Deferred importation has been a priority for the United States superyacht industry for some time now, but, will the soon-to-be administration of president-elect Donald Trump signal an end to the long winded bureaucratic process in which the industry has found itself embroiled?
House resolution 4065 (HR4065) is a bill that is currently under review in the United States Congress. HR4065 attempts to secure a deferral of payment for the duty owed on the importation of foreign flagged yachts to the closing of the sale, rather than upon entry into US waters as it currently states. This bill is in relation to the sale of superyachts by foreign flagged vessels to US residents when in US waters.
“Under the current regime the seller is required to pay duty of 1.5 per cent upon importation of the vessel based on an estimated sale value,’ explains Cindy Sailor, executive director of the International Yacht Brokers Association (IYBA). “This requirement has been a serious impediment when trying to engage foreign flagged vessels in the United States re-sale market.”
IYBA’s argument for deferred importation is a simple one; more yacht sales equal more taxation revenue, duty paid will accurately reflect the sale and more yacht sales amount to trickle down investments in local economies and job creation. IYBA predicts that, on average, yacht sales result in around 13 per cent of the value of the yacht being spent locally, be that in berthing costs, maintenance, provisioning or the myriad and well documented other expenditures associated with yachting and superyachting in particular.
“All told we have been trying to get this bill through for nearly four years,” continues Sailor. “Washington is not easy to navigate. We have hired a lobbyist and several people to help us navigate the political quagmire, but, finding the right legislators to present your case to and garnering support on Capitol Hill takes time. But, I believe we are nearing a resolution.”
For lack of a crystal ball it is too early to make any claims about president-elect Donald Trump’s political movements once in office, however, it is assumed that Trump’s pro-business position will have a positive effect on the lessening of barriers to entry for a variety of industries. Sailor optimistically believes that the same may be true of the Trump effect on superyachting – a pastime he is more than familiar with.
“We are very optimistic and our new president - while he is yet to be inaugurated so we cannot say anything with certainty - is pro-business and pro-American jobs and we feel that we have made a compelling case that shows how supporting HR4065 will benefit both,” concludes Sailor.