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Offshore Delivery

What is an “offshore” delivery?
In California, a simple definition of an “offshore” delivery means that title to your new boat transfers from the seller to you the buyer, more than three (3) English nautical miles from any point in California or any of California’s Islands.
How do you structure the transaction so that title transfers offshore?

This is where it gets complicated. Generally, there must be specific language in the purchase agreement that obligates the seller to deliver the vessel to the buyer offshore. The documentation must also address insurance and mortgage issues, timing of bills of sale, agent appointments, the role of the brokers, and much more. Consult a lawyer regarding drafting documents to appropriately effectuate an offshore delivery.In fact, transferring title offshore is just the beginning. You may still be subject to California Use Tax, the “sister” or equivalent tax to California Sales Tax if you do not follow specific compliance guidelines regarding the use and location of your boat for the requisite compliance or “test” period.
I am planning to buy my boat in another state or take delivery in another country, I should be safe from California Tax right?
Wrong! Many people end up paying California Use Tax because they failed to properly structure their transaction and functionally use their boat for the requisite time period prior to entering California.

What can Offshoredelivery.net do for me?

Our Services Include:

  • review of your existing contract for the purchase of your boat
  • redraft of the contract or preparation of an addendum to the contract in order to properly transfer title offshore (this is where most taxpayers lose there case)
  • preparation of an offshore delivery affidavit to properly memorialize the transfer of ownership of the vessel outside the state of California
  • preparation of a Use Tax Return for filing with the state of California
  • preparation of an SBE information statement for use by the State Board of Equalization in administering your claim
  • providing you with a detailed list of required supporting documents to be filed with the State Board of Equalization
  • preparation of a compliance timeline calculation sheet
  • a lot of hand holding
  • talking and corresponding with the State Board of Equalization auditors on your behalf

Assuming you have performed a valid offshore delivery, (ownership of the boat actually transferred in international waters off the coast of California), and you functionally used your boat as directed by us for a specific time period, you may meet a rebuttable presumption that your vessel was not purchased for use in California by strict compliance with California Revenue and Taxation Code Section 6248.

Is this offshore delivery stuff legal?

Yes, it’s legal.