One common question for people buying a boat is whether they should USCG document the boat or state register it. Now, in some states, you don’t have to do anything further if you USCG document the boat. Massachusetts is such a state. From the Massachusetts state website:
Boats exempt from registration requirements include those that do not use motors, and documented vessels (large boats that are issued a marine document and registration through the U.S. Coast Guard).
In many others, you have to still get a state registration sticker in addition to the USCD Documentation. This is usually as proof of payment for excise or use taxes. However, a USCG documented boat can not have a state title and is not required to show a state registration number of any sort. A state can not require a USCG-documented boat to be titled or issue it a state registration number or require such a number be displayed. Please note that registration and titling are two separate things.
USCG Vessel Documentation is probably a better choice if you live in a state like Massachusetts and you plan to keep your boat a long time. The reason is that USCG Documentation is a one-time fee of up to $133, rather than an annual or bi-annual fee—renewals are free. In Massachusetts, state registration of a boat the size of the Pretty Gee would cost $25 for the title and $80 for a two-year registration. Since I’ve owned the boat for more than four years, I’ve saved money by USCG documenting the boat instead of state registering it.
However, saving money isn’t the only advantage to USCG Documentation. One advantage of having a USCG documented boat is that the USCG Document provides a record of liens and owners that stays with the boat. This can often make selling the boat simpler. Also, buying a boat using a Marine Mortgage-type loan often requires the boat be USCG documented. The boat is used as collateral for the loan and the interest on the loan can often be written off in much the same manner as the interest on a home mortgage.
Another good reason for USCG Documenting a boat is if you plan to travel to foreign countries. State registrations are not recognized internationally, where USCG Documented vessels have international recognition. The further you are from the US, the more important being USCG documented becomes.
Being USCG documented also means that the boat is US flagged and provides you with some legal rights and protections a state registered boat would not receive when in foreign waters. Finally, USCG documented vessels are entitled to aid from the US Consulate when in foreign waters, which is not the case with state-registered vessels.
There are some restrictions on what boats may be USCG Documented. First, the owner of the boat must be a US Citizen. If the owner is a company or other business entity, it must be majority-owned by US citizens. Second, the boat needs to have a minimum net displacement of FIVE TONS. This does not mean the boat has to weight 10,000 lbs., but that the measurements must meet certain minimum specifications as seen in the Application for Simplified Measurement. Most sailboats over 26′ LOA will qualify. Boats as small as the 20′ Flicka have qualified as well.