Canada - USA title question

I have been searching for a Taiwan Trawler - and trying to sell my Albin 25 - for a while now. I am in Canada in the 1000 Islands. I am considering going to Trawlerfest in Baltimore and checking out an aggressively priced CHB 35 nearby at the same time.

My plan is to retire and basically live on the boat in Ontario for summers and in southern climes in winters - southern climes meaning basically the ICW and, with current reservations - Bahamas (the heart weeps!)

So one thought is to avoid the hassle of importing a US-bought vessel into Canada, but rather licence/register/whatever in USA and visit into Canada for summers (maintaining my awesome CAD health care of course).

How to go about comparing the pros and cons of this approach, and is it even possible? Calling dockside lawyers (the nautical version of jailhouse lawyers?) who might have some insight or experience in this matter?

There is no real hassle registering the boat in Canada, and you're going to be liable for duty if any and HST as soon as the boat enters Canada regardless of where it is registered. That's painless too, apart from the $$.

You are in a window of opportunity just now, as the "Trump tax" was cancelled earlier this summer, and with it went the Canadian countervailing tax. So long as nothing new is slapped on boats before you complete your purchase, as previously stated, you will be liable for the HST.
My importation 3 yrs ago of a used German car attracted no duty, and 9 yrs ago of a used Venezuelan RIB with a used Japanese outboard also attracted no duty though the internet resources seemed to say there should be a 6% duty in both cases.
That 6% would definitely apply to importation of new, directly from those countries, but was not applied to used goods coming in from the US.

You will need to understand all the possible taxes that could apply, and what triggers each. An attorney versed in the subject is your best bet. I would pay particular attention to what triggers each tax. Typical scenareos are


1) A Canadian citizen imports the boat to Canada to be kept there indefinitely. That will most certainly trigger all applicable taxes.


2) A non-Canadian citizen brings a boat to Canada as a visitor with a defined limit on how long they can stay. That will most likely NOT trigger any taxes.


Your situation is different. To not trigger taxes, you will need to have the boat there as a "visitor". But as a Candian citizen, it may not qualify under visitor rules and instead trigger import rules. In most US states, if you bring a boat into your residency state, it triggers taxes immediately. But if you bring it into a state where you are not a resident you can visit tax free for some amount of time. People try to work around this by having the boat owned by an LLC that is in a tax free state such that the "owner" of the boat is not a resident of any taxing state, and can hence visit everywhere tax free. But many states have plugged that loop hole, looking beyond the LLC's location and testing the residency of the LLC owners.

So it boils down to comparing price, condition and features as always, and hoping duty doesn't rear it ugly head. Thanks for the useful input!

Sunset said:

So it boils down to comparing price, condition and features as always, and hoping duty doesn't rear it ugly head. Thanks for the useful input!

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Personally I wouldn't "hope" on the duty/tax question. I would want a definitive answer and plan. Your taxes for imported boats (GST & PST) are pretty steep, right? Order 20-25%? That's a big impact on the purchase price.


I have seen Canadian boat priced reasonably for a Canadian buy since GST/PST are already paid, but that are priced way over market to a US buyer. And conversely I've seen US boats priced reasonably for a US buyer, but crazy expensive for a Canadian buyer once they tack on GST/PST to bring the boat to Canada. Duty, where applicable, I believe is a much smaller number - something like 1-2%. That's easier to ignore, but it's only one of many possibly applicable taxes.

I'm in the process of buying/importing a boat to Canada. It's not done yet but I read a lot about it. It's not very complicated. You just have to be prepared and have all the documents ready. Basically, if you buy a boat in the US and come back in Canada, you will pay taxes the moment you come in. In your case you'll have the pay the HST. A portion of taxes will go the federal gov and the rest to Ontario gov. Additionally, if it's an Asian made trawler, you will pay an extra 10% in taxes as they are not part of the NAFTA agreement. I think it's 9.5% to be more precise but I would have to check. US made boats are exempt of that particular import tax but you'll still have to pay the HST. Custom officers will ask to see your contract and often even call the broker who sold it to you and/or the previous owner of the boat to validate the information. I strongly suggest you don't try to screw them up as they investigate even after the transaction and they can seize your boat for fraud. And believe me, it will cost you more than the taxes to get it back. Also, you can't visit Canada with your boat. As soon as it crosses the border, you will pay taxes. There is one exception. You can register it in Canada with an "In Bound" licence and you won't have to pay taxes. That means that the boat can only be in Canada between certain dates. I don't have to precise date with me but it's around September 15th to May 15th. Usually for winter storage. The Marina where you store your boat has to have a permit for "In Bound" boats too if I recall correctly. But you have to leave Canada for the summer before that date or you'll get into trouble if they catch you. And they do check around known "In Bound" Marinas. You often see people who live close to the border take advantage of that. So we're taking about 25% taxes + 1.35 exchange rate on our poor money for an Asian trawler. You have to find a REALLY good deal for it to make sense. Or a boat that you can't easily find in Canada. That's the problem with Eastern Canada. The choice of available boats are very limited at best.

There's a also Marine Consultant firm in Montreal that can help you go through that process (Hebert & Associe) and they deal with customer pretty much everywhere around the great lakes. I called them a couple of time and they gave me advice no charge.

H?bert et Associ?s Conseillers Maritime - Home

But I'm sure there must be some in Ontario too. I suggest you register the boat with a real "Certificate of Registry" and not just a boat licence. It's the equivalent of a Documented Boat in the US. It'll make it much easier to get a boating permit in the states and other countries. I've heard of people who couldn't get a boating permit in Florida just last winter because the boat was not Registered. They had to go through an expedited registering process while in Florida and that's a lot more expensive. And for "In Bound" licenced boats, I'm not too sure but I'm guessing it may cause issues too to get a boating permit.

