Tax on boats brought to Florida
We are planning on buying a 1996 Freedom sailboat in R.I. One of the appeals is that there is no sales tax on boats bought in Rhode Island. We will be keeping the boat in R.I. for 10-11 months.
Although I had called our county tax collector a month ago and been told that boats, like cars, were exempt from the 6% tax if they had been owned for longer than 6 months, I have been urged to double check. Below is what the FL website says about cars:
Motor Vehicle Registration
Florida''s 6 percent use tax applies to and is due on motor vehicles brought into this state within 6 months from the date of purchase. Use tax does not apply if a like tax equal to or greater than 6 percent has been lawfully imposed and paid to another state or District of Columbia.
It is presumed that a motor vehicle used in another state, territory of the United States, or District of Columbia for 6 months or longer before being brought into Florida was not purchased for use in Florida. To qualify for exemption from use tax, you must provide documents to prove that the vehicle was used outside Florida for 6 months or longer
However, I just went to Florida''s website for boaters and found this:
Initial Registration And Titling
Applications for vessel registration and title certificates are to be filed by the vessel owner with the county tax collector''s office . . . . If the sales tax on the total purchase price of the vessel has not been previously paid, the vessel owner must pay the tax along with the fees listed above. If the sales tax has already been paid, then the vessel owner should furnish the county tax collector with a valid receipt indicating where the sales tax was paid and that it was paid in an amount equal to or greater than the applicable sales tax.
Now, I don''t know whether the phrase "if the sales tax has already been paid" means in FL or means anywhere else. But this is a bit daunting.
Does anyone have any experience in this area. Anyone out there a FL broker who can help me? Our broker is based in MA and is not sure who FL works.
Thanks so much, Faith.
Faith Andrews Bedford
Tax on boats brought to Florida
Faith, these kinds of Q''s surface regularly on BB''s like this one...but surely we''re not the best source of info for you. You don''t state it outright but I gather you plan to buy and use the Freedom up in RI for a substantial period, then plan to relocate it to Florida for at least substantial periods of time, and you''re wondering what your tax liability will be down here in Florida.
Your first stop for such Q''s should be the county tax assessor where you plan to keep the boat. These offices are *very* familiar with the circumstances you describe, they can give you the official answers (after all, they administer those tax collections), and their answers can be documented by follow-up letter, brochure and/or website info, so you can be assured that what you are told by a single person is in fact valid.
If you haven''t had success when talking with a county tax assessor''s office in FL, consider calling the Pinellas County Tax Assessor (responsible for the St. Pete/Clearwater area) - you''ll find an easy start at http://www.taxcollect.com/Content.aspx?DeptID=12&CommandID=0&Lang=en I''ve found this office to repeatedly be helpful & professional. You don''t have to offer a name; just get to the right person and fire away!
FWIW I think you''ll find that use tax liability will exist for your vessel. But see what the experts say.
Its unfortunate that no one with first-hand experience with Florida’s application of use taxes has responded. You can find relevant info about the FL sales and use tax at: http://www.myflorida.com/dor/taxes/sut_boat_owner.html.
Frankly if the MA broker has been in business very long I expect he has full knowledge as to how the FL use tax will apply to you as a FL resident, but probably doesn’t think it in the interest of his pending sale to share any potentially bad news with you. So he says “what do I know…”. He’d have to be a neophyte not to know the tax facts for major East coast states.
Based on my reading the link above (which is a bit ambiguous in key spots), and on my unfortunately extensive personal experience in MA with the subject of boats and the use tax, I offer the following opinions:
- if you bring your boat into FL, the FL tax authorities will find you out and as a FL resident you will pay the use tax.
- At the time you pay that tax you will be subject to interest and penalties, both based on the last date that you can CONCLUSIVELY PROVE the boat was not in FL.
The tax authorities operate by their own sets of rules, not like some court of justice, you have no presumption of innocence – they proceed on the basis that you are guilty of anything you cannot conclusively prove otherwise…
As a FL resident at the time of the purchase I expect you will find that the out-of-state exemption and six months does not apply to you. I think the key statement in the above FL link is the following: “However, use tax may be due immediately upon importation into Florida, under either of the following conditions:
In MA (and I bet FL) harbormasters, marine police, environmental police and the dog-catchers are all enlisted in surveying boats located in mooring areas and marinas for tax compliance, the tax collectors never need to leave their offices. They look for a state registration sticker or a town mooring permit. To get one, you have to prove to the issuer you’ve paid your sales or use tax. If your boat doesn’t have one, the boat name goes to the tax collector. The tax collector finds your name and address and bingo, you get a mail notice with a use tax bill, including estimated penalties and interest with thirty days to pay.
