IYBA urges Congress to end foreign-flagged yacht sales restrictionsPosted on Written by Reagan Haynes
The International Yacht Brokers Association is hosting a media event today with U.S. Rep. Lois Frankel, D-Fla., to reintroduce a bill to alter a 109-year-old law that prevents sales of foreign-flagged yachts to U.S. citizens while the boats are in U.S. waters.
“It’s garnering more support all the time, but several representatives who were sponsors last year weren’t re-elected,” IYBA executive director Cindy Sailor told Trade Only Today. “This is the 115th Congress. Lois is our main sponsor, and has reintroduced the bill to the new Congress.”
The bill, now introduced as H.R. 2369, seeks to change a law from 1908, which requires foreign-flagged boats to pay an import fee prior to being offered for sale to US residents while in US waters. The bill would not remove the tax paid on the boat, but would defer payment of it until after the boat is sold.
“We’re not asking to get any sort of forgiveness for paying the duty. We are requesting that the time of collection of the duty be changed to when the yacht is sold, rather than when it goes on the market,” Sailor said.
As it stands now, the tax is paid on the estimated value of the boat rather than the actual selling price of the boat.
“It’s counterintuitive to pay the import tax on the value of a boat before you know what the actual selling price is going to be.” Sailor said. “A 1.5 percent tax is sizable and most yacht owners don’t want to pay duty just to put the boat on the market with the hopes of selling it to a US buyer.”
That means lost sales in the United States, which the IYBA says translates to lost jobs and revenue.
“Within the first year of a boat owner buying a boat, a new owner usually spends about 13 percent of the value of the boat on refit, service work, new paint, or a new interior.” Sailor said. After the first year the percentage drops to around 10 percent of the value of the boat for maintenance, crew and upkeep.”
If foreign-flagged boats are discouraged from coming to the United States for sale, that revenue will wind up in other more accommodatingports, the IYBA says. “If a Canadian wants to buy a boat here, no problem. But if an American wants to buy the boat, they cannot.”
Two groups will be heading to the American Boating Congress next week to garner support from Congress, Sailor said. “There will be sevenin our delegation from IYBA, plus three from the California Yacht Brokers’ Association. We’ll be visiting with representatives and senators, burning up shoe leather while in DC to discuss what deferred importation means for US jobs and our economy.”
“Studies show that implementation of deferred importation would generate thousands of industry-related jobs and encourage $2.46 billion in additional U.S. recreational marine sales and economic activity,” Staley Weidman, chairman of IYBA’s legislative affairs committee, said in a statement. “It’s time to remove this onerous restriction, which prevents job creation and discriminates against U.S. residents while in their own country.”
This article was updated at 3 p.m. on May 12 and 8:30 a.m. on May 15.