Use tax question Florida

[Montanan]

Originally Posted by smbdyiam2

I did just see that sales and use tax are also called privilege tax. So I guess you get the privilege. Maybe more than 1.

It is always a privilege to pay taxes.

Indeed you do get a credit against the Florida use that may be due, if any is due, for the amount of taxes one paid in any other State. Reciprocity.

If one purchased the boat in Texas and did not exit the State promptly then sales or use tax would be due to the Great State of Texas. If you then brought the boat to Florida within six months of its purchase in Texas then Florida use taxation would be invoked.

You don't get a credit refund if the other State's taxation was higher than Florida's.44

To clarify as to registration in Florida, there is a 90 day period of exemption for boats that are USCG documented, validly registered in another State, or foreign flagged. Otherwise the exemption period is 30 days. I hope I did not confuse anyone, with my abbreviated post in that regard. I was thinking of the OP's situation whereby the boat has been stored in Florida and is not registered and is past due as to its registration.

Also note that the 90 day period only applies to non-residents of Florida. If you become a resident of Florida then you have to act quickly as to obtaining driver's licenses [30 days], and ten days for Florida insurance and Florida registrations / titlings.

[rachelsavitt]

Hello all
Thanks for all the great information, still slightly confusing

We bought boat Texas and coast guard certified and then left Texas one month later and went to the Bahamas. So we entered Florida after 6 months of owning the boat

I know I need to pay “use” tax in Florida, are they going to try and get sales tax as well? I assume we also owe interest since we should have done this about 18 months ago.

Do I also then have to register in Florida , the boat is updated with the coast guard registration. We have not had the boat in any water for almost 2 years . Can we wait to register it when we plan on sailing again or do we need to do it now?

I am working on the paper work to get California off my back

Thanks again
Rachel

[letsgetsailing3]

Originally Posted by rachelsavitt

Hello all
Thanks for all the great information, still slightly confusing

We bought boat Texas and coast guard certified and then left Texas one month later and went to the Bahamas. So we entered Florida after 6 months of owning the boat

I know I need to pay “use” tax in Florida, are they going to try and get sales tax as well? I assume we also owe interest since we should have done this about 18 months ago.

Do I also then have to register in Florida , the boat is updated with the coast guard registration. We have not had the boat in any water for almost 2 years . Can we wait to register it when we plan on sailing again or do we need to do it now?

I am working on the paper work to get California off my back

Thanks again
Rachel

If you’re going to register it in Florida, I think you’ll just pay a tax (and maybe a penalty?) at the time you register it, and you’ll be done. The use tax is the same rate as the sales tax. They’re usually pretty reasonable.

The problem, of course is getting that done, so you can get California off your back.

[Zzmeyer]

California isn't owed tax whether you are a resident or not if you prove the boat hasn't been in California. You have to prove the boat was not in California to avoid California tax (while you will get credit for tax paid in other state you will still end up paying the total amount in tax.). This is done with receipts from dealers/marinas/fuel docks etc. You do not have to pay tax in another state to prove it wasn't in California. Hundreds of boats have taken offshore delivery in California and taken the boat to Mexico to avoid California sales tax without registering or paying tax in any state (US documented boats are not registered in California)

[gonesail]

Originally Posted by rachelsavitt

I know I need to pay “use” tax in Florida, are they going to try and get sales tax as well?

if you did not pay sales tax in another state then yes .. Florida will be looking for it when and if you register the boat there. you need a bill of sale and the CG document. if your boat is 30 years or older you can register it as an antique. good luck

[skipmac]

Originally Posted by gonesail

if you did not pay sales tax in another state then yes .. Florida will be looking for it when and if you register the boat there. you need a bill of sale and the CG document. if your boat is 30 years or older you can register it as an antique. good luck

There is an exemption for FL sales and use tax that the OP probably qualifies for.

If you meet and can prove the following:

- Boat was purchased outside FL
- Buyer was not a legal resident of FL at the time
- Boat was purchased and used legitimately for at least six months before the boat or owner began residing in FL.

If all the above then you should be exempt from FL sales taxes, even if you did not pay tax in another state.

[letsgetsailing3]

Originally Posted by skipmac

There is an exemption for FL sales and use tax that the OP probably qualifies for.

If you meet and can prove the following:

- Boat was purchased outside FL
- Buyer was not a legal resident of FL at the time
- Boat was purchased and used legitimately for at least six months before the boat or owner began residing in FL.

If all the above then you should be exempt from FL sales taxes, even if you did not pay tax in another state.

