Coast Guard Documentation vs. State Registration
In the U.S. vessels registered at the federal level are issued a Certificate of Documentation by the U.S. Coast Guard's National Vessel Documentation Center where they are awarded an official number. This number will never change and is required to be affixed to the interior portion of the hull. Owners are also required to choose a name and hailing port for their boats which are to be displayed on the outer structure of the vessels hull. In California, state titled vessels are assigned a California registration or CF number, which is to be marked on each side of the forward half of the vessel hull. Vessels registered with the state of California are not required to have a name or hailing port. In California, motorized recreational boats are required to be either U.S. Coast Guard documented or California state registered, but not both. Vessels used on private lakes must have a California state registration and title. Commercial vessels meeting the five net ton requirement are required to be documented with the U.S. Coast Guard.
What are the advantages to documenting a vessel? One example can be seen when cruising outside of U.S. waters. Generally, Coast Guard documented boats are able to clear customs more quickly than state registered vessels as they are protected by the U. S. flag. Another advantage is that Coast Guard documentation allows lenders to record a Preferred Mortgage on vessels they finance. This is the preferred method for lenders as it allows for their collateral to be placed on record with the U.S. Coast Guard with the recording of a Preferred Ship Mortgage. Another appealing advantage for owners of documented vessels allows the owner to defer the payment of their used sales tax from one to twelve months from the date of purchase. Where state titled boats registering with the California Department of Motor Vehicles are required to pay California used tax at the time of registration. With tax laws changing constantly you are advised to check with your CPA, tax consultant and/or the California Tax and Fee Administration for the current laws regarding California used vessel tax.
The requirements for U.S. Coast Guard documentation are simple. First, the vessel must weigh at least five net tons. Most vessels 26' or more meet this requirement. Secondly, all owners must be U.S. citizens. For those not meeting these requirements a state title would be the best option. With either of these choices Triton Marine Title is available to assist you in making make your transaction flow as smoothly and promptly as possible!