Recreational boat owners in the U.S. are required to register their vessels with their respective state governments. I won’t get into each state’s myriad requirements for registration, since some have two year registration, some three, and they all have different agencies responsible for management. Here’s a link to your particular state’s rules for boat registration. That saves me enough space to outline some of the basics of federal documentation.
Any vessel of five net tons or more, and that is wholly owned by a U.S. citizen, can be documented. Net tonnage is a measure of a vessel’s cargo carrying volume. It should not be confused with the vessel’s weight, which may also be expressed in tons. Most vessels more than 25 feet in length will have a cargo volume of five net tons or more.
Documenting vessels started as a way for the federal government to manage commercial shipping and its resultant taxes on merchant cargoes. Today the U.S. Coast Guard is in charge of documentation, and there are multiple types of vessels that can be documented, including recreational vessels. Any documented vessel may be used for recreational purposes, regardless of its endorsement, but a vessel documented with a recreational endorsement only may not be used for any other purpose. If you want to run a commercial fishing charter business on your boat, you will have to document your vessel with a fishing designation even if you use it at other times for pleasure.
Documented vessels are given unique official numbers similar to state registration numbers. However, documented vessels do not display their official numbers on the outside of the hull; they are identified by the name and hailing port. The official number is placed inside. The application for documentation must include a name for the vessel, which may not exceed 33 characters. The name may not be identical, actually or phonetically, to any word or words used to solicit assistance at sea; may not contain or be phonetically identical to obscene, indecent, or profane language, or to racial or ethnic epithets. Once established, a vessel’s name may not be changed without application, fees, and the consent of the Director, National Vessel Documentation Center. There is no rule against duplication of names for documented vessels, so hailing ports are helpful in identifying vessels.
So why would you want to document your boat?
- If you travel to foreign waters, the Certificate of Documentation facilitates clearance with foreign governments and provides certain protection by the U.S. flag.
- It may be easier to get a bank loan to finance your vessel if it is documented. The bank is interested in recording a “First Preferred Ships Mortgage” to perfect their lien. This document is enforceable throughout the U.S., its territories, and some foreign countries.
- There may be some tax savings. Check with your state concerning preferred tax status for documented vessels.
- It is much easier to track stolen vessels across state lines with the federally documented “chain of ownership.”
- Most states allow boats registered in other states to “visit” their waters for a period of up to 60 days without obtaining registration in the visited state, but after that you’ll have to apply to the state you’re visiting.
- BoatUS and other agencies can help with documentation. Your broker may also help facilitate documentation or the transfer of documentation to the new owner. However, doing this by yourself is no more difficult than state registration.
- Once documented, it stays documented for the life of the vessel. This means that if you sell the vessel the new owner simply needs to update the documentation information (along with a fee). The vessel’s documentation ID number, which needs to be affixed to the interior, stays the same. There is an annual documentation update form required by the Coast Guard, but this is automatically sent out to you 45 days in advance of annual expiration, and there are no further fees involved.
Federal documentation adds those advantages, but doesn’t mean exemption from state registration and taxation.
If you sell a documented vessel, return the current Certificate of Documentation to the National Vessel Documentation Center along with a note that you sold the vessel. Your existing Certificate is nontransferable and should NOT be given to the new owner. Complete a US Coast Guard Bill of Sale (CG-1340) that can be used by the new owner should he wish to continue to document the vessel. The new owner then sends in one signed original and one copy of the USCG Bill of Sale with an Application for Document (CG-1258) and fees. Since documentation also tracks liens and mortgages, the lender completes a Satisfaction of Mortgage form and mails an original and one copy to the National Vessel Documentation Center. Your vessel cannot be removed from documentation with an outstanding mortgage. One final note: Notify NVDC of any change of address.
For more information on documenting your boat contact the National Vessel Documentation Center.