Florida Boat Sales Tax

[h20]

Is there a state that does not charge boat sales tax?
I know it can be high in Florida. We always follow the rules and
it is most importatnt to know what the rules are. Like buy a boat in
in one state, send it home to another state or your other office boat location where you rent it out for bare boat. Rules are not loop holes!
States are meant to be competetive. I know there a lot of folks in here who buy and fix up boats for sale. I have done this and love the work, but the margins are slim, so want to use the best way where to buy, pay tax or not to pay tax depending on the legal strategy. Thanks,

[belizesailor]

Used to be 10% in FL. If the boat went directly into charter use in FL or left the State within 90 days then no tax due. Some used to do closings just outside FL territorial waters, but I think that loophole has been plugged. I would check with a broker/attorney on current laws.

Note that of you avoid sales tax in one state another may try to collect. My boat was verifiably exempt in Florida due to going straight into charter service. Texas regulations were that if you hadn't paid it somewhere else, and we're in Texas more than 90 days, then it was due to Texas. Texas tried to collect from me. Fortunately, the whole exempt in Florida thing thru them into a tail spin...before they got it figured out I was gone.

[onestepcsy37]

Florida sales tax is 6%, although a few places have tacked on an additional 1/2%. Registration on boats over 30 years old is less than $10 a year.

[DotDun]

FL sales tax is capped @ $18,000 ($300,000 purchase price).

[Fulmitz]

In Louisiana there is no sales tax on a used boat that is purchased for pleasure use. I bought my 2 year old boat in FL last July and had 10 days to leave. For $50 they extend to 90 days. Then you need to show proof you've left the state or they will go after you for the tax. Once in Louisiana, I had to register the boat here and send a copy to Florida. In the interim I showed them receipts from my local marina to prove I was out of state.


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[skipmac]

RI is the only east coast state I know that doesn't charge sales tax but I'm sure there must be one or two more.

However, I recommend caution in this. You may register the boat in a non tax state but if your legal residence is in a tax state they might come after you. Also if you purchase the boat in a tax state most of them require you to pay the tax no matter where your state of residence unless you remove the boat from the state of purchase within a deadline; 30-90 days depending on the state and situation.

Other gotchas and loopholes may exist. Research the specific laws of the states you will deal with carefully in advance.

[hellosailor]

Read the MANY old threads in many forums about this. RI has no sales tax but unless you plan to register the boat there AND keep it there forever, you may wind up being taxed and penalized by your true residence state, or the next state you take it into, or any state where you wind up for more than 90 days, or....
Venue-shopping can come back to bite you, if you're not already fully informed about all the possible repercussions and catches.

[Kenomac]

Oregon doesn't have a sales tax on boats.

[hellosailor]

"Oregon "...
And if you take the Lewis & Clark Canal, from the Oregon River to the Missouri, and then down to the Gulf and east from there, Oregon also makes a great place for a Floridian to keep a sailboat and daysail it on the weekends. (VBG)

[Rhapsody-NS27]

As mentioned, another state may try collecting sales tax. I bought my boat in TN but because it had a hailing port of CA, CA sent me a bill for use tax. I had to send them documents to show it was purchased and used elsewhere.

My understanding is if you pay sales tax in one state and move to a state that has higher sales tax, they could charge you the difference. So paying a higher sales tax might work out from having to pay more to another state. If I'm wrong in this, I would appreciate being corrected.

as onestepcsy37 said, FL registration can be cheap. I know of a guy who registered his boat for a few months of sailing around FL and paid just over $14 because his boat is considered an antique.

Aside from sales tax, check where you are using a boat and see what their rules are for registration. I lived on the border between TN and KY. If I used the boat at a TN lake, I would have been required to register but in KY, they didn't require it for USCG documented boats. You're likely to pay sales tax no matter where you are as most (if not all) require proof that tax is paid before you can register.

from what I could tell, when it comes to boats and what fees/taxes you pay is based on where the BOAT is located, not you. So if you live in one state but the boat is in another, different rules could apply.

[Robin3]

Virginia tax is capped at $2000 or was a few years ago (2011) when we bought our first USA boat. We had originally planned to relocate it to Hampton Va with tax capped at $2000 and virtually no property tax on boats, but had to return to the UK before final closing and then hurricane Irene screwed our plans to return and do the delivery trip in the time allowed to escape Florida in the permitted timescale tax free. We were planning cruising Florida anyway sometime so decided we might as well just pay and stay since normal reciprocal deals with other states meant we could pretty well cruise/move anywhere thereafter without having to pay again to somewhere else. When we sold that boat it was to a couple with a company setup in Delaware with no sales tax due and as far as I know it is still cruising the East Coast thus. We bought another previously owned boat in Florida and again paid and stayed and are still here and full time legal Florida residents.

[Sojurnr]

Although to my knowledge it's yet to be challenged in court all the way, a state levying a tax on a transaction across state lines is unconstitutional since regulation of interstate commerce is one of the few responsibilities specifically assigned to the federal government.

Sadly, IMO only a well funded federal lawsuit could ever successfully discourage the practice.

[PuttingDoctor]

I'm surprised to see no mention of Delaware as it is the tax haven of many corporations small and large. Many boats and aircraft are registered in DE with a state agent acting as your attorney.

[Hud3]

Florida does have a provision allowing you to purchase a boat there and pay no Florida sales tax if you move it to another state within 90 days, are not a Florida resident, and have no intention of moving it back to Florida at a later date.

However, I believe that I've also read that this provision is available only if you buy from a broker or dealer. If you buy a boat in Florida from an individual, you may have to pay the sales tax no matter what. I suggest you research that if you intend to buy from an individual.

[skipmac]

Originally Posted by Hud3

Florida does have a provision allowing you to purchase a boat there and pay no Florida sales tax if you move it to another state within 90 days, are not a Florida resident, and have no intention of moving it back to Florida at a later date.

However, I believe that I've also read that this provision is available only if you buy from a broker or dealer. If you buy a boat in Florida from an individual, you may have to pay the sales tax no matter what. I suggest you research that if you intend to buy from an individual.

Hi Hud,

The first part is correct but the second part I believe is more or less the opposite.

If you buy a used boat from an individual in Florida there is no one in the transaction to collect the sale tax. You will only be hit up for the tax if you go to a county office to get a Florida registration for the boat. No proof of sales tax paid, no registration.

If you remove the boat from Florida within the deadline then you're free and clear although if some official questions you on the matter you will have to show proof of all the details.

You can buy in FL and register the boat in another state but stay in Florida and run the risk of getting caught at it and then being charged the sales tax plus interest and penalties.

If you buy from a broker or dealer then I believe they are obligated to collect the sales tax during the transaction unless the buyer submits some state form showing either an exemption from the tax or intent to remove the boat before the deadline expires. The deadline can be extended if you can document that the boat is in a yard and being worked on.