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Hi Ron,

I recently answered a similar question about a boat "not being for sale to U.S. citizens while in U.S. waters." Look up that answer as part of it pertains to your situation as well. Also, I invoke the same disclaimer for that answer, that I am not a lawyer and I am not providing legal advise.

That said, here's your answer. Get a good broker to represent you in the purchase. Take delivery of the yacht off-shore, that way you avoid sales tax all together. You will have to pay U.S. Duty when you bring it back into U.S. waters, but this is much less than the sales tax. Personally, I would document the yacht in Delaware as it is a "duty free" state. This is done all the time and your broker can guide you down this simple path. I would also talk to Atlantic Documentation in Annapolis, MD as they specialize in this sort of thing and can handle the entire process for you.

Now regarding California. You said the boat won't be in California waters, at least for a while. However, being a California resident, the state will attempt to collect personal property tax and that is why it is important that you document monthly expenditures such as dockage, fuel, repair bills that will prove the boat was not in California waters. As far as sales tax goes, the sale didn't take place in California, the boat isn't in California and therefore California isn't entitled to sales tax. Again you may be asked to prove that and that is why I would work with Atlantic Documentation.

Check with your broker, but I believe if you have owned the boat for more than one year, you can then legally bring the yacht into California waters without paying sales tax; it might be eighteen months now. Again you will need documentation of the ownership period. But if you eventually do bring the boat to California waters and keep it there, then ultimately you will end up paying personal property tax.

Get yourself a good broker, talk to Atlantic Documentation and it will all go smoothly.

Hope this helps,

Captain Bob Wellen