delivered to the purchaser or their representative in
California, tax applies. However, if the contract for sale requires the vehicle or vessel to be shipped out of state,
and it is shipped out of state by the facilities of the seller or by delivery to a common carrier, whether hired by
the purchaser or seller, then the sale occurs outside of California and no tax is due. If, however, regardless of the
contract, the vehicle or vessel is diverted to the purchaser or their representative in California, then tax applies. For
example, if a purchaser asks a friend or agent to deliver the property from California to the purchaser himself or
herself at an out-of-state location, use tax applies.
For additional information, please refer to Regulation 1620, Interstate and Foreign Commerce, available at
Board of Equalization – State of California.

California Registration rules:

What Vessels Must be Registered?
Generally, every sail-powered vessel over eight feet in length and every motor-driven vessel (regardless of length) that is not documented by the U.S. Coast Guard which is used or on the waters of this state are subject to registration by the Department of Motor Vehicles (DMV). The vessel must be located in California.

Vessels previously registered in other states must be registered in California within 120 days of being brought into the state, if it will be used upon California waterways the majority of the time.

The term vessel applies to every description of water-craft used or capable of being used as a means of transportation on water, except the following:

A seaplane on the water.
A watercraft specifically designed to operate on a permanently fixed course and guided by a mechanical device that restricts the watercraft's movement to the fixed course.
A floating structure that is designed and built to be used as a stationary waterborne residential dwelling, which, (a) does not have and is not designed to have a mode of power of its own, (b) is dependent for utilities upon a continuous utility linkage to a source originating on shore, and (c) has a permanent, continuous hookup to a shoreside sewage system.
The following vessels do not have to be registered in California:

Vessels propelled solely by oars or paddles.
Nonmotorized sailboats that are eight feet or less in length.
Nonmotorized surfboards propelled by a sail and with a mast that the operator must hold upright.
A ship's lifeboat (a dinghy is not a lifeboat).
Vessels currently and lawfully numbered (registered) by another state that are principally used outside California.
Vessels brought into California for racing purposes only (exempted only during races and tune-ups).

What is the Difference Between a Documented Vessel and an Undocumented Vessel?
An undocumented vessel is registered by the DMV and does not have a marine certificate issued by the U.S. Coast Guard.

A documented vessel is registered and issued a marine certificate by the U.S. Coast Guard. It does not require DMV registration. Please see the previous note.

You are required to register your undocumented vessel and pay applicable fees before it is placed in California waters.

[ArmyDaveNY]

How close are you to the U.S? Is it practical, and less expensive to move the boat from California to somewhere in Washington State? If it is less expensive to keep it in Washington, is it practical to travel to Washington to use it on a regular basis?

[RobinBC]

The boat is not registered in the US but in France, I could get a new french registration in my name from offshore, and ask for a new US cruising permit in my name once back to land and then cruise back to Canada where I import the boat.

[RobinBC]

Originally Posted by RobinBC

The boat is not registered in the US but in France, I could get a new french registration in my name from offshore, and ask for a new US cruising permit in my name once back to land and then cruise back to Canada where I import the boat.

To be more clear, I am not buying the boat in the US, and I am not staying there more than a few weeks, so I dont see why I would have to pay any tax to the US...

[Montanan]

Originally Posted by RobinBC

The boat is not registered in the US but in France, I could get a new french registration in my name from offshore, and ask for a new US cruising permit in my name once back to land and then cruise back to Canada where I import the boat.

Please clarify the situation.

Where is the boat located? Where will the purchase transaction [title transfer] occur?

I may be misunderstanding the situation.

Your original post stated in part:

" I . . . looking at buying a French registered sailboat in California USA to bring back to Canada BC."

And your recent post stated: "To be more clear, I am not buying the boat in the US, and I am not staying there more than a few weeks, so I dont see why I would have to pay any tax to the US..."

So which is it, are you buying a boat located in California, or are you buying a boat elsewhere? If elsewhere, where exactly will the vessel be when the transaction is consummated.

