FOREIGN-FLAGGED SUPERYACHT SALES RESTRICTIONS IN U.S. WATERS TO EASE?

A bipartisan bill introduced to the U.S. Congress today aims to change federal laws restricting foreign-flagged yacht sales to U.S. citizens while in U.S. waters.


The bill,  H.R.4065, was created by Lois Frankel, a Florida Congresswoman. It’s co-sponsored by Ted Yoho, who also represents Florida. Frankel is a Democrat, while Yoho is a Republican.


The current federal law dates back more than 80 years. Under it, import duty on a foreign-flagged yacht marketed for sale in American waters is due upon arrival.


Furthermore, the duty is based on the appraised value. Because the tax must be paid before any transaction takes place, it discourages owners from offering their yachts for sale here. Witness the dozens of “not for sale to U.S. residents while in U.S. waters” lines in any number of brokerage listings. By comparison, in Europe, import duty on American-flagged yachts when sold to European citizens is paid upon the closing. And, it’s paid on the selling price. Frankel’s bill would bring American policy in line with that of the European Union.


(On a related note, it’s important to underscore the selling of foreign-flagged yachts stateside to Americans, vs. non-Americans. If a foreign national buys the foreign-flagged yacht in U.S. waters, the duty is refundable. The same thing holds true if the yacht fails to sell while stateside.)


Frankel initially revealed plans for the bill earlier this month. She did so at a press conference hosted by the Florida Yacht Brokers Association (FYBA) during the Fort Lauderdale show. Following the press conference, Frankel posted the following on her Congressional Facebook page: “There’s no better setting to announce a bill I’m introducing that would bolster our region’s already vibrant $11-billion marine industry than the Fort Lauderdale International Boat Show. My solution would immediately bring an economic impact of $2.4 billion to South Florida. Thanks, Florida Yacht Brokers Association for your support!”


FYBA issued a statement as well. “FYBA for several years has led the push to remove this restriction, which would create jobs, stimulate the economy, and increase tax revenues at both the federal and state level,” says Cindy Sailor, the organization’s executive director. “Ms. Frankel has been a tireless supporter of this effort, which is also backed by many of our industry’s leading companies and organizations.”


FYBA estimates that 300 to 400 brokerage yachts on the market are impacted by the current U.S. policy. The organization additionally estimates their value to exceed $2 billion.

Frankel, long supportive of the marine industry, introduced the bill because “yachts are job creators” and she considers the law “outdated.”

You can track the bill as it makes is way through Congress on Congress’ website.