Duty free Fuel

As a U.K. Citizen, if I purchase a US registered boat and whilst the vessel is in US waters change the flag to Panamanian. Can I buy dutyfree fuel whilst in US?
And will I be allowed to keep the boat in US waters?

Thanks.

choogh said:

As a U.K. Citizen, if I purchase a US registered boat and whilst the vessel is in US waters change the flag to Panamanian. Can I buy dutyfree fuel whilst in US?
And will I be allowed to keep the boat in US waters?

Thanks.

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No to the duty free or tax free fuel. You would need a tax exempt certificate, and being from outside the USA isn't a reason for having one. I'm sure you can keep it in the USA if it was already registered here, but you most likely will be subject to registration and or tax from the state you keep it in.

Ted

There are a variety of taxes on fuel in the US, but fuel purchased for use in a boat is already free from the largest which it the road tax. Fuel that does not carry the road tax is red colored. If you get caught using it in a road vehicle there are big fines, but it is allowed for off road use including boats, construction equipment, farm equipment generators, etc.

What you will need to pay is state sales tax, and that varies state to state ranging from 0 to 10%

If you buy fuel in the US after buying it in the UK, you’ll feel like you’re getting duty free when you fill up here. Lambs Yacht Cnter in Jacksonville was $3.25/US gallon yesterday.

If you, as a non US citizen cruise US waters in a non US registered vessel you will have to do so on a cruising license and call CBP every time you move the boat. This is not nearly as easy as you would think.

When I was a commercial fisherman and operated tugs, fuel used offshore and beyond was exempt from state sales tax. You had to pay the price of the fuel and put in for a tax refund at the year end. And you couldn't claim 100% of the fuel as exempt. You had to show some fuel used going in and out. Also I had a centrifuge that would remove the red coloring.

Lepke said:

When I was a commercial fisherman and operated tugs, fuel used offshore and beyond was exempt from state sales tax. You had to pay the price of the fuel and put in for a tax refund at the year end. And you couldn't claim 100% of the fuel as exempt. You had to show some fuel used going in and out. Also I had a centrifuge that would remove the red coloring.

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A complete thread drift here but are you saying your centrifuge removed the dye during the normal fuel oil purifying as an unintended function or were you specifically looking to remove the coloring & why? Just curious.

Tax rules vary from state to state but it's cheaper buying in the US by the gallon than buying by the liter in much of the world.

States justify the tax by using the same fund for roads and waterways/parks and such. Fund accounting for fun and profit.


Centrifuge is hilarious, you are a bad, bad, boy.


Insurance savings might pay with overseas registration. Don't have a plan, just a thought.

There are really two questions here.

1) With a foreign flagged vessel as a foreign citizen, do I have to pay duty on fuel?

Duty is a concept of import. You are not importing the fuel, therefore you don't pay duty on it. You may pay is taxes.

Taxes are levied by the State. Each state collects both State and Federal taxes. Only about 60% of the Federal taxes are allocated towards roads. The other 40% go to other earmarked programs.

Some states will allow you to deduct the highway taxes from the fuel. Some states don't impose state road tax on on-water purchases for off-road vehicles). You would need to determine whether the state where you purchased fuel imposes a road tax AND will allow you to deduct the road tax portion.

NO, you are not eligible to deduct all of the taxes on the fuel as a result of the owner operator/boat foreign status.

2) How long can I remain in the US once I have a foreign flagged vessel?

You are not required to 'Title' a Foreight Flagged vessel in the US Federally (USCG Documentation) or in an individual state. You will be required to register in any state if you operate in that state for longer than that states designated time. Most states are around 30-60 days. Some states are consecutive months, some are cumulative for the year.

Look at the inidivual state requirements for registration.

When I lived in CT I saved my fuel receipts and every May (I think) I had to submit the receipts with a form to the state and I would receive a refund for the road tax.

Living in southeast Florida I know boat owners who declare to the fuel provider that they are leaving for the Bahamas so they pay no state sales tax (of course no over rode tax either). The fuel provider notes on the invoice the vessels document number but most are never checked by anyone.

Just sayin.

Bigsfish said:

Living in southeast Florida I know boat owners who declare to the fuel provider that they are leaving for the Bahamas so they pay no state sales tax (of course no over rode tax either). The fuel provider notes on the invoice the vessels document number but most are never checked by anyone.

Just sayin.

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There are several Fuel Docks in the West palm area that advertise no tax for Foreign Flagged vessels.

OG

What I was referring to are US vessels avoid the tax by saying they are traveling out of the US. Foreign vessels never had to pay the US tax.

Boats flagged in some countries cannot get a "CRUISING LICENSE" which means that they must clear with customs in each and every port they visit. To go from Fort Lauderdale to Miami a distance of 30 miles, you must clear out of Fort Lauderdale and clear into Miami.
Here is a maybe outdated list of reciprocal countries I got from the web. Boats flagged in these countries can get a CRUING LICENSE
Argentina
Australia
Austria
Bahama Islands
Belgium
Bermuda
Canada
Denmark
Finland
France
Germany, Federal Republic of
Greece
Honduras
Ireland
Italy
Jamaica
Liberia
Marshall Islands
Netherlands
New Zealand
Norway
Saint Kitts and Nevis
Saint Vincent and the Grenadines
Sweden
Switzerland
Turkey
United Kingdom and the Dependencies: the Anguilla Islands, the Isle of Man, the British Virgin Islands, the Cayman Islands, and the Turks and Caicos Islands

Panama is not on this list. It is expensive to flag a boat purchased in the US in a foreign country, and to maintain the yearly cost of registration, so it may be less expensive to pay sales /use tax in some state. Many vessels using a CRUISING LICENSE must leave the US to renew the cruising license each year, which is fine if you keep the boat near a foreign country like Canada, Mexico or Bahamas, but difficult if you are a long way from those countries.

When purchasing a US boat that will become foreign flagged the closing can be more that 3 miles offshore but less than 12 miles, and the state tax does not have to be paid, instead you pay to register in a foreign country and then get a cruising license.
There is a lot to understand about how and where the boat will be used to how it may be registered. A US documentation agent and or a customs broker may help with specific questions.