Sales Tax and Boat Registration

I've searched this forum and came across numerous posts on paying sales tax but still confused as ever. Would appreciate help with the following questions:

1. I am not a resident of Florida so if I buy a boat outside of FL does it matter what state I register it in?

2. Does that state that I register the boat in have to be the same state as my current home residence?

3. Do you have to pay sales tax in the state you bought it in or is it correct that if you move the boat out of that state within x number of days you are ok?

4. Is the state that you register the boat in the same state that you will be paying that state's sales tax?

5. Is it correct that if I buy a boat outside of Florida and do not enter FL for 6 months than that is ok? What happens if I enter FL within 6 months?

6. If I buy a boat outside of FL and do not enter FL for at least 6 months, how long can I stay in FL? After x days will I need a permit of some sort?

7. For Florida, do the time requirements start over for each year, or for example, after I wait the initial 6 months do I have to do that every year?

8. If I plan to be in FL for 4 or 5 months of the year, would it be easier to just register the boat initially in FL and pay the FL sales tax? Would I have to be a resident of FL to do this?

Thanks for any information!!

sammy999 said:

I've searched this forum and came across numerous posts on paying sales tax but still confused as ever. Would appreciate help with the following questions:

1. I am not a resident of Florida so if I buy a boat outside of FL does it matter what state I register it in? You generally register the boat in the state where you use it the most.

2. Does that state that I register the boat in have to be the same state as my current home residence? No not relevant, see answer 1, except for California. They will make you prove with marina and fuel receipts that you didn't use it there if California is your home residence.

3. Do you have to pay sales tax in the state you bought it in or is it correct that if you move the boat out of that state within x number of days you are ok? You are correct. Most states give you 30-90 days to move it to another state.

4. Is the state that you register the boat in the same state that you will be paying that state's sales tax? Yes because that is the state that you use the boat in.

5. Is it correct that if I buy a boat outside of Florida and do not enter FL for 6 months than that is ok? What happens if I enter FL within 6 months? Nothing unless you stay in Florida more than x (I think it is 3 months). Then you may be required to register.

6. If I buy a boat outside of FL and do not enter FL for at least 6 months, how long can I stay in FL? After x days will I need a permit of some sort? See answer 5.

7. For Florida, do the time requirements start over for each year, or for example, after I wait the initial 6 months do I have to do that every year?

8. If I plan to be in FL for 4 or 5 months of the year, would it be easier to just register the boat initially in FL and pay the FL sales tax? Would I have to be a resident of FL to do this? It sounds like Florida will be your principle place of use so it would be best to register and pay your sales tax there in the first place.

Thanks for any information!!

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In general you register and pay your sales tax (if any) in the state where you principally use it. If you register it in Maryland for example and pay your sales tax and then take it to Florida for 5 months you will be in a grey area. I think Florida makes you prove that you have registered it and payed sales tax elsewhere. Otherwise they want you to do it their state.

Bottom line is that if you are going to have to pay sales tax in some state, you might as well do it in Florida if you are going to be there a big part of the year as they are anal about it.

But if it is a lot of money, don't take my or anyone else's advice.

David

Some states have a reciprocal sales tax agreement. Maryland and Florida have such an agreement. As FL resident I paid sales tax to FL. If I want to register the boat in MD, I need only pay the difference between what I paid in FL and what MD would normally charge me.

Some states have a tax requirement if you are a resident of that state. As a FL resident I must pay the entire sales tax to FL even if I register it first in MD. This only applies to boats I purchased after I became a FL resident, not the ones I owed before I became a FL resident.

The period of time you can remain in a state without paying their use / sales tax varies from state to state.

If you Google "FL boat sales tax", you can see the rules for FL or any other state you insert.

Ted

We're South Dakota residents, bought a boat in Massachusetts. We researched the tax laws very carefully - it's not a superyacht by any means, but doing the transaction carefully can make a difference of thousands of dollars even on a relatively modest boat - if you care to be perfectly compliant and technically precise. For our purchase it meant (1) the title had to pass here in SD, not Mass. (2) We can't take delivery or physical possession in Mass, so we're paying to have it delivered to us outside Mass. (3) We paid full sales taxes in SD. (4) Of course once we sail and then truck it home we expect to use it primarily in South Dakota and it might never be in Mass ever again.

