Buying a boat in Florida

[Montanan]

I'll make this simple.

Pay the Florida Sales tax via the broker at the time of purchase.

Done deal. Issue resolved.

Recommend that you document the boat with the USCG so as to have USA nationality and to allow wearing the American flag when traveling in international waters and entering foreign territories.

Register the vessel in the State of Principal Use, which principal use becomes deemed if it is used in the waters of Florida for 90 days. If you change the State of Principal Use during your navigational travelling, then promptly register the vessel in the new State of Principal Use. One may incur Use taxation by the new State of Principal Use but will receive credit for the Sales taxation paid in Florida. Keep record of the paid sales tax.

If the boat is documented with the USCG then there will not be a title issued by the State of Florida, only a registration will be issued by Florida.

You will have a State to which you are a resident, and it sounds like you have chosen Florida to be that State. That means you need to pay State taxes for the privilege which includes paying property tax to the county in Florida to which you have registered the vessel.

If you have a motorized dinghy, it will need its own separate registration with the State of Florida.

Congratulations on your new boat purchase and wishing you Bon Voyages.

[Sand crab]

Lex, I'm not saying that the OP doesn't have to get a Florida registration I'm saying that others in a different scenario don't have to have any state registration. I know of several people that have only documentation and others that have both documentation and state titles (and registration obviously and that's weird).

However the OP may be able to form an LLC in another state and call the LLC the owner. Montana has become a big draw for this because there's no sales tax. Florida does give non-residents (the LLC) a grace period of 90 days to get a newly purchased boat out of state but I think you have to wait a good while before you can bring it back in and this part doesn't help the OP.

[Capt Clark]

Your residence or drivers license has nothing to do with this. It’s all about where the vessel is used or kept most of the year. I know of several out-of-state owners who have boats in Florida with Fl registration.

[Be Free]

I have lived in Florida my entire life. I've have owned multiple businesses that collected sales tax here. You do not want to mess with the Florida Department of Revenue.



Pay the tax.

[Bobby Lex]

Originally Posted by Sand crab

Lex, I'm not saying that the OP doesn't have to get a Florida registration I'm saying that others in a different scenario don't have to have any state registration. I know of several people that have only documentation and others that have both documentation and state titles (and registration obviously and that's weird).

However the OP may be able to form an LLC in another state and call the LLC the owner. Montana has become a big draw for this because there's no sales tax. Florida does give non-residents (the LLC) a grace period of 90 days to get a newly purchased boat out of state but I think you have to wait a good while before you can bring it back in and this part doesn't help the OP.

Got it. Thanks for clarifying.

Bob

[S/V Illusion]

Originally Posted by Sand crab

Lex, I'm not saying that the OP doesn't have to get a Florida registration I'm saying that others in a different scenario don't have to have any state registration. I know of several people that have only documentation and others that have both documentation and state titles (and registration obviously and that's weird).

However the OP may be able to form an LLC in another state and call the LLC the owner. Montana has become a big draw for this because there's no sales tax. Florida does give non-residents (the LLC) a grace period of 90 days to get a newly purchased boat out of state but I think you have to wait a good while before you can bring it back in and this part doesn't help the OP.

Again, it has nothing to do with legal entity ownership. In Florida, like most other states, it’s about where the boat is and for how long it’s there, not who owns it or where that ownership exists.
Santa Claus legally residing at the North Pole could create an LLC ownership and it wouldn’t matter although that would be a pretty sleazy avoidance scheme for Santa to try. He still owes the tax.

[Polar Opposite]

Whoever posted that the Broker will collect sales tax at the time of sale is absolutely correct.

[S/V Illusion]

Originally Posted by Polar Opposite

Whoever posted that the Broker will collect sales tax at the time of sale is absolutely correct.

For clarity, a broker or anyone else for that matter may collect the tax payment, however, that doesn’t relieve the buyer until the person acting as a middleman actually submits the payment.

The broker isn’t obligated to collect tax payments nor is he an agent of the Tax Collectors Office in Florida.

[Montanan]

Originally Posted by Sand crab

Lex, I'm not saying that the OP doesn't have to get a Florida registration I'm saying that others in a different scenario don't have to have any state registration. I know of several people that have only documentation and others that have both documentation and state titles (and registration obviously and that's weird).

However the OP may be able to form an LLC in another state and call the LLC the owner. Montana has become a big draw for this because there's no sales tax. Florida does give non-residents (the LLC) a grace period of 90 days to get a newly purchased boat out of state but I think you have to wait a good while before you can bring it back in and this part doesn't help the OP.

If the vehicle or vessel is not used / located in Montana the State registration is invalid as the only registration that is valid is the State of Principal use.