If the boat is being sold in California then it has been defacto "imported" into the USA and import tariffs, [IF ANY], may be due depending on country of origin of the vessel [where it was manufactured]. Those USA import tariffs, if any, would be charge to the importer, that is the owner, not to you as a buyer. Determine if any import tariff is due on the vessel and be sure the owner has paid such so as to provide you with clean title and to avoid there being any unpaid US tariff liabilility associated with such vessel. Get a copy of the receipt of payment of the tariff, if any, which would be due the moment that the owner decided to sell a foreign made boat in the USA.

If you buy the boat in California then California laws apply to the in-State transaction; reference my previous post regarding such for details associated with California law.

The reason why you [and / or the owner] would have to pay taxes in the USA is because the vessel that is being purchased was brought into the USA for sale [imported, and into a State of the USA which invokes State taxation and registration issues.

To avoid the need to comply with California laws regarding registration and to pay sale / use tax on the purchase, if the boat is in California waters, you will need to clear out of the State within the proscribed time period and obtain the One-Trip Permit in lieu of immediate registration to obtain the exemption from the requirement for registration and the sale/use tax and the property taxation. A One-Trip Permit provides the vessel the ability to depart from California in the most direct continuous route to the proscribed out of state destination. The One-Trip Permit does not allow you to use the vessel for any purpose other than to make the single defined trip. Ya can't go day sail or live aboard. Ya got get promptly gone. e.g., follow the coast towards BC. Now I suspect the One-Trip Permit would allow you to dodge into some ports and anchorages to provide for safe transit to BC along the way north. You don't want to pay the California sales taxes because such tax can not be set off against the PST/GST taxes that will become due when you import your vessel into Canada being a Canadian resident. Your French citizenship does not provide waiver to Canadian taxation when being a resident of Canada. Your French citizenship does avail the ability to have your vessel flagged by France. You will need to assess whether you need to "register" your vessel when you bring it into BC waters, I suspect you will be required to register in BC because of your BC residency status. Ask BC authorities regarding such.

And assess my recommendations listed in my previous posts.

[Montanan]

As to the import tariff due on importing a foreign made vessel into the USA.

Note I believe the USA has not imposed retaliatory tariffs against Canada or the EU regarding recreational vessels. At least not yet, since Canada and the EU have imposed steep tariffs on USA made vessels, I suspect that eventually the Trump Administration will go tit for tat, on top of the Section 232 tariffs that have been imposed on steel and aluminum for "national security" purposes against the imports from our allies.

Reference Chapter 89 of the Harmonized Tariff Schedule of the US.

https://www.usitc.gov/publications/d...er/1001c89.pdf

Rates of Duty [subject to change]: Pleasure boats are generally dutiable when imported into the United States. The following duty rates apply to boats imported for recreational purposes:

-Sailboats and motorboats other than outboard motorboats: 1.5 percent

-Outboard motorboats: 1 percent

-Inflatable vessels: 2.4 percent

[Stu Jackson]

I am a US citizen, permanent resident of Canada. We sailed our boat up to BC from California in 2016. I became a PR in May 2017. When my CA State registration expired in Dec. 2017, I got a BC province license.


I had been investigating the import tax and had talked to a few folks, just put it off.


When I sailed to the US San Juans in March 2018, upon checking in by phone on return to Canada, they asked for my import tax number. I said "I was working on it." They said you have 48 hours!!!


Look, this is simple, it's on their website for goodness sake. You could probably sail all over BC without dealing with it, but once you leave and come back in, they'll know you haven't paid tax on an imported boat. The left hand does talk to the right hand.


I found comparative prices for a boat of my exact make and model and year. The lowest I could find. I brought three of those with me to the office and they picked the middle one. They also gave me grief because I didn't bring the boat, but I told them the guys on the phone said I just have to bring the paperwork with me.


12% is the tax. Last year. Hasn't changed. Nothing to do with Trump. You get to pick the value IF you've done YOUR homework.

[Stu Jackson]

PS - Before I got my BC license and still had my CA State registration I went back and forth to US San Juan Islands many times. No questions about tax when I returned to Canada.

