Coast Guard Documentation
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          Coast Guard vessel documentation and state level boat registration information, articles, and other items of special interest for boat owners and sellers. This page also serves as a gateway to our complete selection of owner services, vessel forms, boating databases, and ownership guides.

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  General Information 

▪  Am I responsible for sales tax as a seller?
▪  Can I allow my documentation to expire?
▪  Can I have a state title with Coast Guard documentation?

▪  Should I participate in a paper trade?
▪  Where can I find marine, boat, or vessel escrow services?

Please submit an advisory request if your question is not listed above.

          Am I responsible for sales tax as a seller?  -  As the seller, you are not generally responsible for paying taxes related to the sale of your boat. A buyer is typically responsible for any applicable sales, use, or excise taxes. However, you may be required to collect and report sales tax from the buyer if you are a business entity. Be sure to check with the respective revenue collection agency for the state in which the sale will occur to confirm this information.

          ◄ Back  /  Resources ►      Vessel Registration  Summary

          Can I allow my documentation to expire?  -  If your coast guard documentation expires and there are no outstanding mortgages, it will simply become deleted from active status. Accordingly, you could no longer operate under the certificate of documentation. In allowing it to expire however,  you may violate the terms of a loan agreement where you have granted a preferred vessel mortgage. In any event, it is a good practice to submit a request for removal from documentation if you no longer elect to maintain the document. If you subsequently wish to reactivate the documentation, it will be necessary to apply for a re-documentation.

         ◄ Back   /  Resources ►     Request for Removal Form     Documentation Reinstatement Service

          Can I have a state title with Coast Guard documentation?  -  Federal regulations allow the states to issue registration certificates on boats, but not titles. However, state and federal agencies do not share or cross reference such information. Accordingly, many boats end up with both where the owners are not aware of these regulations. Owners with both should immediately surrender one or the other depending on how they wish for the boat to remain titled.

         ◄ Back   /  Resources ►     Documentation & Title Services

            Should I participate in a paper trade?  -  Many states allow a reduction in sales or use tax on a vessel purchase for the value of a trade vessel. This has created a tendency among buyers to request passage of title to their existing vessel through the seller and then on to a third party. In a paper trade situation, the buyer maintains control and possession of the trade pending delivery to the third party. As the seller,  you should should be concerned the implications of stepping into the chain of ownership, even if only from a technical perspective. Having become the seller of the trade,  you could become liable for product or title warranties. This may also create tax obligations depending on the jurisdiction and values of exchange. It may be worthwhile to consult with an attorney or tax expert before making such a commitment.

          ◄ Back   /  Resources ►     Marine Attorney Listings

            Where can I find marine, boat, or vessel escrow services?  -  In the marine industry, you are not likely to find the equivalent of typical real estate escrow services. Boat or vessel escrows are for the most part handled by yacht brokers, commercial lenders, a few documentation companies, and the occasional attorney who is willing to become involved in such transactions. Other than attorneys and commercial lenders, there is very little by way of bonding, accountability, and governmental oversight with respect to the way marine escrows are handled. Brokers are regulated in some states, but documentation companies are usually not subject to any such constraints. You should accordingly conduct a great deal of investigation before handing large sums of purchase funds over to an independent marine escrow agent.

          ◄ Back   /  Resources ►     Marine Attorney Listings

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Charter & Timeshare Programs

          Time share and bareboat charter programs remain quite popular with vessel owners, even though some of the earlier IRS tax advantages have vanished. A well managed program can not only help defray the financial burden of ownership, but also qualify the vessel for state level tax reductions in certain jurisdictions. Unfortunately, these advantages are balanced by the fact that you may end up sharing your vessel with some unsavory individuals. In some states, you must also turn over management of the vessel to an independent third party for tax purposes.
          With regard to vessel titling and registration, there are some additional factors to consider. The Coast Guard classifies bareboat charter and timeshare operations as recreational usage, therefore, documentation is not required. However, it is required were the owner or owner's representative will be skippering or operating the vessel. Documentation is also necessary in certain states before the vessel can become eligible for tax relief. In any event, most owners who place vessels into these programs will opt for documentation in order to strengthen the title.

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Reporting The Sale

         The "report of sale" is an important item often overlooked by vessel owners during the commotion of finalizing a sales transaction. Almost all state and federal titling agencies require some type of written notification when a vessel is transferred, stolen, abandoned, or destroyed. Most jurisdictions require the seller to file a "report of sale" form within 10 to 15 days. If the vessel is documented with the U.S. Coast Guard, the owner must notify the National Vessel Documentation Center by filing a written request for removal from documentation.
          A prudent seller should ensure these steps are taken even when relying on a broker or some other party to handle the transfer.  Failure to report the sale could not only involve penalties, but the state or federal agency will presume the seller still owns the vessel until it is re-titled by the new owner. A new owner may refrain from recording the transfer of ownership for certain reasons, or may pass on the ownership without ever recording the interim ownership at all. This could prove troublesome if the vessel is subsequently involved in some type of entanglement. The burden would then be upon the owner of record to disclaim ownership.

Resources ►     Remove From Documentation Kit     Report of Sale Form     Boat Registration Summary

Sale by Owner

           There are many good reasons for enlisting the services of a yacht broker, especially for sellers who lack the time or inclination to undertake such effort on their own. However, the "for sale by owner" option is becoming ever more popular due to the advent of online shopping via the internet. In fact, most vessel transactions now originate from web listings which are posted by both brokers and private sellers alike. This has resulted in an enormous market place for vessel owners who wish to advertise and sell directly to the boating public.
          Internet service providers can be located by simply entering the search terms "boats for sale by owner" or "yachts for sale by owner" in your favorite web browser. You will find numerous high quality sites which are dedicated solely to private sellers. The listing fees are quite reasonable and most web pages include additional guidelines to assist in your endeavor. We also provide a listing of such companies on our Directory page.
          Our web site provides numerous services, forms, databases, guidelines, record search tools, and other valuable resources which are designed specifically for seller to buyer transactions. You can save hundreds of dollars in titling, closing, and brokerage fees by utilizing our complete array of easy to use self-service kits and individual forms which can be found on our Services page and Forms page.

Vessel Descriptions

           The importance of an accurate and complete vessel description can not be understated with respect ownership documents such as titles, registrations, and loan security documents. The crucial link between the vessel itself and its "ships papers" becomes paramount in the event of a legal dispute or a boarding inspection. The manner in which vessels can be represented are, however, varied and can be subject to interpretations.
           Take for instance vessel hull identification numbers. The Coast Guard considers its self-assigned official number as the vessels primary identifier, whereas state titling agencies are more interested in the manufacturers hull identification number. In fact, the Coast Guard has shown only a recent interest in reconciling such numbers within its own database. In addition, vessels built prior to 1972 and those which are not initially built for U.S. consumption may only have three or four digit hull numbers, which are something less than unique.
          With physical descriptions, we again have some variations of interpretation between the Coast Guard and state titling agencies. In regard to year designations, the Coast Guard focuses solely on the year in which the vessels construction was completed. State titling agencies are more often interested in the factory designated model year which is often different. The Coast Guard is also more concerned about precise length measurements than model length designations as set forth by the builder.
          It is a good idea to become familiar with all of your vessel identification numbers and specifications. If these do not coincide any title and registration documents, the appropriate corrections should be implemented.

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