Document Question

[travellerw]

Ok I have a question about a document I'm being asked to sign (and have notorized).

I'm a Canadian, that has purchased a boat from a German. The boat is lying in Cuba. One broker is Italian and the other Broker is American (Florida).

The US brokerage is asking me to sign an affidavid for the acceptance of vessel outside of Florida.

The brokerage is being insistent that I need to sign this document. Of course I can't believe that the State of Florida would make this a requirement for a non-US citizen (for a foreign boat, off US soil). My lawyer also agrees that not only would the State of Florida NOT require this, but it would be a violation of Canadian privacy laws. At this point, I have signed the document to move the sale forward (pretty sure their plan in the first place).

In any case, would anyone have an idea of what office I can call in Florida to have this verified? I would like to get the proper answer on this to help out future buyers (yes the brokerage should be doing this work, NEVER GONNA HAPPEN).

[skipmac]

Yacht brokers in the state of Florida (I used to be a yacht broker in FL so am familiar with the rules) are required to comply strictly with the state laws for sales tax. This includes the sale of any boat new or used in the state. Any boat sold in Florida, even to a non US citizen, must pay the tax or show that it complies with a legal exemption.

A sale and delivery that takes place outside the state to a non Florida resident that will not bring the boat to FL or register in Florida would be exempt.

I would say I'm 99% certain that is why the FL broker is requesting this document.

If the reality is the boat is being sold outside the state of Florida then that's the truth of the matter. Why would this violate any privacy law and why would you care anyway?

[travellerw]

As a Canadian, why would i need to report to a foreign government where i bought a boat, if its out of their jurisdiction. That is a breach of privacy. Italy didn't care.

The state of Florida had exactly zero to do with the transaction other than the brokerage office is located there.

Its bothersome as they request a notorized document that is clearly written to US citizens. My notary wasn't going to sign it for that reason.

Sent from my Nexus 4 using Cruisers Sailing Forum mobile app

[skipmac]

Originally Posted by travellerw

As a Canadian, why would i need to report to a foreign government where i bought a boat, if its out of their jurisdiction. That is a breach of privacy. Italy didn't care.

The state of Florida had exactly zero to do with the transaction other than the brokerage office is located there.

Its bothersome as they request a notorized document that is clearly written to US citizens. My notary wasn't going to sign it for that reason.

Sent from my Nexus 4 using Cruisers Sailing Forum mobile app

I thought I explained this but I guess not clearly.

If you are involving a yacht broker who is located in the state of Florida that broker has to comply with the laws of the state of Florida. That is why the broker is asking you to sign this form.

The state of Florida has a tax on boats sold in the state of Florida or boats sold to anyone that will register the boat in Florida or who will immediately bring the boat to Florida, even if the boat is not currently located in Florida.

Florida law does not automatically exempt non residents of Florida or non citizens of the USA. If the boat is sold in Florida and remains in Florida, no matter the residency of the buyer that boat will be liable for a minimum 6% sales tax.

The yacht broker has to answer to the state regarding the tax status of any boat he sells. That boat must either pay the tax or demonstrate that it is exempt from the tax by complying with one of the exemptions.

Certifying that the boat was delivered to a customer outside the state of Florida is one way to prove the sale was exempt from the sales tax.

I imagine the broker has few non citizen customers so the form may be worded in a way that is more appropriate for US citizens.

I don't understand why you are so upset about signing a form. As far as I can tell it will not obligate you to anything and in fact will prove you are not liable for any Florida sales tax and avoid a potential hassle if you ever bring the boat here.

[travellerw]

I'm gonna have to disagree with this completly.. I own a company that sells products all over the world. We also broker sales between multiple countries. I do not require my clients to sign an affidavid that they recieved those products outside of Canadian soil.
Its up to me, the business owner to report where I sold the product too and where I shipped it.

Frankly, asking someone (a foreigner) to disclose information about a private sale that happened on foreign soil simply because the broker has an office in a certain state is a purely insane concept. It shows an absolute distrust in your own citizens to report things properly.

In any event, it simply means I will never pick a broker from the state of Florida again. There are many brokers spread around the world that can broker foreign sales.

P.S. We might be extra sensative about our privacy up here. Especially towards the USA. They recently forced our government to implement a rule where we cannot open a bank account without signing that we aren't American Citizens. Seriously.. They forced every bank in Canada to implement that rule. The US foreign policy at work!

[Stu Jackson]

Originally Posted by travellerw

The state of Florida had exactly zero to do with the transaction other than the brokerage office is located there.

What part of THAT isn't clear?

[travellerw]

Originally Posted by Stu Jackson

What part of THAT isn't clear?

What does that have to do with anything.. The boat isn't there, the seller and buyer aren't there.. The transaction didn't take place there...

The only thing that happened is the broker was paid there!

[Stu Jackson]

Originally Posted by travellerw

The only thing that happened is the broker was paid there!

But, as was explained, that's what the State that the broker lives in requires.

Get the exemption and move on.

Good luck.

Enjoy your new boat.

Your choice to go to FL or not.

[travellerw]

Just because something was explained.. Does not make it right or rational.

As I explained in my first post, I have moved on. I was just hoping to help out future buyers. Now at this point, at least educate them this would be required so they can make an informed choice.

[skipmac]

Don't blame just Florida, most of the states I'm familiar with along the US east coast have similar rules about taxes on the sale of boats. Either pay the tax or document that you are exempt.