Montana does not have a Sales tax but will impose a property tax on the vehicle / vessel. And most States have both a Sales and a Use tax, if the boat is used elsewhere from whence it was sold, Use taxation will be due. You can run but you can't hide successfully and the penalties and interest are very onerous. Very onerous. DMVs likes to become a revenue source.

The Montana DMV has made it much more difficult to obtain such "foreign / bogus" registrations as they will only process one registration per day from the person that brings that submits the paperwork hence taking the profit potential for the persons that were using this tax evasion scheme out of play. And one has to make an appointment to register the vehicle or vessel. If the State of Montana finds out about the equipment being located else where they will promptly notify the respective DMV in the State of Principal use and then fines will be levied by both Montana and the State of Principal use. States have entered into reciprocity agreements as to information sharing.

Displaying Montana license plates or boat decals will raise instant suspicion by other State law enforcement personnel. The boat obviously did not "temporarily" navigate out of the Great State of Montana to the oceans or to other States. Montana is a titling and a registering State.

[Montanan]

Originally Posted by Polar Opposite

Whoever posted that the Broker will collect sales tax at the time of sale is absolutely correct.

He is right you know.


Reference:

https://floridarevenue.com/Forms_library/current/gt800006.pdf



Snipets:

Sales and Use Tax on Boats
Information for Dealers and Brokers

Who Must Register to Collect Tax?

Any person or business that sells, offers for sale, or imports boats into Florida for sale at retail must register with the Florida Department of Revenue (Department) as a boat dealer. A boat broker offers boats for sale but may not have the boats in their possession. Boat brokers are also required to register with the Department as a boat dealer.

You can register to collect and report tax online at floridarevenue.com/taxes/registration or submit a paper Florida Business Tax Application (Form DR-1). The online application will guide you through the registration application to help you determine your tax obligations.


What is Taxable?
All boats sold, delivered, used, or stored in Florida are subject to Florida’s sales and use tax, plus any applicable discretionary sales surtax, unless exempt. Florida boat dealers and brokers are required to collect tax from the purchaser at the time of sale or delivery.

Discretionary Sales Surtax

Most counties impose a local option discretionary sales surtax. The surtax is due when the boat is delivered by the dealer or broker into a county that imposes a surtax or when the use of the boat occurs in a county imposing a surtax. Discretionary sales surtax applies to the first $5,000 of the purchase price. Current discretionary sales surtax rates for all counties are listed on Form DR-15DSS, Discretionary Sales Surtax Information, posted at floridarevenue.com/forms in the Discretionary Sales Surtax and Tourist Development Tax Rates section.

Maximum Tax
The maximum tax on the sale of a boat or vessel is $18,000. This includes both sales and use tax and discretionary sales surtax. For more information and detailed instructions on this maximum tax, see Tax Information Publication (TIP) # 10A01-07, issued on June 22, 2010, at floridarevenue.com/taxes/tips.
The maximum tax on the repair of a boat or vessel is $60,000. This cap is to be applied to each boat repair occurring in Florida. Subsequent and separate repairs are each subject to their own $60,000 cap. For more information and detailed instructions on this maximum tax, see TIP # 15A01-07, issued on June 26, 2015. TIPs are posted at floridarevenue.com/taxes/tips.


Penalty and Interest
➢ Penalty – If you file your return or pay tax late, a late penalty of 10% of the amount of tax due, but not less than $50, may be charged. The $50 minimum penalty applies even if no tax is due. Penalty will also be charged if your return is incomplete.
➢ Interest – A floating rate of interest applies to underpayments and late payments of tax. Current and prior period interest rates are available at Floridarevenue.com/taxes/rates.


Specific Exemptions
Boats Sold to Nonresidents

A boat sold by or through a registered dealer or broker to a purchaser who is a nonresident of Florida at the time of taking delivery of the boat in Florida is exempt. This exemption applies to the sale of a boat, including any accessories, but does not apply to the sale of a boat trailer.

