What Constitutes an ’Offshore’ Delivery?

I have been researching the requirements for an ’offshore delivery’ to be exempt from California sales tax, and I am confused about the minimum distance that I need to be ’offshore.’ I have read that I need to be more than 3 miles offshore to be outside of California waters, but I had always thought that United States jurisdiction extended for 12 miles. Which is the correct distance? How were these distances determined?

The short answer is that sales or use tax will be assessed on your purchase if you buy the boat within the state of California, and California’s territorial waters extend 3 miles from its coastline. This is a question of California law, so the definition of ’international waters’ is not relevant. It may, nonetheless, be helpful to provide an overview of the various mile markers and a look at how the boundaries were established.

Nations historically extended their jurisdiction for a distance of 3 nautical miles from the low-water mark of their shorelines. This practice was based on the effective range of shore-based cannon fire during the 19th century, though the 3-mile limit was the accepted measure of territorial jurisdiction until the 1950s.

The federal Submerged Lands Act of 1953 (43 U.S.C. sec. 1301) granted ownership of lands and resources to coastal states such as California within a range of 3 nautical miles from their coastlines (a nautical mile is equivalent to one minute of latitude, or 6,080 feet). The act provides a few exceptions to this rule, notably the Gulf Coast of Texas and Florida, where state jurisdiction extends to 9 miles offshore — but this is the source of California’s 3-mile jurisdiction for the offshore delivery process.

U.S. federal jurisdiction extends out from the limits of state jurisdiction. Pursuant to a 1988 proclamation by President Ronald Reagan (Proclamation No. 5928), the United States asserts sovereign rights over the seabed and waters out to 12 nautical miles from shore. Twelve miles is a surprisingly conservative distance, since a ship may easily be seen by the naked eye at that distance, but this is consistent with various international agreements.

Notwithstanding the 12-mile limit of U.S. sovereign territory, the U.S. also asserts jurisdiction over all living and non-living natural resources within a 200-mile exclusive economic zone (EEZ). Again, this is consistent with international treaties, and this extension of U.S. jurisdiction was enacted pursuant to a 1983 proclamation by President Reagan (Proclamation No. 5030). Jurisdiction in the EEZ is exercised to control all economic resources within the zone, including fishing, mining, oil exploration and any pollution of those resources. However, the U.S cannot regulate or prohibit passage or loitering above, on or under the surface of the sea within the EEZ.

The offshore delivery process is, of course, a lot more complicated than simply knowing whether you are within cannon range of the California Board of Equalization, and I will refer you to prior editions of this column for more information on that procedure (’Ask a Maritime Attorney,’ in July 27, 2006 and Sept. 6, 2007 editions of The Log).