Most prospective buyers and owners of a boat are often faced with the question ‘is a Documented Vessel exempt from State jurisdiction?’. Your decision will depend on several factors, such as your boat’s size, citizenship, and usage, among others. You will need to obtain documentation for your vessel if you intend to use it for commercial purposes. On the other hand, if you loan your boat, your marine lender would require that you document it.
To become eligible for documentation, your vessel should be more than 24 inches in length and you, as the owner, must be a US citizen. Then, the ship must be built in the US to obtain a commercial endorsement. Once documented, your vessel will still have to comply with the state laws where it operates. In an individual situation, you will have to show your vessel’s document to the state law enforcement. Some states require documented ships to be registered. They must also display their state decals that prove that they complied with the state requirements.
Should You Document Your Vessel Even If It Is Not Spared From State Jurisdiction?
Coast Guard documentation offers a lot of benefits. For one, it is a conclusive method of vessel ownership. When you apply for it, you will have to submit convincing evidence that you are the rightful owner of the ship. In state titling, it is not always the case. Most of its requirements are quite relaxed. Apart from that, US Coast Guard documentation will have an abstract of title. That is, it shows a chronological history of owners of the boat. Most state jurisdictions do not provide this extensive background history.
As regards to state level taxation, a documented vessel is not always exempted. It could be true for some commercial applications but not for all recreational boats. Keep in mind that all state sales and property taxes, as well as use, will apply no matter how your ship is titled. Some states require yearly registration for documented vessels for revenue tracking purposes. Whether or not to document your vessel, it is all just a matter of personal preference. In the boating community, boat documentation is recognized as a prestigious form of titling. Your documented vessel will join the ranks of those luxury yachts that are entitled to carry the US flag.