Tax Avoidance

[Cheechako]

I attempted to register a boat in WA state 3 years ago. The boat was not in Washington, nor would it ever be.... they refused to let me register it in WA.

[Kettlewell]

If you don't plan on leaving the USA and Canada, with maybe a trip to the Bahamas or two, you really don't need CG documentation on your boat, and state registration tends to be pretty easy and straightforward. Pick some state where it's cheap and easy, go there and do it in person, and you're good to go. Theoretically, you're supposed to register your boat in the state where you use it the most, but if you are traveling all the time I doubt it would be a problem. A lot of fulltime RVers use mailing services in either South Dakota, Texas, or Florida as their official residence address, and then register their cars, RVs, drivers licenses, and whatever using those addresses, even if they don't plan on spending much time there. A lot of the RV folks report saving a bundle of money and hassle doing that.

Florida requires your boat to have a state registration anyway, even if it is documented, so state registration is really a lot less hassle for many folks.

[denverd0n]

Originally Posted by Kettlewell

Documentation is a funny thing in that you can choose any place you want to in the entire USA for the homeport...

In fact, it gets even stranger. The USCG doesn't care if you INVENT a place as your homeport!

I was born and raised in Nebraska. Whenever I'm talking about someplace way out in the sticks, far from civilization, I talk about "Podunk, Nebraska." No such town exists, but if I wanted to use that as the homeport for my documented boat, the Coast Guard would be just fine with it.

It just has to sound like it's in the United States. I could make up the name of a town in Puerto Rico, the USVI, Guam, whatever, and that would be okay. If I wanted my homeport to be Madrid, Spain, though, that would be a no-go. Can't have the homeport of a USCG documented boat be in a foreign country.

[hellosailor]

Don-
" Can't have the homeport of a USCG documented boat be in a foreign country. "
Just send 'em a letter informing the foreigners that they have been annexed. Saves all the noisy burning and fighting part, and the looting has to be done by folks in suits wearing white shirts.

I'm reasonably sure that Podunk comes from Al Capp or another cartoonist (humorist?) since, as everyone knows, West Podunk is the really small town just down the road from it.

[Kettlewell]

Nope, the hailing port has to be a real place. From CFR 67.119:

(b) The hailing port must be a place in the United States included in the U.S. Department of Commerce's Federal Information Processing Standards Publication 55DC.
(c) The hailing port must include the State, territory, or possession in which it is located.
(d) The Director, National Vessel Documentation Center has final authority to settle disputes as to the propriety of the hailing port designated.

[MarkSF]

Originally Posted by denverd0n

In fact, it gets even stranger. The USCG doesn't care if you INVENT a place as your homeport!

I was born and raised in Nebraska. Whenever I'm talking about someplace way out in the sticks, far from civilization, I talk about "Podunk, Nebraska." No such town exists, but if I wanted to use that as the homeport for my documented boat, the Coast Guard would be just fine with it.

It just has to sound like it's in the United States. I could make up the name of a town in Puerto Rico, the USVI, Guam, whatever, and that would be okay. If I wanted my homeport to be Madrid, Spain, though, that would be a no-go. Can't have the homeport of a USCG documented boat be in a foreign country.

The spirit of the law is quite clear to me : the hailing port on the boat should be....wait for it..... the port that it hails from.

[denverd0n]

Originally Posted by Kettlewell

Nope, the hailing port has to be a real place. From CFR 67.119:
(b) The hailing port must be a place in the United States included in the U.S. Department of Commerce's Federal Information Processing Standards Publication 55DC.

Okay, that's interesting. Are you sure that's current information? I'll have to do a little research on this, I guess, because I was told that they didn't care if it was a real place by an officer in the St. Petersburg sector about 8 months ago. Now, of course, it's possible that he didn't really know what he was talking about, but it's his word that I was going on.

[David_Old_Jersey]

Probably it means they don't check and won't care - until something happens that makes them need to check and care. and then they shoot you.

[denverd0n]

Curioser and curioser. The most current Coast Guard regulations do, in fact, refer to U.S. Department of Commerce’s Federal Information Processing Standards Publication 55DC.

Try to look that up, though, and all you will find is an index document, last updated in 1994. That document says you can order FIPS Publication 55DC-5, which is supposed to contain the details. Except that you CAN'T order any such document, because it no longer exists. In fact, the FIPS website specifically says that this publication was withdrawn in 2005.

So it would seem that the Coast Guard has not kept in contact with the Dept. of Commerce, and doesn't realize that it is now referencing a non-existent document. Maybe that's why the local Coast Guard guy that I talked to told me that it didn't matter, and you could even make up a hailing port if you wanted to.