I really don't have a good sense of how much private party buyers sweat all these details, but I don't want any expensive surprises and I'm a public official here so I wanted to avoid any John Kerry difficulties (remember he caught a pile of grief for keeping his boat in RI to avoid brutal MA taxes). My point is that your questions are highly dependent on the tax laws and tax relationships of the two states involved. Nothing's simple.

I got a Texas boat dealer license and put the boat in inventory for resale, eliminating the need to pay sales tax.

It was actually pretty easy to get the license, and saved me about $10000.

You've created a thousand part question as what other state is involved is important, how long you're going to keep it there. Then there are considerations like property taxes that may come into play in some states. Every state has different rules.

Sammy999

This link may help clear things up for you.
http://dor.myflorida.com/Forms_library/current/gt800005.pdf

Besides the sales tax if your boat is in Florida waters for 90 days you must register it with the county tax collecter.

The following is from Official Website Florida Department of Highway Safety and Motor Vehicles

"Florida recognizes valid registration certificates and numbers issued to visiting boaters for a period of 90 days. An owner who intends to use his vessel in Florida longer than 90 days must register it with a county tax collector. However, he may retain the out-of-state registration number if he plans to return to his home state within a reasonable period of time."

If you're berthed in a California marina on January 1, the state will attempt to collect the following fiscal year's (July-June) property tax even if you sold it subsequent to Jan. 1. Also, pick your county carefully. Property taxes vary widely. For instance, keeping my boat in Solano County with a 1.1% tax rate compared to my across-the-strait home county Contra Costa with 1.5%.

We bought our boat in Fl. We had 10 days to remove it or pay sales tax. We could have opted to pay $20 dollars and stayed 90 days. We opted not to and had to prove we moved it to another state. Since we domicile in Alabama we would have had to pay sales tax there. Instead we opted at purchase to document the boat with a Mississippi home port. Mississippi does not require Federal Documented vessels to register in the state. We do really keep it in Ms. It's only about 1 1/2 hours from us so it's not a big deal. Over all it saved us a lot of money to spend on something else. After a year we could go back to Alabama and not pay sales tax (in our case 10%). We did this with several previous boats and it has worked out fine. I know there are other states that might have the same rules. FYI there is an empty slip next to us! ����

Sales tax in South Carolina is topped out at $300, but property tax is another issue.

Threads like this pop up on boating forums every week - but the previous post is correct, the answers to some of the questions even come down to the county you're in. No consistency whatsoever - for example, the Mass sales taxes would have been $3600, SD was $1000. Costs me $40 to register the boat each year here. $40 a month to insure it. Of course the nearest salt water is about 1400 miles away.

sammy999 said:

5. Is it correct that if I buy a boat outside of Florida and do not enter FL for 6 months than that is ok? What happens if I enter FL within 6 months?

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If you own AND USE the boat outside of Florida, in a state or territory of the U.S., for more than 6 months then when you bring the boat to Florida you will not owe sales or use tax. The "and use" part is important, because some people have tried just storing their boat outside of FL for 6 months and a day, and then claim exemption from use tax. The authorities are onto that, and may ask for proof that you used the boat on a regular basis (not just once!) during the 6 months.

sammy999 said:

6. If I buy a boat outside of FL and do not enter FL for at least 6 months, how long can I stay in FL? After x days will I need a permit of some sort?

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After 90 days you will be required to register the boat in Florida. The fees for annual registration are very reasonable.

sammy999 said:

7. For Florida, do the time requirements start over for each year, or for example, after I wait the initial 6 months do I have to do that every year?

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Sales/use tax is a one-time thing. Registration is annual. You pay (or avoid) the sales/use tax once and you are done. Each year that the boat spends more than 90 days in Florida, you will have to register it. Again, the registration fees are very reasonable--less than $200/yr unless you own a megayacht.

sammy999 said:

8. If I plan to be in FL for 4 or 5 months of the year, would it be easier to just register the boat initially in FL and pay the FL sales tax? Would I have to be a resident of FL to do this?

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Florida is happy to receive your tax dollars whether you are a resident or not. If you spend 4 months in FL every year, you are going to have to register it here every year. Whether or not you should (or must) pay sales/use tax in Florida depends on where you are coming from, how long you own and use the boat before bringing it to Florida, as well as other considerations. For example, if you are bringing it from someplace that charges more sales tax than FL does, I would move it here quickly, pay FL, and avoid paying in the other state. But these are details that depend on a lot of variables, so you will have to figure that out.