Happy boat hunting

twistedtree said:

Personally I wouldn't "hope" on the duty/tax question. I would want a definitive answer and plan. Your taxes for imported boats (GST & PST) are pretty steep, right? Order 20-25%? That's a big impact on the purchase price.


I have seen Canadian boat priced reasonably for a Canadian buy since GST/PST are already paid, but that are priced way over market to a US buyer. And conversely I've seen US boats priced reasonably for a US buyer, but crazy expensive for a Canadian buyer once they tack on GST/PST to bring the boat to Canada. Duty, where applicable, I believe is a much smaller number - something like 1-2%. That's easier to ignore, but it's only one of many possibly applicable taxes.

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That is not how the GST/PST (HST) apply.

Every transfer will attract sales taxes. They are, after all, sales taxes, so will apply on almost every sale. Provinces are free to levy at different rates. Alberta, for example, has no sales tax at all (though a change of government may result in a change in whether they have PST) and BC has 7%. GST is Federal, so applies across the whole country, at 5%. So the total tax in BC is 12%, in Alberta 5%, and elsewhere, according to the individual rates. But nowhere as high as your guess of 20 to 24%.
Being already paid never negates the imposition of the GST and PST again, whenever there is another sale.
Duty will apply on importation from the country of origin. In my earlier post, I noted that once in the US, that original rate of duty no longer applies, but now you get the rate of duty as between the US and Canada, which, under NAFTA, is 0%. For a few months there was a new "Trump tax" of 10% IIRC on imports into the US, and Canada imposed its own tax at the same rate on boats coming in from the US. Both of those ended in June, so we are now back to just our GST and PST.
All of these extra costs are subject to the whim of the authorities, so once you have it all figured out, if you can complete your deal before it changes, you will be money ahead.

koliver said:

That is not how the GST/PST (HST) apply.

Every transfer will attract sales taxes. They are, after all, sales taxes, so will apply on almost every sale. Provinces are free to levy at different rates. Alberta, for example, has no sales tax at all (though a change of government may result in a change in whether they have PST) and BC has 7%. GST is Federal, so applies across the whole country, at 5%. So the total tax in BC is 12%, in Alberta 5%, and elsewhere, according to the individual rates. But nowhere as high as your guess of 20 to 24%.
Being already paid never negates the imposition of the GST and PST again, whenever there is another sale.
Duty will apply on importation from the country of origin. In my earlier post, I noted that once in the US, that original rate of duty no longer applies, but now you get the rate of duty as between the US and Canada, which, under NAFTA, is 0%. For a few months there was a new "Trump tax" of 10% IIRC on imports into the US, and Canada imposed its own tax at the same rate on boats coming in from the US. Both of those ended in June, so we are now back to just our GST and PST.
All of these extra costs are subject to the whim of the authorities, so once you have it all figured out, if you can complete your deal before it changes, you will be money ahead.

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So your taxes are not like VAT, where once paid, they are not paid again? I thought they were, but stand corrected.

twistedtree said:

So your taxes are not like VAT, where once paid, they are not paid again? I thought they were, but stand corrected.

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That was the original intent with the GST - the federal tax - when it was introduced ~25 years ago. But provincial taxes historically have been sales taxes. In the interim the two got rolled together in most provinces, and the rules vary by province.

In Ontario where the OP boats, and where I live, there is a combined HST of 13% applicable to the purchase of any used boat. If you import it from outside the country the tax is collected at entry. If you buy the boat in Canada there is an obligation on the part of the purchaser to report and pay the tax since most sellers do not collect the HST.

For those who follow the rules this makes the cost difference between importing a boat from the US and purchasing locally zero, unless a) there is duty applicable because the boat was built outside North America or b) the purchaser chooses to not report the sale and pay the tax on a domestic purchase.

Jeff F said:

That was the original intent with the GST - the federal tax - when it was introduced ~25 years ago. But provincial taxes historically have been sales taxes. In the interim the two got rolled together in most provinces, and the rules vary by province.

In Ontario where the OP boats, and where I live, there is a combined HST of 13% applicable to the purchase of any used boat. If you import it from outside the country the tax is collected at entry. If you buy the boat in Canada there is an obligation on the part of the purchaser to report and pay the tax since most sellers do not collect the HST.

For those who follow the rules this makes the cost difference between importing a boat from the US and purchasing locally zero, unless a) there is duty applicable because the boat was built outside North America or b) the purchaser chooses to not report the sale and pay the tax on a domestic purchase.

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Thanks.


And this is a new(ish) rule change? I haven't heard of HST before, but I'm from down south of the boarder so only hear about this through my Canadian friends.

twistedtree said:

Thanks.


And this is a new(ish) rule change? I haven't heard of HST before, but I'm from down south of the boarder so only hear about this through my Canadian friends.

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Not new at all. HST (Harmonized Sales Tax) is just GST and PST rolled together. When that happened, they had to adopt the same rules for exemptions and both are applied to re-sales (used).
BC rolled them together for a few years, then a former Premier got out the vote to separate them again, so we have tried both ways.

koliver said:

Not new at all. HST (Harmonized Sales Tax) is just GST and PST rolled together. When that happened, they had to adopt the same rules for exemptions and both are applied to re-sales (used).
BC rolled them together for a few years, then a former Premier got out the vote to separate them again, so we have tried both ways.

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OK, I'll stop asking questions. Sounds about as convoluted as all our different state taxes, each with different rules.

Jeff F said:

In Ontario where the OP boats, and where I live, there is a combined HST of 13% applicable to the purchase of any used boat. If you import it from outside the country the tax is collected at entry.

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No exceptions for "inbound" or anything else. As a Canadian Citizen as Jeff says you will pay on entry. They will literally be on the dock expecting instant payment.