Tariffs on Chinese built boats?

[BandB]

No, it was Carter. It almost destroyed the American boat and general aviation industry. As raising taxes always does.

Except Carter had been out of office for 10 years. Please people, get your facts straight.

 

[slowgoesit]

Why let mere FACTS get in the way of a provocative post?!?

 

[N4061]

I recently heard that even a used boat originally built in China and being resold in the USA may be liable for the import tax upon its sale. Anyone heard about or experienced this?

John T.

 

[Comodave]

Where did you hear that? Was it a reputable source? I don’t know for sure but I would be surprised if they could charge a tariff on a used, already imported boat.

 

[Old Sea Dog]

Just state tax in FL where we purchased our '79 GB 36. Documentation was transferred Then $10 in MD for the registration sticker.
FL is our main residence. Summer place near Chincoteague VA. Boat berthed in Crisfield MD.

 

[twistedtree]

I recently heard that even a used boat originally built in China and being resold in the USA may be liable for the import tax upon its sale. Anyone heard about or experienced this?

John T.

I don't believe so, at least not typically. Import Duty is a one time thing on initial import. The only exception that I have heard of, and I'm not convinced it's real or correct, is that if a duty-paid boat is subsequently registered in another country, then brought back into the US, it might be subject to duty again. But the more I think about it, I don't think that's correct. I know people who own duty-paid boats, but they are registered in other countries. These boat's were then sold in the US and registered in the US without issue because the Duty was already paid. One recommendation is to get and retain documentation of duty paid if you import a boat so that you are another owner can show it's been paid.

 

[Steve DAntonio]

I'm not a tax attorney, however, I am pretty certain that is true if the import duty was never paid, if the vessel was registered in Canada or under another flag for instance, and a US buyer is purchasing and not foreign flagging. It would be due on the current value of the vessel, and excluding the US materials and labor, not the entire value (true of new Chinese-built vessels as well).

So, if resold in the US and the import duty was already paid, then no additional duty is due, only if it was never paid and is being US flagged.

For all countries other than China there is a 1.5% duty coming into US, again on non-US components and labor (for the China tariff it's calculated specifically on Chinese materials and labor). So for for China built vessel imported to US it's 26.5%, again on the non-US portion/Chinese material and labor. Customs brokers can calculate these values.

If it is a USCG documented vessel it's almost always an indication of a vessel with duty paid, but not guaranteed.

On a new vessel it's typically calculated on the wholesale price, i.e. builder's cost.

The CBP-7501 (Entry Summary) is the customs document that proves duty was paid. If you are buying a new vessel, built overseas, you should absolutely ask for a copy of this, and you can provide it when selling the vessel. If you are buying a used vessel built overseas you can ask for this, however, in most cases it's not available (brokers are not nearly aware enough regarding this issue in my experience). These docs are typically provided to the importing broker/dealer.

I recently had a client who was buying a Chinese-built used vessel, it was originally imported through Canada, then purchased by an American, and the duty was never paid, so my client had a choice, pay the duty, get the seller to pay the duty, or get the seller to reduce the selling price to cover the duty. It was a negotiation.

I would verify all with an attorney who specializes in yacht (and jet) import duties.

 

[N4061]

Import Tariff Taxes

I recently had a client who was buying a Chinese-built used vessel, it was originally imported through Canada, then purchased by an American, and the duty was never paid, so my client had a choice, pay the duty, get the seller to pay the duty, or get the seller to reduce the selling price to cover the duty. It was a negotiation.

I would verify all with an attorney who specializes in yacht (and jet) import duties.

Steve, for what it's worth I agree with your understanding and was told the same thing from a very reliable broker. So, for anyone purchasing a used boat built in China after 2017 (tariff imposed in 2018) they may want to look close at this tax. I'm also not a tax attorney and no expert.

John T.
Nordhavn 4050, 4061, 3522 - previous owners
John

 

[bowball]

First, there was no additional tariff added to boats from China. The current tariff is 1.5% if imported into US.

Second, there are plenty of boats built in China, some in Taiwan, some in Malaysia. The Chinese builders sales in the US remain good although hurt some by the pandemic. Horizon, Cheoy Lee, Outer Reef are doing well as are others.

Has it really been just over a year since they last visited. I miss their comments.

 

[bowball]

I don't believe so, at least not typically. Import Duty is a one time thing on initial import. The only exception that I have heard of, and I'm not convinced it's real or correct, is that if a duty-paid boat is subsequently registered in another country, then brought back into the US, it might be subject to duty again. But the more I think about it, I don't think that's correct. I know people who own duty-paid boats, but they are registered in other countries. These boat's were then sold in the US and registered in the US without issue because the Duty was already paid. One recommendation is to get and retain documentation of duty paid if you import a boat so that you are another owner can show it's been paid.

I believe that you were correct about reimporting it and duty owed again, at least when I was researching it a few years ago. Canada is different and it only gets paid once.

 

[kthoennes]

It's funny, before I got to the point in life where I could realistically shop for a big(ger) boat, I would read BOAT magazine and noticed those notations in tiny fonts in superyacht sales listings that would say, "*Not for sale to U.S. residents while in U.S. waters." I never understood what possible arcane, green-eye-shade, regulations-gone-amok, free-market-chilling reasons there could be for such a statement. The more I swim around on this topic and browse larger boats, ah yes, now I get it.

 

[Comodave]

I recently heard that even a used boat originally built in China and being resold in the USA may be liable for the import tax upon its sale. Anyone heard about or experienced this?

John T.

This is the post that brought the old thread to life again. As the poster says the question is about a boat built in China and previously brought into the states and resold in the states is another tariff due. If the boat had tariffs paid when it was originally imported, as they should have been, and then it is resold in the states how could another tariff be due. I don’t see how that would be possible. I bought a boat built in Taiwan several years ago and I didn’t have to pay any tariffs because the original owner that bought it from Taiwan paid the tariffs. If this were the case then every time someone bought a foreign built boat they would be paying a tariff.

 

[Shrew]

I recently heard that even a used boat originally built in China and being resold in the USA may be liable for the import tax upon its sale. Anyone heard about or experienced this?

Nonsense!! There has never been a precedence for a 'look back' to impose a tariff rate increase on an import retroactively. Once it's imported, it's imported.

Please provide references or its merely conjecture.

 

[RT Firefly]

Greetings,
Mr. S. When we purchased our 1979 Cheoy Lee some 20 years ago we would have been on the hook for the import duty from 1979 IF we hadn't found a copy of duty being paid. The previous owner didn't have it and the records of the original importer (Rex Yachts) had been destroyed by fire. A GREAT registration company was able to dig it up for us. Can't remember who...