Whether you have Federal documentation only factors into this by allowing you to avoid walking into the tax office to get a state registration. Florida does explicitly exempt documented boats for the state registration requirement. As I say above, why should they care, you cannot easily hide a boat, and they have their agents on the job.
I know the above is the way it plays in MA – my current boat is a documented vessel located in downeast Maine when I purchased her – on the way home from the closing I stopped at the MA DOR and paid the use tax.
You may have some wriggle room in FL, but it doesn’t look like it. If you cannot find an authoritive source,(orbrowbeat it out of the broker...), given the tax involved it may be worth hiring legal advice...
PS - Remember there's only two certainites in life, death and taxes...
FL is pretty strict. Some neighbors each purchased boats in FL to be brought back to VA. Once you purchase the boat you get about 90 days before the state of FL comes looking for the tax. FL resident or not after 90 days you owe it to the state of FL - period! As the SailingFool notes they want proof the boat left the state before 90 days. My neighbors used ated fuel recepits from GA on the way back home to prove the date they left FL waters. FL does enforce boat use tax even if you live there too. Just maybe the hardest state to cheat on the boat tax.
All states allow you to apply sales tax paid in another state as credit towards tax you may owe in a state you move to. No state will let you squat in a location as a non resident and not pay tax to someone. There is no such thing as buying some place and bringing it in to a new state and not oweing tax no matter how long you were in another state. If the state you pay tax in has a higher rate than the state you are moving to then you won't pay any more tax but you do have to file the use tax paper work else you owe 100%. Not filing even when you don't owe is bad news!
Best advice is to pay the tax owed where you live upon purchase else move some place else before you buy the boat. Keep the records so the your state will know you already paid something and will allow you to apply it if you can't move the boat in time. There is a time limit on how long the boat can sit outaide your state before the other state wants the money too. In your own state you owe the money the moment you buy the boat NOT when you bring it home. Penalties apply from date of purchase. It is always your job to provide the proof not up to them to prove you guilty. This is tax law not criminal law.
All this is about use tax (aka slaes tax). Personal property tax is yet a whole other deal.
Faith, it's a shame you didn't come back to clarify what your plans were. As it is, I see errors in each of the above replies WRT what I 'presume' your plans are.
Also, sales & use tax for boats is not administered by a State agency but rather than each county tax collector. Some of these county websites are done well, some are far less clear, and it's easy to be a bit misled even when going to your intended county's website because terms (e.g. "registration") mean different things depending on the circumstances.
There has been a lengthy discussion on this topic, originated by someone in CA who plans to come down to FL before leaving for the Caribbean, on the SSCA Discussion Board; you might find it helpful altho' this topic can quickly confuse since it isn't as simple as it might seem at first glance.
Why are you not registering your boat with the coastgard as a federal vessel or such. I'm not sure on how to do it but mine is... I purchased the boat already registered with the coastguard and just transfered it over to myself.
The draw back is the boat can only be sold to another US Citizen, but the upside is it isn't regulated by state law.
MJ...you are responding to an old thread...but to answer your question...federally documenting your boat does NOT relieve you from the obligation to REGISTER your boat OR pay sales and/or use tax on it. Some states do not have these taxes...but most do.
The only thing federal documentation permits you NOT to do is putting state numbers on the bow of your boat.
If you are in Provincetown Mass as per your header than hyou OWE sales/use tax to Massachusetts. Don't believe me...then have a look at this.
Pay particular attention to step#2 where they ask for your federal documentation as proof of ownership!
As near as I can figure...you owe the state of Massachusetts 5% of your boat purchase price + an $80 registration fee.
If you keep the boat out of state your costs may vary!
In some states federal documentation can be done in place of state registration. Massachusetts is such a state. However, regardless of whether it is documented or state registered, you do need to pay the taxes.
I am hoping to buy a boat in Florida but will need to move it outside the huricane zone before June.I am not an American citizen does anyone know if I will have to pay the sales tax in either state?
If you purchase a boat from a broker in Florida, regardless of who you are, the broker must legally collect (not "charge" but "collect") the sales tax UNLESS you qualify for an exemption. In Florida, as I understand it, what would only apply if the boat was not going to be registered in Florida, and was removed from Florida within 90 days, with no extension on that time.
You will find that state taxation and registration has nothing to do with your nationality, a "boat" with a permanently installed engine is usually classed as a "motor vehicle" and subject to the same laws (registration & tax) as a car here. You will also find that after living for 30 days in many (most? all?) states you may legally become a state resident/citizen. Even if that means "resident alien".<G>
Your best bet is to email (not telephone) or write to the Florida tax authorities and say "I am planning to" or "I may be" and present the situation to them asking about tax and other obligations. Don't rely on "some guy on the internet" or "someone I spoke to on the phone" get it in writing, from the tax authority.
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