The nonresident purchaser must meet the following requirements:
➢ The nonresident purchaser must sign an affidavit stating that he or she has read the law and rules regarding the specific exemption claimed and agrees to remove the boat from Florida. A suggested format for the required affidavit is provided in Rule 12A-1.007(9), Florida Administrative Code (available at flrules.org).
• A boat of less than 5 net tons of admeasurement must leave Florida within 10 days of purchase or immediately be placed in the care, custody, and control of a registered repair facility for repairs, additions, or alterations. The boat must leave Florida within 20 days after completion of the repairs.
• If the boat is 5 net tons of admeasurement or larger, the purchaser may obtain a set of Florida Department of Revenue boat decals, which authorize the boat to remain in Florida waters up to 90 days after the purchase. This period may be extended to 180 days with the purchase of a 90-day extension decal. The decals must be obtained from the selling dealer or broker.
➢ Within 30 days of the date of sale, the dealer or broker must provide the Department with a copy of the invoice, bill of sale, and/or closing statement, and the original signed affidavit provided by the nonresident purchaser.
➢ Within 30 days of removing the boat from Florida, the nonresident purchaser must furnish the Department with proof that the boat left Florida. Receipts for fuel, dockage, or repairs purchased outside Florida must identify the boat.
➢ Within 90 days of removal, the nonresident purchaser must provide the Department with written documentation evidencing that the boat was documented, licensed, titled, or registered outside Florida or documentation that the nonresident purchaser has applied for documentation, licensing, titling, or registration of the boat.

This exemption does not apply to
• a Florida resident,
• an entity in which the controlling person is a Florida resident, or
• a corporation in which any officers or directors are Florida residents.

The OP has stated to be a Florida resident because of having a Florida driver's license which requires to attest that one is a resident and provide documented proof of residency.

[Montanan]

Originally Posted by Capt Clark

Your residence or drivers license has nothing to do with this. It’s all about where the vessel is used or kept most of the year. I know of several out-of-state owners who have boats in Florida with Fl registration.

Yep, what Capt. Clark states is correct.

A vessel [like any vehicle] is registered [and perhaps titled if the State is a titliing State or the vessel is not documented by the USCG] in the State of Principal use, which typically is deemed to be whenever the good is within a State for 90 days or more, and / or in the State that it will be mostly used in a year. Note, if one goes wondering about from State to State during the year one may need to register at more than one State and to deregister at the previous State whenever the previous State is no longer the State of Principal Use.

[letsgetsailing3]

We use the SBI mail forwarding service and have Florida voter registration and drivers licenses but do not have a residence in Florida.


So you're using Florida as your primary residence, just don't want to for sales taxes. Got it.

I think Florida will get this, too. They do have some wording regarding registration to the effect of "intent", which I think is clear.

Pay your sales taxes, and be happy there is no state income tax, which I assume is part of why you use Florida as your primary residence.

[MicHughV]

I think the message is pretty clear here...pay the sales tax.

I've bought boats in Florida thru' a broker, without paying sales tax. For this, I had to take a stroll to the local tax office and write the big check.

Any broker I have ever dealt with in Florida tells me the same....pay the sales tax and quite bitching about it.

[chubby]

Originally Posted by Montanan

He is right you know.


Reference:

https://floridarevenue.com/Forms_library/current/gt800006.pdf



Snipets:

Sales and Use Tax on Boats
Information for Dealers and Brokers

Who Must Register to Collect Tax?

Any person or business that sells, offers for sale, or imports boats into Florida for sale at retail must register with the Florida Department of Revenue (Department) as a boat dealer. A boat broker offers boats for sale but may not have the boats in their possession. Boat brokers are also required to register with the Department as a boat dealer.

You can register to collect and report tax online at floridarevenue.com/taxes/registration or submit a paper Florida Business Tax Application (Form DR-1). The online application will guide you through the registration application to help you determine your tax obligations.


What is Taxable?
All boats sold, delivered, used, or stored in Florida are subject to Florida’s sales and use tax, plus any applicable discretionary sales surtax, unless exempt. Florida boat dealers and brokers are required to collect tax from the purchaser at the time of sale or delivery.

Discretionary Sales Surtax

Most counties impose a local option discretionary sales surtax. The surtax is due when the boat is delivered by the dealer or broker into a county that imposes a surtax or when the use of the boat occurs in a county imposing a surtax. Discretionary sales surtax applies to the first $5,000 of the purchase price. Current discretionary sales surtax rates for all counties are listed on Form DR-15DSS, Discretionary Sales Surtax Information, posted at floridarevenue.com/forms in the Discretionary Sales Surtax and Tourist Development Tax Rates section.

Maximum Tax
The maximum tax on the sale of a boat or vessel is $18,000. This includes both sales and use tax and discretionary sales surtax. For more information and detailed instructions on this maximum tax, see Tax Information Publication (TIP) # 10A01-07, issued on June 22, 2010, at floridarevenue.com/taxes/tips.
The maximum tax on the repair of a boat or vessel is $60,000. This cap is to be applied to each boat repair occurring in Florida. Subsequent and separate repairs are each subject to their own $60,000 cap. For more information and detailed instructions on this maximum tax, see TIP # 15A01-07, issued on June 26, 2015. TIPs are posted at floridarevenue.com/taxes/tips.


