As U.S. Customs has taken a more pronounced stance lately in looking at the foreign yachts coming into the US it will be extra important to make sure your yacht is in compliance with federal laws this boat show season.
If you are a private owner with a foreign built hull looking at offering your yacht for sale in the US you want to make sure you have your proper import paperwork available to legally list your boat for sale to US citizens. With a foreign built yacht you must have an entry summary (Customs form 7501) to prove your yacht has been imported and payed the proper import duty of 1.5 % to Customs. The 7501 form is the only way to prove duty has been paid to Customs.
If you have a foreign flagged US manufactured yacht you will want to have the paperwork showing that you purchased the boat in US waters so it is not considered an exported good that needs to be re imported. If you purchased the US built yacht outside of the US you will need to file a U.S. Goods Returned entry to reimport the US good into the US for sale. The duty rate on a U.S. built yacht is 0% so it is quite a small expense to make sure your yacht is legal to be offered for sale in the US.
For yacht brokers the same applies to you. Make sure you do your due diligence on your listed yacht or potential listing for a client’s boat to ensure you are protecting the yacht from any complications that can arise from listing a boat that cannot be legally offered for sale in the U.S. to U.S. Residents.
For the larger yachts greater than 79 feet, you can purchase a boat show bond which allows the yacht to be offered for sale to American buyers free from import duties during a boat show. The yacht can continue to be shown to U.S. buyers after the boat show is over but cannot be marketed to new U.S buyers that did not come in contact with the boat at the show. These bonds are good for 6 months and when purchased for the Fort Lauderdale boat show will also still be good through the Miami and West Palm Beach Boat show. If you have clients looking to put their yachts in the Newport ,RI, show then their bonds would cover the Fort Lauderdale and Miami, FL, shows, but would be expiring before the West palm Beach show.
It is important to note that a boat show bond must be closed out before it expires or duty will be due on the yacht. There are no extensions available for boat show bonds. The way to cancel a boat show bond is by clearing the vessel out of the US to a foreign port such as the Bahamas. Or the other way to close the bond is by Paying the duty before it expires. If the bond expires and duty has been paid to Customs within 15 days of the expiration, Customs will then collect double the duty of 3% of the value of the yacht.
Just be mindful Customs is looking for revenue from these yachts so make sure you do what is necessary to protect you or your clients yacht this Boat Show season.
If you have any questions please contact us at Howard S Reeder Inc.
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