The Difference between Federal-Titling with the USCG and State-Titling Explained
After purchasing a new boat, comes the question. Does the boat need to be federally-documented with the USCG or state-titled? What is the difference? There is often confusion surrounding these questions. Each form of titling has a specific set of criteria the vessel must meet to qualify.
USCG Documentation means the boat is titled on a national level, with the United Stated Coast Guard. The vessel must meet the following criteria:
– be at least five net tons
– owners are U.S. citizens
– have a hull number
– owners have filled out an application for documentation with the USCG
If a boat is 25′ or bigger, it generally qualifies to be documented regardless of the weight. A smaller boat like a tender or dinghy generally does not need to be documented. These will only have to be state titled.
If you are a US citizen and plan to operate the vessel in foreign waters, regardless of the size of the vessel, the boat must be documented by the USCG.
Do I still need to pay taxes if my boat is USCG documented? The answer is yes. Regardless if your vessel is documented, you must follow state laws. You pay the applicable state taxes in the state you plan on operating the vessel.
In the U.S. recreational boat owners are required to register with their state governments. Different states require their own paperwork and fees. In some states, the agency for sate-titling is the same that registers cars such as the DMV. Yet, in other states, it is a completely different agency. For example some states have the Department of Natural Resources (DNR) that handles state titling for boaters.