Ain't bureaucracy grand!

[Cheechako]

Originally Posted by Kettlewell

Nope, the hailing port has to be a real place. From CFR 67.119:

(b) The hailing port must be a place in the United States included in the U.S. Department of Commerce's Federal Information Processing Standards Publication 55DC.
(c) The hailing port must include the State, territory, or possession in which it is located.
(d) The Director, National Vessel Documentation Center has final authority to settle disputes as to the propriety of the hailing port designated.

"real place" has a number of meanings i suppose. my last documerntd boat was documented at Skagit City, WA. it no longer exists as a populated place, except on some maps, although it once did when commerce flowed in the river.... if you lived in texas, you could probbly choose "The Alamo"

[Kettlewell]

It's probably one of those things they don't check very carefully, but it is the law. Myself, I like to follow the letter of the law on silly little things like this as much as possible in order not to give someone having a bad day an excuse to ticket me or cause a hassle. It's just as easy (and fun too) to come up with a real place name by using the Geographic Names Information System to make sure it is on an official list.

Somebody said that a hailing port should reflect where the boat is from, but I have found it is often more useful to have it match your address on the Document--less confusing for foreign officials who may be looking for some problem with your papers.

[jeremiason]

Originally Posted by denverd0n

Okay, that's interesting. Are you sure that's current information? I'll have to do a little research on this, I guess, because I was told that they didn't care if it was a real place by an officer in the St. Petersburg sector about 8 months ago. Now, of course, it's possible that he didn't really know what he was talking about, but it's his word that I was going on.

Hailing Ports always cause a great debate....

When I was sailing in San Francisco, there was a boat named a"Great Escape", with a hailing Port of "Alcatraz Island, CA". Obviously, no one lives there now, but it is a Geographical LocatIon and a legal Hailing Port.

What is not legal, is making up a fictitious location. The USCG Documentation Center will reject your documentation request, if you do.

Someone also mention the Spirit of the Hailing Port being the port which the vessel sails from... Yes and no

The Hailing Port also helps with telling the difference between a sailboat named Blow Hard from San Francisco and a sailboat named Blow Hard from Los Angeles,especially when those two boats are in the same area talking on the VHF radio. They will add their Hailing Port to there name. I.e.: "this is SV Blow Hard - San Francisco".

In some countries they do not allow two boats to carry the same name. Owners wanting a specific name, have to add numbers or letters to the name to make it individual, like "Blow Hard 4".

In the US, the USCG Vessel Documentation Center is responsible for vessel documentation and has a great web site with a FAQ page that will answer almost all you questions. They also do mind talking to you on the telephone.

[Kettlewell]

One trick in some states is to choose a town that isn't likely to be very sophisticated about large boats. For example, Boston is rather notorious for protracted fights with people about paying the local excise tax even if the boat isn't kept in Boston, so that isn't a good place to choose in Massachusetts unless you enjoy trying to prove to the tax collector a negative--you don't keep your boat there. Choose a tiny town somewhere in the Berkshires maybe and chances are they might not bother to try and charge boat excise taxes based solely on your hailing port or address. In Mass. it is supposed to be where you keep your boat that gets the excise tax.

[OnTour]

Originally Posted by Kettlewell

That isn't true in every case. Documentation is a funny thing in that you can choose any place you want to in the entire USA for the homeport, irregardless of where you live, the address you use for the documentation paperwork, or where you actually keep the boat. For example, I could buy a boat in RI with no sales tax, put Seattle down as my hailing port, and use my New York address for the paperwork. Perfectly legal and done all the time.

Another oddity is that states treat sales and use tax very differently, and I am not familiar with how Washington State does it. But, I do know there are quite a few states here in the East that exempt you from either sales or use tax if you purchase the boat out of state while a resident of some other state. For example, if you are a resident outside of Florida, buy a boat somewhere outside of the Florida, and then don't bring it into Florida for six months the sales or use tax would not be due if a few years down the road you decided to keep it in Florida. On the other hand, Maryland wants either the sales or use tax when you move there, with an allowance made for taxes paid elsewhere, no matter how long you owned the boat. You really have to check into the specific laws in the specific states you wish to go to, and don't trust any of us here on the Internet to get it right.

If I live in Florida and purchase a boat in a state with no sales tax, keep it there for 6 months, and then bring it to Florida, will I have to pay sales tax when I register it in Florida?

[Kettlewell]

I'm pretty sure use tax (same rate as sales tax) will still be due if you were a Florida resident at the time of purchase, even if you keep it out of the state for six months. I would have to do more research to be sure on this, but here is one Florida publication on the sales/use tax thing. Here is another article on this subject.