Foreign National buying a boat in the USA

[Pacuri]

Dear Members, I was wondering if you could help me on this subject. I am English, live in Argentina and have a son who is going to be living South Carolina early next year. I would like to buy a used sail boat in the USA (have whatever refit it needs done) and have it berthed for a couple of years in the US. I would be using it more or less twice a year and my son would be welcome to use it in the meantime. My question is, does any one know the legislation tax etc., and if this would be possible?
I would be very grateful for any help on this subject. I have googled my query but with not much success. Thanks.

[GordMay]

Greetings and welcome aboard the CF, Pacuri.

[GordMay]

It doesn't matter that you're a non-resident alien.

SC Boat Registration ➥ SCDNR - Boating Registration

Fees ➥ SCDNR - Boating Fees

[Dsanduril]

Generally there are no restrictions on foreign ownership of 'things' in the US. House, boat, car can all be owned by a foreign national. Guns and anchors, well

GordMay posted the regulations on boat registration and sales, but in addition SC is known as one of most expensive states in which to keep a boat because they charge an annual property tax. The tax rate is capped at the state level at 10.5% of value (so a boat valued at $100,000 could pay up to $10,500 annually in property taxes). The actual tax rate has been adjusted in some counties for some vessels when used/qualified as a primary or secondary residence, in these cases the rates can be 4% or 6%. Taxes are due if the boat spends 180 days or more in SC in any calendar year.

The South Carolina Marine Association (SCMA), a trade association representing the recreational boating businesses and boaters in our state, has been working since 2005 to adjust the tax rates on boats. Boats are considered personal property and, as such, are taxed on 10.5 percent of the boat’s value, a rate set in the S.C. Constitution. That rate is the highest on the East Coast, so we have been trying to level the playing field, especially with our neighboring states. Boats are very mobile and can easily move to Georgia or North Carolina, both of which have much lower rates.

When SCMA began these efforts, the tax situs, or time a boat had to be in the state before becoming liable for property taxes, was 180 days. It was changed to 60 consecutive days and 90 aggregate days in a tax year. When that was enacted, our members immediately felt a negative economic impact when transient boaters started cancelling reservations.

The survey to which David Coe refers was not paid for by SCMA; it was an informal survey undertaken by SCMA of our members to determine how much business and jobs had been lost since the change from 180 days.

Our state representatives have since passed legislation allowing the county councils to approve ordinances allowing boats to stay for up to 180 days in a tax year. This provision has been adopted by Beaufort, Charleston, Georgetown and Horry counties. To rescind it in Charleston County will just send the transient boats to other counties.

In addition, the Legislature approved two other local county options. Charleston, as well as Beaufort, Georgetown and Horry counties adopted an ordinance whereby boats that qualified (and the qualification is that the vessel must have sleeping quarters, a head and a galley) as first or second residences could have their taxes based on 4 percent or 6 percent of the value of the boat. Boats that qualify must apply to the county auditor every year. Beaufort, Florence and Horry counties also used the second option, adopting ordinances to exempt 42.75 percent of the fair market value of a vessel from the property tax, effectively lowering the tax base to 6 percent of the boat’s value, applicable to all boats in the county. Boats used as primary residences can still qualify for the rate of 4 percent of the boat’s value.

The specific statutes for the state and the counties can be found on our website, www.scmarine.org under “Legislation.”

Articles in The Post and Courier have focused on the larger yachts docked here. Those generally travel internationally and rarely base permanently in one spot. The yachts are run by paid crews and are moved to wherever the owner or charterer wants to cruise next.

Those few owned by S.C. residents would probably stay longer and pay taxes if the taxes were reasonable. Their impact on the local economy is immense, whether they are here for a couple of days or a couple of months, but SCMA would like to see the property taxes lowered for all S.C. boats, the bread and butter of our marine businesses. We want them to not only stay in our state but to stay in boating.

[Jman]

Originally Posted by Dsanduril

Generally there are no restrictions on foreign ownership of 'things' in the US. House, boat, car can all be owned by a foreign national. Guns and anchors, well

GordMay posted the regulations on boat registration and sales, but in addition SC is known as one of most expensive states in which to keep a boat because they charge an annual property tax. The tax rate is capped at the state level at 10.5% of value (so a boat valued at $100,000 could pay up to $10,500 annually in property taxes). The actual tax rate has been adjusted in some counties for some vessels when used/qualified as a primary or secondary residence, in these cases the rates can be 4% or 6%. Taxes are due if the boat spends 180 days or more in SC in any calendar year.

Some more dis-information, the property value is based on the 10.5% of boat value. So in your example $100,000 boat would have whatever the county's tax rate applied to $10,500. Not 10,500 in taxes. From your quoted message "are taxed on 10.5 percent of the boat’s value" does not mean taxed at 10.5%. This is still much higher than many states (many just tax by the foot, or have tables of length and age).


Sent from my iPad using Cruisers Sailing Forum

[Dsanduril]

Originally Posted by Jman

Some more dis-information, the property value is based on the 10.5% of boat value. So in your example $100,000 boat would have whatever the county's tax rate applied to $10,500. Not 10,500 in taxes. From your quoted message "are taxed on 10.5 percent of the boat’s value" does not mean taxed at 10.5%. This is still much higher than many states (many just tax by the foot, or have tables of length and age).

I admit to completely mis-understanding. And on that basis I don't see SC taxes as being quite as high as thought, since they end up in the 3-4% range. Curious how SCMA spins it. So, thanks for pointing that out. I went to the Greenville County taxes page, and this is what they had to say:

The amount of tax for a boat or boat motor is based upon the fair market value of the boat or boat motor, a 10.5% assessment ratio, and the tax millage rate applicable to the owner of record’s address.

Example: The annual tax on a boat with a fair market value of $10,000 whose owner resides in a tax district with a tax millage rate of 344 mills would be calculated as follows: $10,000 x 10.5% x .344 = $361.20

State law provides for a reduction in the assessment ratio used to calculate boat taxes if the boat qualifies as a second residence (sleeping, cooking, toilet facilities, etc). If your boat qualifies for this reduction in the assessment ratio to 6%, you must annually apply by submitting a Residential Status Affidavit form to the Greenville County Auditor’s Office. (Some boats may not qualify, please contact the Auditor Office for questions.)

Very strange to me that the tax is some percentage (based on county millage rate) of 52.75% of 10.5% of the boat's value, but hey, that's the way it is. Not intending to spread disinformation, just misunderstanding what I read. In my example tax ends up somewhere between $1376 and $3612 in Greenville county depending on status as a residence.

https://www.greenvillecounty.org/Cou...itor/boats.asp

[Pacuri]

Thanks very much for your replies. I will look into the possibility of keeping the boat in a different state or at least compare costs when I eventually get round to buying.
Anyone dare to recommend a good broker in the area? Thanks again for the input.