Seems fairly common among states that if a boat is used in their waters for more than something like 90 days, it needs to be registered there. So what's to do if you sail for several months a year in two or more states. say Maine in warm season and Florida in cool season. Would one need to be registered in all those states with boat wearing multiple registration numbers? Same for the boat's dinghy if motorized.

markpierce said:

Seems fairly common among states that if a boat is used in their waters for more than something like 90 days, it needs to be registered there. So what's to do if you sail for several months a year in two or more states. say Maine in warm season and Florida in cool season. Would one need to be registered in all those states with boat wearing multiple registration numbers? Same for the boat's dinghy if motorized.

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The following is from Official Website Florida Department of Highway Safety and Motor Vehicles

"Florida recognizes valid registration certificates and numbers issued to visiting boaters for a period of 90 days. An owner who intends to use his vessel in Florida longer than 90 days must register it with a county tax collector. However, he may retain the out-of-state registration number if he plans to return to his home state within a reasonable period of time."

Greetings,
Mr. R2G. The statute you cite coupled with Mr. d's comment (post #12) would suggest if you did not USE your boat (simply stored the vessel) you would not be libel for taxes. Hmmm...I don't think the tax folks would accept my interpretation...

RT Firefly said:

Greetings,
Mr. R2G. The statute you cite coupled with Mr. d's comment (post #12) would suggest if you did not USE your boat (simply stored the vessel) you would not be libel for taxes. Hmmm...I don't think the tax folks would accept my interpretation...

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Actually that is intentional to allow boats to be brought to shipyards for repair or refit and not require registration.

RTF,
I don't think they would ether. They seem to have quite an appetite for $$$$.

Although I am very happy with my $5 a year registration fee. They are not very hungry in that area.

Bay Pelican was registered in Illinois and Florida for almost two years.

With taxes like this, you need to look at two different things, and that's one of the reasons it gets confusing. The considerations are "Where is the boat?", and "What state are you a resident of?". Where you really need to be careful is when those two align since it often means sudden death with regard to taxes.

1) Where is the boat?

1a) What state was it purchased in? This is where the transaction occurs (title changes hands). Some states tax any transaction that takes place in the state, where others have provisions to waive the taxes if the boat is going to be removed from the state. Then there are rules on how soon it needs to be removed.

1b) Where will the boat reside? This can be fuzzy because boat by their very nature move. But typically you need to make a judgement call and pick a home state. Just pick one that you can justify, and one where there isn't a stronger argument for being somewhere else. This is the state who's registration rules you would follow, and to whom you would pay taxes.

1c) For boats that move around a lot, the question of where it resides becomes even less clear. I think every state I have dealt with has some set of rules about how long you can be in the state before they declare that you are not just passing through, but are there to stay. And once they decide you are there to stay, they want taxes and they want you to comply with their registration rules. In most cases they will recognize taxes already paid in another state and only collect the difference if their rate it higher than what you already paid. The visitation time ranges from 30-120 days, and many states have provisions to extend whatever minimum time they grant.

2) Where are you a resident?

2a) I don't know of any state that taxes things that are purchased out of state, and they are kept out of state. So if you buy your boat somewhere else, and keep it somewhere else, you don't need to worry about your residency state charging you any taxes.

2b) Your residency state will want taxes if your boat ever enters the state, and the key is that the rules are different for residents that for visitors. I know of a number of states where tax is triggered immediately when your boat enters the state. Sometimes the entire tax is due (with credit for taxes paid elsewhere) no matter how old or new the boat is. Other states have specific durations of out of state ownership that will exempt you from tax. Others are fuzzier and someone needs to prove that you "intended" to bring the boat into your home state. But be aware that the rules are different when you bring a boat into your residency state as compared to when a non-resident bring a boat in. I know a guy who is a Washington resident who purchased and owned a multi million dollar boat outside Washington for a couple of years. He later brought the boat into Washington thinking he was entering based on the visitor rules, only to find that as a resident tax was immediately triggered and due. Ouch!

So these are the things to look at. Of course every state is different, but if you know the questions to ask, it's not too hard to sort out the specifics of your situation. And this is a consideration for long term cruisers as well. You basically need to keep moving or each state that you visit will start to view you as a new resident and want you to pay up.

The rules do vary from state to state. California tries to get taxes on you for anything.
When we moved to Washington State we had to show that we paid sales tax in the state where purchased. If the purchase state was less than Washington State base tax or none at all, then you had to pay the difference between Washington State sales tax and the original purchase state. Doesn't matter how long you have owned the boat.
This is to keep people from purchasing in Oregon where there is no sales tax and then waiting 3-6 months before registering it in Washington to get around paying Sales Tax. They were loosing far too much revenue.
Before we moved up here use to hear how Washington over taxed their population. The sales tax is around 9% depending on location but they don't have State Income Tax. Also, in California my boat and cars to register cost me a heck of a lot more than here in Washington.

