Originally Posted by Captain Bill
You can avoid sales/use tax in Florida by buying
the boat in a state with no sales tax ansd keeping the boat there for at least 6 months. Time spent out of the country during that six months doesn't count towards the six month time limit. There's also a provision that you must not have intended to bring the boat to Florida when you bought it. If you are a Florida resident you may have trouble convincing them you did not intend to bring the boat to Florida.
This is mostly correct, but there are a few points that need clarification:
1. When a Florida resident purchases outside of Florida, the boat doesn't need to stay in the state where it was purchased for six months. It just needs to stay out of Florida for six months. For example, if a Florida resident purchases a boat in Maine
, one doesn't have to stay in Maine
for the 6 months before returning to Florida. The return trip to Florida can take six months, spending time in several states in between, and still avoid the use tax.
2. One need not purchase
a boat in a state without sales tax. If the state with a sales tax has a provision whereby a citizen from another state can purchase
with the intent of exporting the item to their home state, one can still avoid sales tax. For example, a non-Floridian buys a boat in Florida and removes the boat from Florida within 90 days after purchase. One just needs to know the tax law of the state where the boat is purchased and the tax laws of the states between that state and Florida. Working within the law, taxes can be avoided or at least reduced. The Florida law provides six months to allow
the "other state" to collect taxes, but does not require
that state or any other state to do so.
3. US territories (e.g., Puerto Rico
and the USVI) are technically "outside of the country," but are included in the Florida law covering use tax exceptions. In addition to purchasing
in another state, one can also purchase in a US territory, and take six months to return to Florida.
4. Time spent outside the country is irrelevant. All the State wants to see is a bill of sale
showing the location where the purchase closed
and proof that the boat hasn't been in Florida. This is especially the case where one purchases a boat in, for example, the USVI and will, more likely than not, spend time in another country before returning to Florida. (Closed is important because it may save you lots of money
if you are interested in a boat in the BVI, write into the purchase contract
that the closing must occur in the USVI. This assumes that the boat has been previously imported into the US, as a US citizen can't purchase anything in the US that hasn't previously been imported and import
5. Intention is also irrelevant. How can the State determine and enforce intent? There is no such provision. Please see the link below.
The spirit of the Florida Use Tax exemption law is that if a Florida resident purchases outside of Florida and does not bring the purchased product back to Florida, a six month period will allow the "other state" to collect taxes. That is, the intent of the exemption is not to avoid taxes, but to avoid double taxation - once by each state. It's just a happy coincidence that if enough effort is expended and, in some cases, inconvenience endured, one can avoid the use tax.
I have personally spoken with the State of Florida Department of Revenue numerous times concerning this topic. The full text of the law is available from the Florida Department of State Division of Library and Information Services