[RobinBC]

Originally Posted by Montanan

Please clarify the situation.

Where is the boat located? Where will the purchase transaction [title transfer] occur?

I may be misunderstanding the situation.

Your original post stated in part:

" I . . . looking at buying a French registered sailboat in California USA to bring back to Canada BC."

And your recent post stated: "To be more clear, I am not buying the boat in the US, and I am not staying there more than a few weeks, so I dont see why I would have to pay any tax to the US..."

So which is it, are you buying a boat located in California, or are you buying a boat elsewhere? If elsewhere, where exactly will the vessel be when the transaction is consummated.

If the boat is being sold in California then it has been defacto "imported" into the USA and import tariffs, [IF ANY], may be due depending on country of origin of the vessel [where it was manufactured]. Those USA import tariffs, if any, would be charge to the importer, that is the owner, not to you as a buyer. Determine if any import tariff is due on the vessel and be sure the owner has paid such so as to provide you with clean title and to avoid there being any unpaid US tariff liabilility associated with such vessel. Get a copy of the receipt of payment of the tariff, if any, which would be due the moment that the owner decided to sell a foreign made boat in the USA.

If you buy the boat in California then California laws apply to the in-State transaction; reference my previous post regarding such for details associated with California law.

The reason why you [and / or the owner] would have to pay taxes in the USA is because the vessel that is being purchased was brought into the USA for sale [imported, and into a State of the USA which invokes State taxation and registration issues.

To avoid the need to comply with California laws regarding registration and to pay sale / use tax on the purchase, if the boat is in California waters, you will need to clear out of the State within the proscribed time period and obtain the One-Trip Permit in lieu of immediate registration to obtain the exemption from the requirement for registration and the sale/use tax and the property taxation. A One-Trip Permit provides the vessel the ability to depart from California in the most direct continuous route to the proscribed out of state destination. The One-Trip Permit does not allow you to use the vessel for any purpose other than to make the single defined trip. Ya can't go day sail or live aboard. Ya got get promptly gone. e.g., follow the coast towards BC. Now I suspect the One-Trip Permit would allow you to dodge into some ports and anchorages to provide for safe transit to BC along the way north. You don't want to pay the California sales taxes because such tax can not be set off against the PST/GST taxes that will become due when you import your vessel into Canada being a Canadian resident. Your French citizenship does not provide waiver to Canadian taxation when being a resident of Canada. Your French citizenship does avail the ability to have your vessel flagged by France. You will need to assess whether you need to "register" your vessel when you bring it into BC waters, I suspect you will be required to register in BC because of your BC residency status. Ask BC authorities regarding such.

And assess my recommendations listed in my previous posts.

Thanks for your help, this is actually quite complicated...
The boast was built and always been registered in France. It has never been registered in USA or Canada. The boat is currently in California.

My idea was to sail offshore with current owner to sign the papers, get a french registration in my name (which is free), and then ask a cruising permit as a Fench visitor is the US for a couple weeks and sail back to Canada where I will import and registered the boat.
Hope that makes sense?

[RobinBC]

Originally Posted by Stu Jackson

I am a US citizen, permanent resident of Canada. We sailed our boat up to BC from California in 2016. I became a PR in May 2017. When my CA State registration expired in Dec. 2017, I got a BC province license.


I had been investigating the import tax and had talked to a few folks, just put it off.


When I sailed to the US San Juans in March 2018, upon checking in by phone on return to Canada, they asked for my import tax number. I said "I was working on it." They said you have 48 hours!!!


Look, this is simple, it's on their website for goodness sake. You could probably sail all over BC without dealing with it, but once you leave and come back in, they'll know you haven't paid tax on an imported boat. The left hand does talk to the right hand.


I found comparative prices for a boat of my exact make and model and year. The lowest I could find. I brought three of those with me to the office and they picked the middle one. They also gave me grief because I didn't bring the boat, but I told them the guys on the phone said I just have to bring the paperwork with me.


12% is the tax. Last year. Hasn't changed. Nothing to do with Trump. You get to pick the value IF you've done YOUR homework.

