Florida Sales Tax

[Freestyle]

I have a friend taking delivery of a yacht in California. My friend is a Florida resident. The boat will never be brought to Florida.

He has been told he will owe Florida sales tax. I am a lawyer and for the life of me can not figure out why someone told him this.

Anyone have any thoughts on this?

Thanks

Bruce
Freestyle
Tampa
1976 43 DCMY

 

[Freeebird]

I misread your post the first time, but if the boat stays in CA, there's no way he's responsible for sales tax as a Florida resident. He'll have to pay CA sales tax which will transfer if he ever does move the boat to FL.

 

[Boatsb]

As a Florida resident the boat will be registered in Florida and sales tax paid. As a California resident he registers the boat in California and sales tax paid. Either way sales tax is paid. I bet Florida has a lower rate than California.

 

[Freeebird]

As a Florida resident the boat will be registered in Florida and sales tax paid. As a California resident he registers the boat in California and sales tax paid. Either way sales tax is paid. I bet Florida has a lower rate than California.

He wouldn't be a CA resident, but that wouldn't matter where CA sales tax liability was concerned with the sale taking place there and the boat remaining in the state. As for FL collecting sales tax, how the heck would they even know a resident purchased a boat out of state? They wouldn't.

Does your friend have any family who live in NC or SC?

 

[Boatsb]

You pay sales tax when you register a motor vehicle. It would be the same in any state so if he registers the boat in California with a local address he will pay their sales tax. If he purchases the boat from someone in another state and will be leaving the state he has only 30 -60 days depending on the state to leave and will pay tax in the state he registers it in.

If he keeps it there he can register it in Florida as a resident. I do not remember any state that will allow you to register a vehicle without having paid sales tax.

 

[roundIII]

In some states if you purchase a vehicle/boat/motorcyle from an individual then sales tax is not collected. Georgia is one of these states. You do have to pay an ad velorum tax when you register the vehicle along with the title/tag registration fees. This is not nearly as much as the sales tax would be.

If you purchase through a retailer or broker than sales tax is collected. Florida does not work like this but Georgia does.

I am not sure about other states.

RR

 

[Freeebird]

My point was that you can register the boat in another state where the sales tax rates are lower. That's why I mentioned the Carolina's who have/had a maximum sales tax of about $300 regardless of purchase price.

 

[Pascal]

Boats are registered in the state of principal use so If he never beings the boat to Florida he doesn't have to pay tax there.

Now one issue he will run into is if he documents the boat under his name and/ or Florida address. You bet FLDOR will send him a bill... He needs to look into documenting the boat under a Corp...

He should really check with an attorney...

 

[Boatsb]

Randy the way to register it in another State is to have it held by a corporation there. That costs some money so it is not always better.

Pascal. The state of principal use is not where it gets registered. It needs to be registered in the state that the owner or owning corporation resides.

 

[Brian Degulis]

I have a friend taking delivery of a yacht in California. My friend is a Florida resident. The boat will never be brought to Florida.

He has been told he will owe Florida sales tax. I am a lawyer and for the life of me can not figure out why someone told him this.

Anyone have any thoughts on this?

Thanks

Bruce
Freestyle
Tampa
1976 43 DCMY

As a builder when I sell a boat to an out of state buyer and the boat is delivered out of state I don't have to collect tax. If I sell a boat to a FL company (I'm in FL) I must collect tax regardless of where the boat is delivered. So it would seem to me if your friend is a FL resident and he's registering the boat as a FL resident he will be liable for the tax regarless of where he keeps the boat. Some states like fl collect an aditional tax from boats registered out of state if they're operated in FL continously for I think 60 days.

Brian

 

[Pascal]

actually, 60 days without leaving state waters is Mass. in florida you can stay 180 days a year if your home port is out of state (and the owner is not a FL. resident, or FL corp)

this is why i brought up the ownership in my previous post.. if the boat is docuemnted with the USCG to a FL resident, they will get you.

since it's purchased out of state and will not be brought into FL, the buyer needs to set up an out of state corp. (delaware is easy) otherwise FLDOR will nail him.

 

[Boatsb]

And the big question is how much is he going to save and is it all worth it?

 

[Canuck Dennis]

If he is in California all he needs is a friends address or even a hotel addressl to register the boat then pay CA sales tax. Deal done. CA will not care if he lives on the moon, as long as they get their piece of the action. If Florida finds out he bought a boat in CA they cannot tax him as the boat is not Florida property yet. If he was forced to pay Fl tax then every Florida res. would have to voluntarily declare all purchases made out of State and pay Fl sale tax to suit. Totally ridiculous

 

[Boatsb]

If he is in California all he needs is a friends address or even a hotel addressl to register the boat then pay CA sales tax. Deal done. CA will not care if he lives on the moon, as long as they get their piece of the action. If Florida finds out he bought a boat in CA they cannot tax him as the boat is not Florida property yet. If he was forced to pay Fl tax then every Florida res. would have to voluntarily declare all purchases made out of State and pay Fl sale tax to suit. Totally ridiculous

And totally true

The state of Florida has sales and use tax.

