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Old 18-03-2014, 09:47   #1
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Sales Tax and Registration

I have been trying to sift through the forums and the internet to figure out the laws and my best options. To be honest it is all a bit confusing...

Here are the details:
1. Looking at purchasing a boat in Florida
2. Boat will be USCG documented
3. Intend to relocate boat to either Georgia, South Carolina, North Carolina, USVI for six plus months
4. After six months, I will relocate the boat back to Florida and register it

Disclaimer - I understand that any responses are not being provided as legal advice by an attorney or CPA. I know I should (and will) contact one of these professionals, so please save yourself the time and don't respond just to tell me to call a lawyer.

Now, I hope someone can answer if I accurately understand the rules with the three options I listed below:
Option 1 (as I understand it)
  • If I take the boat to NC, pay the sales tax (3% rate) and register the boat
  • Six months later, move the boat to Florida. Keep it registered in NC but also register it in FL so that I am not limited to 90 days in FL

Option 2
  • If I take the boat to SC for 89 days, then NC for 89 days and repeat for six months passes
  • Six months later, move the boat to Florida. Can I register it in FL so that I am not limited to 90 days in FL and NOT pay the 6% sales tax?

Option 3
  • If I take the boat to USVI and register there (no sales tax)
  • Six months later, move the boat to Florida. Can I register it in FL so that I am not limited to 90 days in FL and NOT pay the 6% sales tax?
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Old 18-03-2014, 10:35   #2
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Re: Sales Tax and Registration

First off, it sounds like a huge pain in the butt, not to mention the expense of all the moving around, just to avoid a little bit of tax. If you want to keep the boat in Florida, and use the boat in Florida, then my guess is that you would be money ahead, and get a lot more immediate enjoyment out of the boat, to just pay the Florida sales tax.

I know, that's not what you wanted to hear. Fine. Then the next thing you need to know is that the authorities in Florida are wise to the dodge of taking the boat out of the state for six months and then immediately bringing it back. The law says that the boat has to be owned AND USED in another state or territory for six months, to avoid the Florida tax. Moreover, it says that the boat must not have been bought for use in Florida. If they have a strong suspicion that you intended to use it in Florida from the very beginning, they will levy the tax and basically that puts the burden on you to prove that you didn't (which might be complicated by the fact that you've already announced on a public forum that your intention is to use it in Florida without paying the Florida tax).

The bottom line is that you need to keep plenty of receipts and such that will prove that you were using the boat elsewhere. More importantly, you need to actually make USE of the boat outside of Florida. You cannot just move it out of Florida, let it sit for six months, bring it back, and avoid the tax. People have tried that before, and failed, and won the privilege of paying taxes AND penalties AND interest.

Oh yeah, and you need to NOT be a resident of Florida. If you are a legal resident of Florida when you buy the boat, the six months exception does not apply.
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Old 18-03-2014, 10:44   #3
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Re: Sales Tax and Registration

I believe if you register it in Fl regardless of how long you have owned it or where, you have to prove sales tax was paid, pay less than 6 percent and the difference is what you will pay to Fl.
As you said I'm no expert, but believe that is how it's done
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Old 18-03-2014, 10:54   #4
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Re: Sales Tax and Registration

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Originally Posted by a64pilot View Post
I believe if you register it in Fl regardless of how long you have owned it or where, you have to prove sales tax was paid...
No, you don't. That is simply and completely wrong. If you are not a resident of Florida when you buy the boat, buy the boat for use outside of Florida, and own and use it outside of Florida (in another state or territory of the U.S.) for more than six months, then you can bring it to Florida and not have to pay any sales or use tax.

All the details can be found on the Florida Department of Revenue website...
Welcome to the Florida Department of Revenue
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Old 18-03-2014, 11:10   #5
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Re: Sales Tax and Registration

How much sales tax you pay in Florida also depends if you bought it privately or from a dealer, and how your bill of sale is structured.

From the government website:

. If a non-dealer makes the sale, then the outboard motor, equipment, devices, and accessories included with the vessel are not subject to tax when the outboard motor, equipment, devices, or accessories are separately itemized and separately priced on the invoice"

I just structured my purchase in that manner. Paid tax only on the hull and motor, all else including sails were itemized separate.

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Old 18-03-2014, 11:14   #6
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Re: Sales Tax and Registration

Or go to Rhode Island. No sales or property tax on boats. You don't need to be a resident to register a boat. Better cruising than Florida (at least for part of the year )

In any case, I would stay out of Florida for substantially longer than six months to strengthen an argument that you didn't have intent to use the boat in Florida. If you show up at six months and a day, you're waving a red flag.
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Old 18-03-2014, 11:16   #7
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Re: Sales Tax and Registration

Thank you for the responses, I really appreciate it.