The boat has already been in Florida for two years, so she'd have to lie her butt off. She gets caught doing that, it's tax evasion.

Her best bet is to tell the truth at this point.

[Montanan]

Originally Posted by onestepcsy37

FWIW.


i sold my boat, registered in florida and i live in florida, to a california resident.
he had no intention of bringing it back to california. i crewed for him and we
sailed it to north carolina, where he hauled it.


about a year later he emailed me and told me california was trying to collect tax from him. he sent me a form from california that i, as the seller, had to fill out for him. it stated that i sold the boat to him in florida, the boat is now in north carolina, and to the best of my knowledge, will never be in california. If the boat had been in California on the annual date of property assessment then property tax would have been due on the boat for that assessment year. If the boat had moved out of the county / State jurisdiction and remained out then no property tax would have been due. Indeed the property tax assessor presume that the boat remains in the location where it was previously taxed and send a bill which bill can be contested or which bill can be corrected say if the boat had been moved to a different county in California then the new county would need to add the property to its taxation role.


apparently that satisfed the state of california.


another story.


cruising friends of ours live in new jersey. they keep their boat in georgia. cheaper insurance. they register their boat in florida. cheaper registration and taxes. they needed a florida address so they signed up for a mail drop at saint brendans isle in green cove springs florida. perfectly legal. been doing if for at least ten years.

Not truly legal, unless they have established residency in Cove Springs, a mail drop location is not ones residency because one does not reside inside a mailbox. Florida residence has been detailed in my post above, the State like all States is explicit as to when residency is established and when it is not established. Been doing it for ten years does not mean doing it properly. Since the boat is kept in Georgia it should be registered in Georgia, if they transit to Florida for more than 90 days then it should be registered in Florida. A boat can be properly registered in more than one State at a time because the period of registration is typically annual before expiration. Renewal of the registration is thence fact dependant at the time of expiration. It appears that your friends have been breaking the laws, not just bending them and doing such for rather immaterial values.


florida has a low sales tax, no personal property or usage taxes, and a reasonable annual registration fee. if your boat is over 30 years old you can register it as an antique, and pay the antique registration fee - eight dollars.

Notes above.

[Montanan]

Originally Posted by rachelsavitt

Hello all
Thanks for all the great information, still slightly confusing

We bought boat Texas and coast guard certified and then left Texas one month later and went to the Bahamas. So we entered Florida after 6 months of owning the boat I suspect that your Hailing Port designation for USCG documentation was a place in California which designation would trigger notification to the tax assessor of the jurisdiction for that hailing port and likewise would enable your contact information to direct the tax billing. Note if you do not pay the bill or contest and have the bill voided then the assessor can attach a tax lien on your boat and could have your boat arrested, [your boat is arrested not you]. So yes do contact the assessor's office and have the boat removed from their property assessment listing. Should be a simple matter if you can show receipts covering the entire period of ownership that it was out of state.

I know I need to pay “use” tax in Florida, are they going to try and get sales tax as well? I assume we also owe interest since we should have done this about 18 months ago. One only pays either a Sales tax or a Use tax, never both, as their is only taxation of one or the other privilege.
If you purchased the vessel from a dealer then the dealer should have charged you for a Sales tax and the dealer acting as trustee of your payment of Sales tax would have been required to forward that Sales tax payment to the State of Texas. If the dealer does not forward your payment to the State, then the dealer could [read will] be fined and perhaps jailed for breaking the taxation law and responsibility. If you purchased the vessel in the course of a "casual" sale, i.e., not from a dealer, then you as the purchaser would have been required to pay a Use taxation for the privilege of using the good in Texas. The definition of who constitutes a "dealer" is specified in State laws, generally they have to be in the trade, although there is usually a cut off wherein an person who owns several boats decides to sell them all in one year that they can thence be categorized as to becoming a dealer during that year. It sounds like you may have qualified for an exemption from Texas Sales or Use taxation if you removed the vessel from Texas before the number of days allowed to qualify for exemption from Texas taxation.
It would be important and beneficial that you have documentation of its departure date to support that fact and your affidavit that it was timely removed. I would suspect that there may be penalties and interest due to the jurisdiction that was supposed to be paid the Sales / Use taxation, and ditto for deferred registration.
Since the boat has been documented with the USCG, there would be no titling requirement at the State level, but there would be registration requirements depending on the specific laws of each State. Fact dependent.

If you qualified for the non-resident exemption in Florida then no sales or use tax would be due to Florida. If you kept your out of state purchased boat outside of Florida for more than six months after your purchase then no Sales or Use tax is due Florida.

