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Old 17-06-2010, 09:33   #1
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Registering, and Re-Registering, in a Way to Avoid Sales Tax

I've read with considerable interest several of the threads that deal with sales tax and tax avoidance (as opposed to tax evasion which is illegal). So, let me pose this question:

If one (I) were to purchase a vessel in Florida but follow the procedure to remove it within the timeframe allowed so as to avoid paying Florida's sales tax, and documented and registered the vessel in Delaware which does not have a sales tax, maintaining it there for at least six months -- would I be able to then move the vessel back to Florida and re-register and document the vessel there without paying the aforementioned sales tax?

From what I've read, as long as I don't move the vessel out-of-country (which would toll the six month requirement), I wouldn't have to pay the tax.

Your thoughts?
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Old 17-06-2010, 12:59   #2
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I could be wrong, but to get out of paying sales tax in Florida I believe you have to show Florida proof of two things (at least): 1) that the boat was not purchased in Florida and 2) that the boat has not been in Florida for six months or longer.
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Old 18-06-2010, 09:01   #3
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The only problem with your plan is that there is a provision in the law that says the exemption from paying sales tax only applies if you "have shown no intent to use the boat in Florida."

Obviously your intent is to use the boat in Florida. You are going to have to deceive them about that if you wish to avoid paying the tax.

Are you likely to get caught? No, probably not. If you move the boat back to Florida immediately after the six month period, they might be suspicious about your intentions, but they would have a hard time proving it. You could claim that your intent had been to live in Delaware long-term, but circumstances suddenly changed.

In any case, in my opinion, the deception necessary to pull this off moves it out of the category of tax avoidance and squarely into the category of tax evasion.
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Old 18-06-2010, 09:27   #4
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Quote:
Originally Posted by UWOA View Post
I've read with considerable interest several of the threads that deal with sales tax and tax avoidance (as opposed to tax evasion which is illegal). So, let me pose this question:

If one (I) were to purchase a vessel in Florida but follow the procedure to remove it within the timeframe allowed so as to avoid paying Florida's sales tax, and documented and registered the vessel in Delaware which does not have a sales tax, maintaining it there for at least six months -- would I be able to then move the vessel back to Florida and re-register and document the vessel there without paying the aforementioned sales tax?

From what I've read, as long as I don't move the vessel out-of-country (which would toll the six month requirement), I wouldn't have to pay the tax.

Your thoughts?
no - that will not work and will get you in trouble with the tax man.

Most states charge a 'use' tax FL is one of those whether you are documented or not. It is not a 'sales' tax. So when we ended up here after cruising for a while we had to register in FL even though we bought the boat 8 yrs prior in MD and used it all over. When we registered we showed proof we had paid 'use tax' somewhere else and did not have to pay FL that amount just the annual registration fee.
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Old 18-06-2010, 09:35   #5
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How much money are we talking about? At some point it is like insurance, get an expert. You are in Florida - find a Florida tax attorney (not a CPA or tax person), preferably someone who does out of state sales agreements. If there is no precedent, then go with what saves you money. If however, there is legal precedent against doing it - pay up.
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Old 18-06-2010, 10:58   #6
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Thanks everyone, especially Kefaa ... your advice is right on the money ....
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