PHOTO: Jeff Brown
In the United States, the Tariff Act of 1930 impacts foreign-flagged yachts for sale to U.S. residents while in U.S. waters. It requires duty to be paid up front, in keeping with all products imported into the country for sale. A Florida Congressman is sponsoring a bill to change this. It’s his second attempt, in fact. If it becomes law, the duty on foreign-flagged yachts for sale stateside will be eliminated.
Rep. Brian Mast introduced H.R. 2725, a.k.a. the Marine Industries Relief Act of 2019, on May 14. Interestingly, it doesn’t just apply to megayachts. In fact, it brings together a broad category of boats and yachts, ranging from canoes to megayachts, under the definition of “used yacht.” The Marine Industries Relief Act of 2019 defines the term as a craft:
- “Sold at least once before entering the customs territory of the United States, and
- Used, by the person bringing such vessel into the customs territory of the United States, primarily for recreation or pleasure.”
“This is a jobs bill, plain and simple,” Mast says, in a press release. “We have a thriving maritime industry, and it’s absolutely critical that we do everything we can to help American businesses compete.” He points to the build and refit industries as examples. In his district, which extends from Fort Pierce to Palm Beach, Mast says more than 400 businesses employ 3,000 people. In addition, he says, the local economic impact exceeds $600 million. Furthermore, Mast argues that the duty on foreign-flagged yachts for sale makes it less likely that these yachts will use American service yards.
Where smaller craft are concerned, the Congressman says the bill makes buying more affordable for American consumers. Mast adds motorboats, sailboats, canoes, and rowboats all benefit.
Regardless, eliminating the duty on foreign-flagged yachts for sale is the bill’s cornerstone. Currently, tariff law does permit deferring duty, but with stipulations. For instance, a used “large yacht,” exceeding 79 feet LOA, can enter the United States without duty payment up front if the intention is to offer her for sale at a U.S. boat show. The yacht can defer duty if the seller posts a bond (often referred to as a boat-show bond). Importation tax therefore gets paid upon the sale.
The bill will surely sound familiar to some yacht buyers and industry representatives. It’s the same a previous bill by Mast. Indeed, Mast initially introduced the Marine Industries Relief Act of 2017. It, however, did not make it out of the House of Representatives.
The Marine Industries Relief Act of 2019 is currently in the hands of the House Ways and Means Committee.