If you buy something from out of state and bring it here you must submit the use tax which is equivalent to the sales tax MINUS any other states sales tax already paid.

http://dor.myflorida.com/dor/taxes/sales_tax.html

 

[Angela]

We go through this every now and then....Here's how it works:

FL sales tax is only applicable to sales that occur in Florida. Where a FL resident purchases something like this, USE tax is invoked. The sales tax rate is the same as the use tax rate. If he registers the boat in CA, as a Florida resident, Florida will want the difference between CA's rate and FL's rate and call it a use tax. If CA is the same or higher, he won't owe FL use tax. He gets credit for sales or use tax paid to another state.

You don't necessarily register the boat where you live, but where you use it the most. My boat is a owned by a Delaware corporation, yet I had to register her in FL because she spends more than 180 day/year in FL. The requirements vary by state.

If the boat never comes to FL and is never registered inFL, use tax in FL will only get triggered if CA spills the beans on him. Many states have that agreement to help each other collect taxes. And if CA's rate is equal to or higher than FL, then he's got nothing to worry about.

 

[Canuck Dennis]

I understood via ruling from State of Florida tax office that, "as long as the property purchased out of State is not combined with other property owned in the State *(regardless of residency) then no tax is payable. That to me means if the out of State purchase stays out of State then no tax payable, the use tax would be applicable if the property was brought into the State by a non resident, sales tax would be payable on differential basis if brought in by State resident.
We have an interesting tax situation in B.C. out of Province residents can keep Yachts in the Province tax free if the Yacht is registered in a Province that has no sales tax, i.e. Alberta... The Gov't figures that many $$$ will be spent by the owners in the Province and will gain that way, it's even more interesting in that there is now way to get an 80 ft Yacht from Alberta to B.C.

Taxes...yuuuukkkkk

 

[Passages]

Well this is clear as mud.


Let's switch it around a bit. I live in CT where the sales tax is 6%. Let's say I buy a boat in FL. In order to complete the sale, I need to close in FL. Will FL want a cut?

Do I need to pay tax to BOTH states? What is Sale tax in FL? If 6%, does all tax go to FL and CT gets zip?

Will FL give me a grace period to move the boat prior to paying tax?

 

[Angela]

I understood via ruling from State of Florida tax office that, "as long as the property purchased out of State is not combined with other property owned in the State *(regardless of residency) then no tax is payable. That to me means if the out of State purchase stays out of State then no tax payable, the use tax would be applicable if the property was brought into the State by a non resident, sales tax would be payable on differential basis if brought in by State resident.
We have an interesting tax situation in B.C. out of Province residents can keep Yachts in the Province tax free if the Yacht is registered in a Province that has no sales tax, i.e. Alberta... The Gov't figures that many $$$ will be spent by the owners in the Province and will gain that way, it's even more interesting in that there is now way to get an 80 ft Yacht from Alberta to B.C.

Taxes...yuuuukkkkk

Actually, you are correct - it's when the boat is brought into Florida that the use tax is triggered in most cases. That said, I read a tax law case where the owner had to pay tax to his state, even though the boat never came to his state. It was an interesting scenario - and that's what I was thinking. I'll see if I can find it. The state won and the boat owner had to pay up.

Oh...and in Florida, we don't have ad valorem tax or property tax on boats, but you'll pay through the nose for insurance!

 

[Angela]

Well this is clear as mud.


Let's switch it around a bit. I live in CT where the sales tax is 6%. Let's say I buy a boat in FL. In order to complete the sale, I need to close in FL. Will FL want a cut?

Do I need to pay tax to BOTH states? What is Sale tax in FL? If 6%, does all tax go to FL and CT gets zip?

Will FL give me a grace period to move the boat prior to paying tax?

As an out of state buyer closing on a boat in FL, you have 90 days to get the boat out of the state. Thereafter, you owe SALES tax. If you close on the boat in CT and then move it to Florida within six months of the purchase, FL will want 1% in USE tax on the first $5,000....see, you've given me a muddy situation to explain with the 6% CT tax. LOL FL sales tax rate is 6%. The some counties have a discretionary sales surtax. Dade county is 1%. Discretionary sales surtax is only on the first $5,000. State and use tax (6%) is on the entire amount.

So let's make an easier example Georgia has a 3% sales tax rate. Forget for the moment that you don't pay sales tax in GA on used boats unless they are sold by a dealer. You pay GA its 3%. Then, you move the boat to FL the next month. If you move it to Broward County (Fort Lauderdale), you pay FL 3% use tax. If you move it to Dade County (Miami), you pay FL 3% use tax, and the county 1% on the first $5,000.

Now, if you live in GA and use that boat there and the move to FL a year later, you pay nothing to FL because you have owned it for more than 6 months.

Is that any clearer?

 

[garyd]

Unless something has changed here is at least how it use to work.

Buy the boat outside of Florida keep it where you bought it for six+ months bring it into Flordia and or register it in florida to get your Numbers etc PAY ZERO SALES TAX.

Pay the registration fee to get your decal but not sales tax. AT least that is how it use to work.