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KevinE · 17-07-2012, 05:16

Just got the final statement on our boat sale - they charged their 10% commision but also added $195 "Closing Agent Fee" for one more stab at the ribs but more importantly it seems WE are paying 6% Florida Sales Tax on the brokers commision.
Is this right?

**skipmac** · 17-07-2012, 05:37

If you are registering the boat in FL and paying FL sales tax on the boat then the broker's commission will be included in the selling price of the boat.

KevinE · 17-07-2012, 05:54

I am the seller - does the seller pay the tax on the brokers commision?

**skipmac** · 17-07-2012, 06:17

Oh, you're the seller. Should have paid closer attention to your first post. It did mention sale and not purchase.

If you're a FL resident you probably know the state is picky about the sales tax and that some of the issues are not clear or not clearly understood even by businesses. I was a broker but it was over 30 years ago but I don't recall charging sales tax on our commission. Last time I dealt with sales I worked at a computer shop. There we had to charge sales tax if there were any parts or goods involved in a repair or installation but if labor only we did not. This was also a few years ago and the rules might have changed.

I also called my father-in-law who is a real estate broker and sales tax is certainly not charged on commissions there but then a home sale is not subject to sales tax where a boat is.

I am guessing here but if the buyer is keeping the boat in FL he or she will have to pay FL sales tax on the total value of the purchase price so they will be paying sales tax on the commission. If the broker is also charging you it sounds like a double tax. I think I would question this charge or at least get a second opinion from another broker.

hellosailor · 17-07-2012, 08:04

Kevin, if your contract provided for an additional "closing costs" or whatever, the broker is entitled to it. If it wasn't in your contract--they probably aren't.

Either way, whoever pays that fee should also be paying whatever taxes apply to that fee. If FL says there is sales tax on a broker's fee, and you paid the fee, you'd have to pay the tax.

Paul L · 17-07-2012, 08:30

The buyer pays sales tax, not the seller. This sounds fishy. Here's a decent writeup on FLA boat sales and tax
http://dor.myflorida.com/dor/forms/2010/gt800006.pdf
I'd call up the FL tax folks and ask them. Let us know what happens.

S/V Illusion · 17-07-2012, 08:35

Sales tax in Florida, like most other states, is charged on tangible goods - not services. If anyone paid sales tax on a service in Florida, that is a rip off.

Regardless, the buyer is responsible for all sales taxes.

As to the "closing agent fee", please let us know who the broker is. That is the most unscrupulous, greedy and unprofessional dirty trick I've ever seen and no one should ever deal with such a clown. It's not uncommon for a broker to LOWER his commission as a gesture of good will; doing the opposite and adding insult to injury by charging still more disguised as some "fee" for pure profit should not be rewarded by anyone doing business with him.

**David M** · 17-07-2012, 08:47

Quote:

Originally Posted by S/V Illusion

As to the "closing agent fee", please let us know who the broker is.

Please do not name names regarding the broker. This is against forum policy because there are always two sides to a story, and because of other issues.

Thanks

Tony B · 17-07-2012, 09:01

A "Closing Agent Fee" and Florida Sales Tax are two totally different animals.
I assume that since you put "Closing Agent Fee" in parenthesis that is what the charge is for and you then 'think' it is a Florida Sales Tax on the commission which may not be true.
A closing agent fee is usually discussed ahead of time and should be listed in your original contract. Nothing is usually set in stone as to who pays this fee whether it be the buyer or seller. This closing agent fee is usually for verification of clear title and similar related items and gets the boat properly registered in the new owners name. Normally, the buyer pays such costs. I as a buyer would not feel comfortable with a closing agent working for the seller.

KevinE · 17-07-2012, 19:33

Broker got back to me regarding the sales tax - it was a "mistake" on the invoice (worth over $1,500). Check the paperwork!!! I was almost ready to accept the invoice for face value - good thing I double checked it.

**skipmac** · 17-07-2012, 19:39

Congratulations.

So now with that extra $1,500 you're going to throw a party for all the helpful folk on the forum?

hellosailor · 17-07-2012, 20:23

What a lucky broker. In most states it is a serious charge of fraud to incorrectly charge or collect sales tax that way. A cynic might report it and ask the tax men to audit all of his records for the past year just to start with. Which might just confirm an honest mistake. Or....

avb3 · 17-07-2012, 22:12

Quote:

Originally Posted by hellosailor

What a lucky broker. In most states it is a serious charge of fraud to incorrectly charge or collect sales tax that way. A cynic might report it and ask the tax men to audit all of his records for the past year just to start with. Which might just confirm an honest mistake. Or....

Or.... it might be an interesting negotiation point (be careful of blackmail though) with the broker of perhaps a, shall we say, "buyer inducement refund". You know, out of the kindness of his heart.

S/V Illusion · 18-07-2012, 05:41

Brokers don't make those kind of "mistakes". You would be doing everyone a favor if you reported that to the AG's Fraud investigation office in the appropriate state.