Do I also then have to register in Florida , the boat is updated with the coast guard registration. We have not had the boat in any water for almost 2 years . Can we wait to register it when we plan on sailing again or do we need to do it now? Yes, the boat should have been registered within 90 days of its entry into Florida, it does not matter if it was kept in the water or on Florida land. The State of Florida should desire that it be back registered to the date whence it should have first been required to be registered. Continuing to not register it just keeps the vessel as being an unlawfully non-documented boat from a State perspective. Note the term non-documented to Florida is distinct from the term "documented" as with the USCG. The fact that the vessel is documented with the USCG means that the boat has attained USA nationality for international maritime purposes under UNCLOS. But the unregistered vessel located in Florida is a "non-documented" vessel for State law purposes. Get it registered promptly and the issue will be behind you, there being no legally recognizable purpose for it to not be registered given it situs. Assessor and State law enforcement officials due periodically inspect marinas and shipyards to locate vessels that are not properly registered and not on their taxation recordations. They typically assess fines when they find such rogue boats. If you have a dinghy that is more than 16 feet in length, or a dinghy of any size that is motorized then that vessel will also need to be registered with Florida. The parent boat's registration does not cover the requirements of the dinghy. So if you have such dinghy go ahead and get its paperwork in order at the same time as the big boat.

I am working on the paper work to get California off my back
A routine and a should have been expected matter, if your boat has a California hailing port. If it had a hailing port designation elsewhere, then that other jurisdiction would likely have assessed property taxation assuming such personal property was assessable in that jurisdiction. Not all States assess vessel property taxation and any and all property taxation is dependent on the property being located within the taxing authorities jurisdiction.

Thanks again
Rachel

Rachel, happy boating. Stay healthy. All the best.

[skipmac]

Originally Posted by letsgetsailing3

The boat has already been in Florida for two years, so she'd have to lie her butt off. She gets caught doing that, it's tax evasion.

Her best bet is to tell the truth at this point.

From the OP, So we bought our sailboat in Texas in dec2017, we live in California.
We went in a 6 month trip and then have had the boat dry stored in Indian town in Florida ever since


Well, wasn't suggesting the OP prevaricate. Regardless, I don't think there's a issue.

FL regs don't care how long the boat has been in FL as long as it did not come to FL sooner than six months

[Montanan]

Originally Posted by skipmac

There is an exemption for FL sales and use tax that the OP probably qualifies for.

If you meet and can prove the following:

- Boat was purchased outside FL
- Buyer was not a legal resident of FL at the time
- Boat was purchased and used legitimately for at least six months before the boat or owner began residing in FL.


If all the above then you should be exempt from FL sales taxes, even if you did not pay tax in another state.

Correct assessment of the non-resident exemption.

[Moontide]

If the boat was not brought into California within 12 months of purchase (for California residents) then no sales tax is due.


Eacj county assesses property tax on vessels located within that county. If the vessel is not in California then no property tax is due. Will need to show it is not in California. Bill from commericial storaage facility, letter from owner of porperty if stored on private property, pictures, etc. can all be used to document that it is not in California. May take a while but eventually you should win. The Franchise Tax Board actually has a booklet addressing the issue, although sometimes local assessors try to ignore what it says in an effort to coerce payment when not legally due.

[letsgetsailing3]

It does seem that if the boat was never in California, then no California tax would be due.

[skipmac]

Originally Posted by Montanan

Correct assessment of the non-resident exemption.

Thanks. Unless the rules had changed recently I was certain of my facts. I was a dual resident , FL and RI when I bought the boat in NY but FL was primary residence. However kept the boat in RI for the first year as my second home when I was working next door in CT.

So I researched the rules very, very carefully including calls to the head offices of FL DOR and FL FWC and spoke with people in charge of the tax issues to confirm.

As a RI resident I paid no sales tax on a used boat. Kept it and legitimately used it there for a year before I changed jobs and moved the boat to FL. Have not been asked for FL sales tax.

[Montanan]

I believe Rachel's six plus months sojourn to the Bahamas will have been effectively heavily subsidized by deriving the exemption from use taxation. Always nice to be able to pursue tax avoidance schemes, just stay clear of tax evasions schemes. The first aids the bank balance, the second could result in drawing deep into one's bank balance and could provide a self-isolation period in jail.

As to residency, do realize that for most purposes one only has one legal residency at a time, albeit one may change legal residencies periodically. Having two places of abode does not necessarily resolve to having two legal residencies.