If you think Florida is a problem read a couple of previous discussions on this forum about California going after taxes on boat sales.

I don't disagree that the US is pushy about taxes. As I understand it, one of the few countries that goes after income earned overseas. As far as the banking thing in Canada, that probably came about after the IRS discovered billions of US dollars being sheltered in overseas accounts to illegally avoid taxes. That was mostly in Switzerland but happens in Panama, the Caymans and other places as well.

On the other hand, my friends in Canada assure me that the tax authorities there are not shy about going after their piece of the pie. Maybe taxing on different kinds of income and sales than the US but they will still come after you for what they think is due.

[skipmac]

By the way, I am also in the import/export business. In the last 20 years have probably sold close to $100,000,000 in products all over the world. In all cases, the companies I deal with have to comply with the laws of their country, even if the cargo never touches their soil.

For example, I buy products made in Belarus from a trading company in Rotterdam and ship them directly to Mexico. I have to report everything to the US authorities and the guys in Holland have to report everything to the Dutch authorities. Why would we do that when the products never touch either country? Because that's the law in both countries and both countries want their share of the taxes.

[travellerw]

Originally Posted by skipmac

By the way, I am also in the import/export business. In the last 20 years have probably sold close to $100,000,000 in products all over the world. In all cases, the companies I deal with have to comply with the laws of their country, even if the cargo never touches their soil.

For example, I buy products made in Belarus from a trading company in Rotterdam and ship them directly to Mexico. I have to report everything to the US authorities and the guys in Holland have to report everything to the Dutch authorities. Why would we do that when the products never touch either country? Because that's the law in both countries and both countries want their share of the taxes.

The point is... YOU have to report it to your government.. The guys in Holland report it to THEIR government. The guys in Holland don't have to report it to the US government. I'm sure they would stop dealing with you if they did have too.

Fact is, I don't blame Florida. I think this is a rule that no one has challenged so it has just remained in effect.

You are absolutely correct about the Canadian government. They are just as hungry and we also have to pay tax on foreign income. Recently they have also started a information sharing with the USA and are revoking health care rights for Canadians that spend too much time in the USA. Vice versa, the USA will be questioning citizens that spend too much time in Canada (looking for foreign revenue).

[Dsanduril]

Originally Posted by travellerw

I'm gonna have to disagree with this completly.. I own a company that sells products all over the world. We also broker sales between multiple countries. I do not require my clients to sign an affidavid that they recieved those products outside of Canadian soil.
Its up to me, the business owner to report where I sold the product too and where I shipped it.

The point is... YOU have to report it to your government.. The guys in Holland report it to THEIR government. The guys in Holland don't have to report it to the US government. I'm sure they would stop dealing with you if they did have too.

It seems like you're making the point yourself. You (or the seller) hired a broker in Florida. Presumably that broker got paid something as part of this deal. Since that broker got paid, he is going to have to report that to his government. In Florida that government is going to presume that if he got paid for selling (or buying a boat) then that transaction took place in Florida (pretty much every government makes the presumption that nets them the most in taxes). If it didn't, and they audit him, they'll want some kind of documentation that says it didn't. Wow, imagine that. That's all the broker has asked for, a document stating you didn't buy the boat in Florida.

You say you've done business in Canada, and that you just tell your government what business you've done. Do they trust and believe you 100%? I doubt it (not my experience with the Canadian government or any other). You run the risk of audit. And if you claim that you don't owe taxes on certain sales they'll probably want to see proof of shipping. Or some other documentation that for some reason you don't owe taxes. And if you can't provide that documentation they'll assume you lied. Then you owe the taxes and the penalties.

Works the same way pretty much everywhere in the world, no difference here. The broker won't have anything like Fedex records or other shipping information to show he transferred something to you not in Florida. All he is requesting is something to show his government if and when it comes calling.

[travellerw]

I guess the contract signed by both parties stating the place of transfer is not good enough? Pretty sure that would work for any type of business transaction here in Canada.

Forcing an extra document (clearly written for US citizens) that requires notarizing is just asinine, bureaucratic and wasteful. Not to mention should be openly communicated with the buyer at the time of offer!

That is my point!

[hellosailor]

There are what may appear to be some odd state tax laws in our Federal Republic. In some cases, i.e., a broker is required to collect sales tax, when a private seller is not. Brokers are licensed, by the county and/or state, and the state tax laws COULD very conceivably say that they MUST collect tax unless they have specific "proof" that the sale is exempt. So, the broker might just be using a procedure that covers his ass in all cases and makes his processing uniform and happy for the tax men. Or, he might be an anal compulsive paranoid.


You could start with one of the official florida .gov web sites, their tax department has one, their motor vehicles dept. has another (which will cross-reference sales and taxes on motor vehicles including boats) and there must be a division or professional licensing which can tell you if the broker is licensed and if there are some regulations that would affect this with him.


Now, if you just went down to Cuba and bought your boat there I'd agree with you that this is all horsepuckey. But since you've involved a US broker who has to comply with US and state tax laws, regardless of what he does and where he does it...Odds are it isn't crazy at all. You'll do a lot of research and find out what? That if you want the broker to complete the sale, you're gonna have to send him that form anyway?


Yeah, I know, getting anything notarized can be a RFPITA here too. "The notary is out to lunch...is off today...can only notarize bank business..." Sometimes it can take a week to do a five minute transaction.