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Old 12-28-2018, 02:37 PM   #1
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Tax questions and options

Could someone respond/answer the following scenario.
I've a dual citizenship; Canada and USA and looking to split my time living in a condo southern US and on a boat Canadian side of the Great Lakes. Here is the questions/scenarios
I will purchase a used motor yacht in the US then sail it to Ontario Canada.
Where are sales taxes due? Can I chose the lesser of;
The state the vessel was purchased?
The state I reside in?
OR
The province the boat will be used/stored in?
2nd question
With using and storing the boat in Ontario, would it best (less expensive) be done as an American or Canadian?
If I register the boat from either the sate purchase or state of residence; must I register in Ontario as well?
I've been doing searches on the internet and can not get any consistent answers; believe this is done intentionally so as to create the confusion and be at the mercy of "The Taxman"!
Thanks in advance for any insight or suggestions
Wishing all favorable winds
Willcocon
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Old 12-28-2018, 04:02 PM   #2
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You should of course consult a tax attorney or two.

I kept a boat in Ontario for 2 years and didn't pay tax in any jurisdiction. The boat was USCG registered, not state registered. As required by Ontario, I left the province (and country) at least every 12 months. As a US citizen visiting, I could temporarily import the boat (as I could a suitcase) as long as it was exported again within 12 months of entry. You can return the next day or even next hour - it is then a new entry. I would run over the Youngstown for a night. New York I believe will tax residents, or those using their boat for more than 90 days in New York, up to a limit of $18,000. If not a resident, and only visiting a few days at a time, no tax.

I don't know if being a Canadian citizen changes anything - it may. My boat has a stated home port of San Francisco. California asked for tax, but they have an exemption procedure for boats purchased outside of California for use outside of California. You must apply with some documentation.
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Old 12-28-2018, 04:19 PM   #3
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You should of course consult a tax attorney or two.

I kept a boat in Ontario for 2 years and didn't pay tax in any jurisdiction. The boat was USCG registered, not state registered. As required by Ontario, I left the province (and country) at least every 12 months. As a US citizen visiting, I could temporarily import the boat (as I could a suitcase) as long as it was exported again within 12 months of entry. You can return the next day or even next hour - it is then a new entry. I would run over the Youngstown for a night. New York I believe will tax residents, or those using their boat for more than 90 days in New York, up to a limit of $18,000. If not a resident, and only visiting a few days at a time, no tax.

I don't know if being a Canadian citizen changes anything - it may. My boat has a stated home port of San Francisco. California asked for tax, but they have an exemption procedure for boats purchased outside of California for use outside of California. You must apply with some documentation.
Thanks DDW; I believe my circumstances are a little different but still you raised some insight. In my case the boat will be purchased by an American and imported to Canada (Ontario) as its permanent home. I will be travelling back to the US for 6 months; Nov through April then back to Canada for 6 months; May though Oct.
Think you gave a good bit of advice; contact a tax attorney.
BR
Willcocon
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Old 12-28-2018, 04:30 PM   #4
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Originally Posted by Willcocon View Post
Thanks DDW; I believe my circumstances are a little different but still you raised some insight. In my case the boat will be purchased by an American and imported to Canada (Ontario) as its permanent home. I will be travelling back to the US for 6 months; Nov through April then back to Canada for 6 months; May though Oct.
Think you gave a good bit of advice; contact a tax attorney.
BR
Willcocon
I am a Transport Canada Appointed Tonnage Measurer and Licensed Master.
I get involved with this stuff all the time as a tonnage measurer and delivery skipper. A Canadian citizen owning the vessel, customs duties (if built outside of NAFTA) and GST are payable on arrival in Canadian waters. Canada customs does not care about dual citizenship or if the boat is state registered or USCG documented .... they want their money on the spot from a Canadian citizen owner. Have your credit card ready.
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Old 12-28-2018, 04:52 PM   #5
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I am a Transport Canada Appointed Tonnage Measurer and Licensed Master.
I get involved with this stuff all the time as a tonnage measurer and delivery skipper. A Canadian citizen owning the vessel, customs duties (if built outside of NAFTA) and GST are payable on arrival in Canadian waters. Canada customs does not care about dual citizenship or if the boat is state registered or USCG documented .... they want their money on the spot from a Canadian citizen owner. Have your credit card ready.
Thanks for the info BoatPoker;
Kind of what I had found out but info was in many pieces. The customs duties are still an unknown as they seem very open for interpretation with the "may be" and "could be" or "possibly be" as part of the info. Prior to me placing a bid on any boat I would like black and white info regarding taxes; duties, registration fees etc. This is both Canadian and American tax/registration information.
I assume the GST is a given; no way to avoid this money grab?
Would you have an idea on duties for a boat built outside of NAFTA; note I'm are talking about boats over 25 years old.
Thanks in advance
Willcocon
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Old 12-28-2018, 05:20 PM   #6
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Outside NAFTA, 9.6% duty on top of GST.
There is a way around taxes and duty dependent on your tolerance for risk but I will not put it in writing. If you get close to moving, call me.
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Old 12-28-2018, 05:31 PM   #7
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There is an interesting story about a new Norhaven, a Canadian customer, a delivery skipper and Canadian Customs. It didn’t end well for anyone except Canadian Customs.
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Old 12-28-2018, 05:57 PM   #8
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Are there no boats for sale in Eastern Canada that meet your needs?
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Old 12-28-2018, 06:27 PM   #9
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Something you should ask a $400-dollar-an-hour attorney familiar with Canadian maritime law.
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Old 12-28-2018, 08:38 PM   #10
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One way or another, eventually the tax man will get his(her) due. Everyone I know who has tried to finagle a way around paying has eventually had to pay the piper.
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Old 12-30-2018, 12:44 PM   #11
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Originally Posted by Willcocon View Post
Thanks for the info BoatPoker;
Kind of what I had found out but info was in many pieces. The customs duties are still an unknown as they seem very open for interpretation with the "may be" and "could be" or "possibly be" as part of the info. Prior to me placing a bid on any boat I would like black and white info regarding taxes; duties, registration fees etc. This is both Canadian and American tax/registration information.
I assume the GST is a given; no way to avoid this money grab?
Would you have an idea on duties for a boat built outside of NAFTA; note I'm are talking about boats over 25 years old.
Thanks in advance
Willcocon
I'm in a similar situation, so watching this thread with interest.
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