When going into the purchase of a vessel, we are commonly asked whether or not you should Document with the U.S. Coast Guard. In some situations the decision is based off of the preferences of the buyer, but in other situations it is required to proceed with the purchase. Here are some of the top reasons that people decide to Document their vessels:
1) You plan to use your boat in international waters.
If a boat will be used in international waters, the owner should absolutely obtain USCG Documentation for their vessel. Documentation offers a further protection from the United States to vessels as they move through international waters. State titling verses USCG Documentation for a vessel is like comparing a driver’s license to the passport.
2) You do not want to display State Registration numbers.
One of the most common reason Documentation is appealing to owners is that they do not need to display the state registration numbers on the vessel if the boat is Documented with the US Coast Guard. This reason is purely for aesthetics, but many owners prefer the clean look of their vessel without the block letter displaying registration information.
3) You financed your purchase and it is required by the bank.
Oftentimes, lenders will require Documentation when providing a loan for a boat. For more information on these situations, please see the “When is Documentation required for a vessel?” section below.
What is Documentation?
Documentation is a form of registration through the US Coast Guard. This is a title for the vessel on the national (federal) level, as opposed to state titling. The Coast Guard’s National Vessel Documentation Center grants Certificates of Documentation to eligible vessels.
When is Documentation required for a vessel?
USCG Documentation is an option for eligible vessels and owners (please see below for more info on eligibility); however, there are certain circumstances when Documentation may be a requirement. Most often, if an owner is financing a portion of their purchase of a vessel, the bank will require USCG Documentation as a way to secure their lien at the federal level.
What boats are eligible to be Documented?
Vessels must measure at least five net tons and be owned by US Citizens in order to apply for Documentation. This generally equates to vessels that are about 35 feet or longer, but it truly depends on the tonnage of the vessel. It is also important to note that Documentation is only offered to owners who are US Citizens.
When can a vessel apply for Documentation?
An owner of a vessel eligible can apply for Documentation at any time they are the owner of the vessel. While most individuals choose to Document the boat right after they purchase a vessel for convenience, an owner can Document the vessel at any time during their ownership. The important thing to know is that any state titling that may have previously applied to the vessel is invalidated and superseded by Coast Guard Documentation.
Can my boat be titled and Documented?
Once a boat is Documented with the US Coast Guard, any state titling that may have previously applied to the vessel is invalidated and superseded by Coast Guard Documentation. The registration depends on the requirements of the state where the owner primarily keeps the vessel, and where the taxes have been paid. Some states require vessels to maintain registration along with the Documentation; others do not issue a registration at all if a vessel will be Documented. The most important thing to remember is that Documentation with the US Coast Guard DOES NOT exempt an owner from paying taxes to their respective state.
Meet the Team
Marine industry veteran Vera Sohovich and USCG documentation specialist Amanda Laughlin lead our new team of finance and documentation experts for the Bluewater organization. Working out of Bluewater’s Grasonville, Maryland office at Mears Point Marina and serving all ten locations, Vera and Amanda bring over 32 years of combined experience in the marine industry.