The Boater Registration Myth The HBS Blog | About LLCs

By Michael Bell Monday, July 12, 2010

In a recent article, Safe Boating: The Delaware LLC Way, we discussed the benefits of placing your boat in a Delaware LLC and registering it here in Delaware. In this article we will go deeper into the registration myth.

I recently read a very interesting article from BoatU.S. Magazine called “The Boating Myth That Won’t Die”.  With the economy still stagnating every state is revenue hungry and looking for uncollected taxes. Cruising boaters crossing state borders may find themselves in troubled waters if they linger too long in one area. The article was about a family who sailed their vessel on the eastern seaboard from Florida to Maryland. Along the way making stops in a few counties in North Carolina, when they arrived at their new home in Maryland they found mail from the state of North Carolina concluding they had personal property in North Carolina and therefore were subject to taxes in North Carolina.

I found the information below to be interesting in that typically clients will register their boat here in Delaware and cruise around the world docking in numerous parts of the world. Below is an excerpt:

A common misconception in recreational boating circles is that federal documentation of a privately owned boat by the USCG exempts the vessel from state registration, and thus taxation. This is NOT the case. In fact, most states require vessels kept in their waters for prescribed length of time, most commonly 60 to 90 days, to register and obtain a state sticker to indicate that the owner has paid the required taxes.” 

 

So the message to take from all this is make sure that if you’re cruising your vessel from place to place and are registered in another state beware of the length of time that you are stationed in each location as you could be subject to taxes.

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