Penalty and Interest
➢ Penalty – If you file your return or pay tax late, a late penalty of 10% of the amount of tax due, but not less than $50, may be charged. The $50 minimum penalty applies even if no tax is due. Penalty will also be charged if your return is incomplete.
➢ Interest – A floating rate of interest applies to underpayments and late payments of tax. Current and prior period interest rates are available at Floridarevenue.com/taxes/rates.


Specific Exemptions
Boats Sold to Nonresidents

A boat sold by or through a registered dealer or broker to a purchaser who is a nonresident of Florida at the time of taking delivery of the boat in Florida is exempt. This exemption applies to the sale of a boat, including any accessories, but does not apply to the sale of a boat trailer.

The nonresident purchaser must meet the following requirements:
➢ The nonresident purchaser must sign an affidavit stating that he or she has read the law and rules regarding the specific exemption claimed and agrees to remove the boat from Florida. A suggested format for the required affidavit is provided in Rule 12A-1.007(9), Florida Administrative Code (available at flrules.org).
• A boat of less than 5 net tons of admeasurement must leave Florida within 10 days of purchase or immediately be placed in the care, custody, and control of a registered repair facility for repairs, additions, or alterations. The boat must leave Florida within 20 days after completion of the repairs.
• If the boat is 5 net tons of admeasurement or larger, the purchaser may obtain a set of Florida Department of Revenue boat decals, which authorize the boat to remain in Florida waters up to 90 days after the purchase. This period may be extended to 180 days with the purchase of a 90-day extension decal. The decals must be obtained from the selling dealer or broker.
➢ Within 30 days of the date of sale, the dealer or broker must provide the Department with a copy of the invoice, bill of sale, and/or closing statement, and the original signed affidavit provided by the nonresident purchaser.
➢ Within 30 days of removing the boat from Florida, the nonresident purchaser must furnish the Department with proof that the boat left Florida. Receipts for fuel, dockage, or repairs purchased outside Florida must identify the boat.
➢ Within 90 days of removal, the nonresident purchaser must provide the Department with written documentation evidencing that the boat was documented, licensed, titled, or registered outside Florida or documentation that the nonresident purchaser has applied for documentation, licensing, titling, or registration of the boat.

This exemption does not apply to
• a Florida resident,
• an entity in which the controlling person is a Florida resident, or
• a corporation in which any officers or directors are Florida residents.

The OP has stated to be a Florida resident because of having a Florida driver's license which requires to attest that one is a resident and provide documented proof of residency.

//end thread

[Lee Jerry]

Originally Posted by GinoDelG

Hello all,
I'm about to buy a new catamaran from a broker in Florida. I want to avoid Florida sales tax by moving it out of the state within 90 days. My wife and I live aboard our current boat and move up and down the east coast each year, generally spending winters in the Bahamas or Caribbean. We use the SBI mail forwarding service and have Florida voter registration and drivers licenses but do not have a residence in Florida. Should I try to do the paperwork myself or would it be best to hire an expert to do it for me?

I think you got most of your answers already, except for maybe one. Also, you say you're not a FL resident, but don't say where you are a resident. Where do you file state tax return?

Here's my experience, from a non-resident:

About a decade ago, we bought a boat in FL, both boat and broker. (It was documented and we transferred that to us, but not sure that's germane here.) Since we weren't going to keep it there, when the broker offered to collect the taxes and registration fees we declined. A while later (don't recall exactly how long, but a good 30 to 60 days), we got a letter from FL inquiring about their tax. We replied by snail mail that we aren't keeping the boat in FL and included a copy of our slip agreement in AL. Never heard from them again.

Also, FWIW, original purchase was in Aug, I think we left it there a few weeks before moving it to our slip in AL. We then returned to FL in Nov, spent 3 weeks in St Pete and then another 10-12 in Ft Lauderdale. Then we left FL in mid Dec for good on our to the Caribbean. FL tax was never an issue or even mentioned during that trip, but of course we were way less than the 90 days.

Fast forward to today. We recently bought a boat outside of FL but are keeping it there. The boat is documented. We waited about 80 days and then went to register (turns out it was supposed to within 30 days, and it took two trips because they limit the number they do per day and had filled up). Wrote the big check (no penalty was mentioned) and now the boat displays the registration decal but not numbers. Dinghy has separate registration and displays both decal and FL reg numbers.

So to answer your last question, unless you think you actually do owe the taxes and are looking for a way to avoid them, then no, you don't need to hire an expert. Once you figure out whether you owe or not, the rest should be fairly straight forward and easy. If you can't claim/prove residence elsewhere, it looks like you owe. If the boat is going to be in FL min 90 days per annum, you owe. (You can't take it out, not pay, and then bring it back.)

In my limited experience, FL is firm about their boat taxes, but not completely unreasonable.