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Old 11-12-2015, 07:25 PM   #1
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Sale of foreign Flagged Yachets

Good law? What say you?


VIDEO: Congresswoman to introduce bill allowing U.S. sales of foreign-flagged yachts | Trade Only Today
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Old 11-12-2015, 07:42 PM   #2
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Sale of foreign Flagged Yachets

There is an old (politically incorrect) joke about attempting to explain Daylight Savings Time to an old Indian Chief, the old one said,

ďOnly the white manís government would be so stupid as to cut a foot off the top of a blanket, sew it onto the bottom, and think they have a longer blanket.Ē



Same adage applies here. They are not talking about exempting from sales tax, simply 'delaying' paying until the vessel is sold. Sounds like a shell game to me.

If someone has a couple million to pay for a yacht a couple hundred grand ain't gonna break the bank.

FYBA needs to grow up and have their clients pay their bills and stop bitching.

I would have to read the fine print. I bet there is a clause that allows chartering use and passenger use in domestic trade with this exemption. That is probably the true motive behind this. As with most 'laws' the true motive is usually hidden behind a couple layers of smokescreen.
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Old 11-12-2015, 07:45 PM   #3
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I guess I don't see the big deal.

- All a US buyer has to do is close the deal while off shore. It happens all the time to not trigger state sales tax.

- I don't see how it increases US revenue in any way. The big yacht gets sold, and the proceeds go to whoever sold it, presumably benefiting their home country, not the US.

- The broker who sold the boat gets their commission just the same.

There was an obscure comment about deferred import duty until the boat is sold. If that's the case, then it benefits US buyers who subsequently want to US-flag the boat. That would normally trigger import duty, but it sounds like the duty may be deferred until the boat is then sold again. If that's the case, it sounds like another case of a special interest funded at tax payer expense. That I'm not in favor of.
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Old 11-12-2015, 07:51 PM   #4
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I think Florida caps the sales tax at $18,000. Seems to me this is a weekend bar bill on some of these rigs.
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Old 11-12-2015, 08:55 PM   #5
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I think Florida caps the sales tax at $18,000. Seems to me this is a weekend bar bill on some of these rigs.
The bill has to do with US Import Duty, not state sales tax. The whole "not for sale to US citizens while in US waters" has to do with boats that have not been imported into the US and paid Import Duty.
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Old 11-13-2015, 12:02 AM   #6
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There is no secret agenda behind this bill. It will bring more work and money into the state. Mostly in South Florida I would think.
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Old 11-13-2015, 08:12 AM   #7
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There is no secret agenda behind this bill. It will bring more work and money into the state. Mostly in South Florida I would think.

How? This is the part I don't see. Other than deferring the import duty for the buyer, how does it make any difference at all? I think "it will bring work and money into the state" is justification #1 for any special interest legislation.
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Old 11-13-2015, 09:19 AM   #8
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As I understand it, the law currently exempts the owner of a foreign-flagged vessel from paying import duty when the boat is brought into the US, if the boat is used purely for recreation and no commercial purposes. The owner has only to get a cruising permit.

However, the instant the boat is to be used for a commercial purpose, it must be imported and the duty paid. Offering the boat for sale is considered a commercial purpose, so the owner of a foreign-flagged boat, wishing to try to sell it in the US, must import it and pay the duty, even if the boat never sells.

This new law would defer paying the duty until such time as the boat actually sells, thus allowing the owner to try to sell the boat in the US without having to pay the duty first.
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Old 11-13-2015, 12:37 PM   #9
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As I understand it, the law currently exempts the owner of a foreign-flagged vessel from paying import duty when the boat is brought into the US, if the boat is used purely for recreation and no commercial purposes. The owner has only to get a cruising permit.

However, the instant the boat is to be used for a commercial purpose, it must be imported and the duty paid. Offering the boat for sale is considered a commercial purpose, so the owner of a foreign-flagged boat, wishing to try to sell it in the US, must import it and pay the duty, even if the boat never sells.

This new law would defer paying the duty until such time as the boat actually sells, thus allowing the owner to try to sell the boat in the US without having to pay the duty first.
But these boats are advertised and sold to US citizens all the time. They just take delivery off shore and no import duty is due as long as you continue to flag is off shore and visit the US on a cruising permit. If someone wants to US flag the boat, they they will have to import it and pay duty. So it seems that both with and without the new law, a US buyer who wants to foreign flag doesn't pay duty, and one who wants to US flag pays duty.

I don't see how the costs are any different, and I certainly don't see how it enhances or motivates Florida business.
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Old 11-13-2015, 02:13 PM   #10
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But these boats are advertised and sold to US citizens all the time. They just take delivery off shore and no import duty is due as long as you continue to flag is off shore and visit the US on a cruising permit. If someone wants to US flag the boat, they they will have to import it and pay duty. So it seems that both with and without the new law, a US buyer who wants to foreign flag doesn't pay duty, and one who wants to US flag pays duty.

I don't see how the costs are any different, and I certainly don't see how it enhances or motivates Florida business.
If the duty is deferred it will attract boats that are for sale here that may not come here other wise due to the duty. And while here the money spent on the boats gets spent here.
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Old 11-13-2015, 04:32 PM   #11
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I can see most of us still don't understand it completely. I would guess the money to be made would come from boat yards, surveyors mechanics etc.?
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Old 11-13-2015, 05:52 PM   #12
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Cottontop and Capt Bill stated it clearly and accurately. Today, most countries allow a boat to be held for sale and the duty not paid until the sale is made. The US does not allow that. Her proposed bill would allow that. It would bring more boats onto US soil and being offered by US brokers. It's basically saying that holding the boat for sale is not importing it.

Nothing to do with sales tax. No other magical hidden agendas. It's designed to help brokers and potential buyers.
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