Interesting! But difference is the boat was built and registered in France. So actually importation from France to Canada is probably different than US to Canada.

I also believe the PST will be 7%.



It says here: https://www2.gov.bc.ca/assets/gov/ta...-108-boats.pdf



If you bring a boat into BC from outside Canada, you must pay PST at the rate of 7% on the taxable value of the boat. The taxable value is the value of the boat as determined under the Excise Tax Act (Canada). The Canada Border Services Agency may collect the PST due when you bring the boat into Canada. If not, you must self-assess the PST due (see Paying PST below)

[Stu Jackson]

Originally Posted by RobinBC

Thanks for your help, this is actually quite complicated...
The boast was built and always been registered in France. It has never been registered in USA or Canada. The boat is currently in California.

My idea was to sail offshore with current owner to sign the papers, get a french registration in my name (which is free), and then ask a cruising permit as a Fench visitor is the US for a couple weeks and sail back to Canada where I will import and registered the boat.
Hope that makes sense?

All you're doing by doing the offshore deal is avoiding paying CA state sales tax.

[boatpoker]

Originally Posted by Stu Jackson

All you're doing by doing the offshore deal is avoiding paying CA state sales tax.

..... and avoiding vessel seizure. It is illegal to sell a foreign flagged vessel in the US (or most other countries).
That is why you see so many lsitings that say "Not for sale in US waters".

[Stu Jackson]

Originally Posted by RobinBC

Interesting! But difference is the boat was built and registered in France. So actually importation from France to Canada is probably different than US to Canada.

I also believe the PST will be 7%.



It says here: https://www2.gov.bc.ca/assets/gov/ta...-108-boats.pdf



If you bring a boat into BC from outside Canada, you must pay PST at the rate of 7% on the taxable value of the boat. The taxable value is the value of the boat as determined under the Excise Tax Act (Canada). The Canada Border Services Agency may collect the PST due when you bring the boat into CanadBSF715-1a. If not, you must self-assess the PST due (see Paying PST below)

March 5, 2018, CBSA Form BSF715-1 GST/HST 5% PST 7%


That's what I paid.


Importing marine pleasure craft


It may well be that having the boat built other than the US may change the rate because of a relationship with Canada and European nations. I do not know, but do remember reading something about it while I was researching last year. Since it didn't apply to me, it didn't sink in.


Good luck.

[boatpoker]

Originally Posted by Stu Jackson

March 5, 2018, CBSA Form BSF715-1 GST/HST 5% PST 7%


That's what I paid.


Importing marine pleasure craft


It may well be that having the boat built other than the US may change the rate because of a relationship with Canada and European nations. I do not know, but do remember reading something about it while I was researching last year. Since it didn't apply to me, it didn't sink in.


Good luck.

Your are correct. Importing it from the US will cause an additional 10% on top of the PST & GST due to the current tarrif squable courtesy of Mr. Trump.

Suggest completing the sale offshore and proceeding immediately to Canadian waters to avoid that extra 10%

[Uricanejack]

Originally Posted by RobinBC

Interesting... Thanks for the answers!
So just to confirm sale taxes for bringing a boat from outside Canada to BC are PST: 7% of the value of the boat, no HST because of BC?
What exatly is the value of the boat? Not the price I paid for it?


Also not sure about the duty tax, looks like CETA 2017 might have changed things to import boat from EU to Canada?


Rest also to see how to export the boat out France...
Thanks guys!

No into BC 12%

No harmonized tax but Christie Clark after pressure from car dealers. used boats and used car get an equivalent tax to the GST and PST this was never repealed when B.C. pulled out of the harmonized tax.

Where the boat is registered is irrelevant as soon as you bring it in to Canada you have to declare it and pay up.
I thought about trying to register in Alberta but never got it figured out how without being an Alberta resident.
If it’s a high enough value boat. It might be worth while but at 30 year old I doubt it’s worth the trouble.

PS before you by the boat. Get confirmation the boats owner is not liable for tax on it in the US.