The Florida Yacht Brokers Association (FYBA) hopes to change the process by American customers can purchase foreign flagged boats by lobbying to remove restrictions in the cruising license. Cruising licenses, valid for one year are available at the first port of arrival in the United States, exempting pleasure boats from certain countries from undergoing formal entry and clearance procedures. Cruising licenses, however, prohibit offering these vessels for sale to U.S. residents while in American waters unless the boat is imported and duty is paid on the appraised value. The restriction does not apply to foreign citizens interested in purchasing such boats.
A less restrictive cruising license, according to FYBA, would benefit the American marine industry and generate additional tax revenue by easing selling restrictions. The association has also recommended that importation and a duty payment for used foreign flagged boats be collected on the day sold, not on the day offered for sale.
Jeff Erdmann, FYBA spokesman, indicated that current legislation discourages foreign-flagged yachts from coming to American waters as many owners re reluctant to bring their boats to the United States if they are required to pay the tax before the boat is sold.
Not only does current legislation discourage boats from coming to the United States, but it also puts off Americans from buying those very same boats. What happens in these circumstances is that American buyers have to somehow convince the foreign owner that they are viable prospective purchasers and to have the boat transitioned to nearby waters such as the Bahamas so that it may be viewed. This results in an incredible amount of uncertainty for the seller.
The current law also provides difficulty for brokers representing foreign clients because if the vessel is indeed offered to American residents while in U.S. waters, it can be seized as the act would be in violation of the law.
FYBA has delivered the proposal to the U.S. Congress where it is currently being vetted. Erdmann indicated that the association expects once seated, the new Congress will want to pass some good trade bills. With Mitch McConnell as the new Senate majority leader, FYBA anticipates that the Senate will want to pass legislation to improve its image with American voters. If the process progresses as anticipated, a favorable yacht trading bill with the FYBA initiative may be in place in the first half of 2016.
4Yacht, Inc is a long standing member of FYBA
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