I should have clarified, my intention is to sail on the ICW and enjoy the boat for six months outside of FL. It wasn't in my plans to just park the boat. In regards to after six months, my plan is to sail around the Carribean and East coast of the US. Getting the FL registration would be strictly so that I am not limited to worry if 90 days have past since I entered FL.
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Old 18-03-2014, 11:31   #8
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Re: Sales Tax and Registration

Sounds like a lot of work to avoid sales tax.

If they suspect you're working it just to avoid the tax, they'll make you pay it anyway.
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Old 18-03-2014, 12:29   #9
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Re: Sales Tax and Registration

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Originally Posted by letsgetsailing3 View Post
Sounds like a lot of work to avoid sales tax.

If they suspect you're working it just to avoid the tax, they'll make you pay it anyway.
Absolutely. They even have a clause as to intent which states to not pay you must not have the intent of bringing it to FL. Taxing authorities generally have means of dealing with what they believe to be "Tax Dodges", those transactions that are constructed in such a way as to technically comply with the law and avoid taxes.
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Old 18-03-2014, 12:54   #10
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Re: Sales Tax and Registration

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Originally Posted by mnfish View Post
It wasn't in my plans to just park the boat. In regards to after six months, my plan is to sail around the Carribean and East coast of the US. Getting the FL registration would be strictly so that I am not limited to worry if 90 days have past since I entered FL.
I have ZERO intention of moving to FL permanently. As I stated earlier, I just don't want to get stuck worrying if I want to stay longer that 90 days when I'm waiting for weather windows to cross the gulf stream or because I'm having an awesome time. If I had extra boat bucks I would just pay the Florida tax and be done with it but I don't so I'm trying to understand the alternatives. If any of you want to sponsor me and pay the FL sales tax, that would be sweet but short of that the taxes would impact the cruising kitty too much to pay.
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Old 18-03-2014, 14:28   #11
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Re: Sales Tax and Registration

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Originally Posted by mnfish View Post
I just don't want to get stuck worrying if I want to stay longer that 90 days...
I don't understand why you would have to "worry" about that. Register the boat wherever you are going to keep it most of the time. If you end up spending 10 weeks in Florida, and feel like you might stay longer, go down to the nearest DMV office and register the boat.

It's not like it's a big deal, and the cost is very reasonable. What's more, compared to other places I've lived, I have found the DMV offices in Florida to be pretty well run. I've always gotten in and out rather surprisingly quickly.

Besides, most states have similar laws. So no matter where you register the boat, if you end up staying a long time someplace else, you may have to register it again.
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Old 18-03-2014, 14:34   #12
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Re: Sales Tax and Registration

People act as if Florida has some unique requirements when many, if not most, states have similar laws. It's just more people who decide to keep their boats extended times in Florida.

There are some areas like this where having so many states with various rules and laws complicates life in the US. People from most countries are use to uniform rules across the country. But then many other countries will fit in one US state or one Canadian province. When we were a far less mobile society it didn't matter much but now the concept of so many states with different laws and rules creates many issues.
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Old 18-03-2014, 14:35   #13
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Re: Sales Tax and Registration

Quote:
Originally Posted by denverd0n View Post
I don't understand why you would have to "worry" about that. Register the boat wherever you are going to keep it most of the time. If you end up spending 10 weeks in Florida, and feel like you might stay longer, go down to the nearest DMV office and register the boat.

It's not like it's a big deal, and the cost is very reasonable. What's more, compared to other places I've lived, I have found the DMV offices in Florida to be pretty well run. I've always gotten in and out rather surprisingly quickly.

Besides, most states have similar laws. So no matter where you register the boat, if you end up staying a long time someplace else, you may have to register it again.
Agreed. My boat it's a 1980 considered an antique as it is over 25 years old, and cost 11.50 for registration.

Wish all boat expenses were as reasonable.

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Old 18-03-2014, 15:34   #14
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Re: Sales Tax and Registration

Quote:
Originally Posted by BandB View Post
There are some areas like this where having so many states with various rules and laws complicates life in the US. People from most countries are use to uniform rules across the country.
You're the lucky ones, you should get to this side of the pond. Travelling through Europe has become a lot easier, and the Euro got rid of most different currencies. But rules, regulations and taxes are different for every country in Europe.

BTW, our VAT rate is 21%, so a 6% sales tax? I would pay laughing!
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Old 18-03-2014, 16:54   #15
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Re: Sales Tax and Registration

Made a great living for many years delivering boats for their owners who joined the 90 day yacht club in CA and needed to have their vessel outside the state for, in those days, at least 90 days. It was a regular trip 2-3 times a week drop one off in Ensenada, MX, pick up one for the return trip. Went through the offshore delivery dance so many times I lost count but it was a lot of fun and got to drive some really fine vessels, also some not so fine. The savings on sales tax was considerable. Phil
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