Twisted - that is very nice concise and understandable summary.

Quote:
2a) I don't know of any state that taxes things that are purchased out of state, and they are kept out of state. So if you buy your boat somewhere else, and keep it somewhere else, you don't need to worry about your residency state charging you any taxes.

Be careful, while the statement is true in part, it may not be true if you register your boat in your home state. The registration process may require payment of the use tax (sales tax alternative).

Papa Charlie said:

The rules do vary from state to state. California tries to get taxes on you for anything.
When we moved to Washington State we had to show that we paid sales tax in the state where purchased. If the purchase state was less than Washington State base tax or none at all, then you had to pay the difference between Washington State sales tax and the original purchase state. Doesn't matter how long you have owned the boat.
This is to keep people from purchasing in Oregon where there is no sales tax and then waiting 3-6 months before registering it in Washington to get around paying Sales Tax. They were loosing far too much revenue.
Before we moved up here use to hear how Washington over taxed their population. The sales tax is around 9% depending on location but they don't have State Income Tax. Also, in California my boat and cars to register cost me a heck of a lot more than here in Washington.

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Doesn't WA charge you sales tax and then puts a hefty excise tax on top of that?

Alaskan Sea-Duction said:

Doesn't WA charge you sales tax and then puts a hefty excise tax on top of that?

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There was no additional taxes at time of purchase other than Sales Tax. I have to pay a tax every year on the registration of the boat. For my boat it averages about $450 right now but diminishes each year according to their value chart. Plus you have the Lease Hold tax that you pay on the slip rental that amounts to 12.5% and is included in your rent payment to the marina as required by Washington State Law.

Alaskan Sea-Duction said:

Doesn't WA charge you sales tax and then puts a hefty excise tax on top of that?

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Basically the same as property tax in other states. It's .005 times the fair market value with a minimum of $5. So for a $250,000 boat it would be $1250 per year. A little less than half what property tax would be in California. Infinitely more than Florida.

Now the OP has left us holding. Everyone giving all sorts of information, much of it not at all relevant to his situation as he's never come back to tell us what his situation is. We could help him much more if he'd share what state he's talking about, what the timing is.

Bay Pelican said:

Quote:
2a) I don't know of any state that taxes things that are purchased out of state, and they are kept out of state. So if you buy your boat somewhere else, and keep it somewhere else, you don't need to worry about your residency state charging you any taxes.

Be careful, while the statement is true in part, it may not be true if you register your boat in your home state. The registration process may require payment of the use tax (sales tax alternative).

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Thanks. Good point.

BandB said:

Basically the same as property tax in other states. It's .005 times the fair market value with a minimum of $5. So for a $250,000 boat it would be $1250 per year. A little less than half what property tax would be in California. Infinitely more than Florida.

Now the OP has left us holding. Everyone giving all sorts of information, much of it not at all relevant to his situation as he's never come back to tell us what his situation is. We could help him much more if he'd share what state he's talking about, what the timing is.

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Makes me happy to live in Florida with an antique vessel registration ($5 a year). I have been working in LA for the last couple of months with probably one more to go. I can not believe the taxes out here. I will be glad to get home.

Greetings,
Mr. R2G. Your comment regarding antique boat registration raises an interesting point. Our vessel is a documented vessel with an out of state (not FL) hailing port. It is also 36 years old thereby qualifying for "antique" status. Hmmm...So, if I register in FL as an antique vessel I might get away with $5/ year rather than a hefty yearly fee....Hmmmm.....Nope, doesn't sound like THAT would work either.

READY2GO said:

Makes me happy to live in Florida with an antique vessel registration ($5 a year). I have been working in LA for the last couple of months with probably one more to go. I can not believe the taxes out here. I will be glad to get home.

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What is the age for antique vessel status in Fla. ? This brings up an interesting thought as many of us have boats that may or may not be heading into that category.

mbevins said:

What is the age for antique vessel status in Fla. ? This brings up an interesting thought as many of us have boats that may or may not be heading into that category.

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The vessel needs to be 30 years old and have the original "type" of propulsion. If it came with an inboard and you removed it and put an outboard on it. It does not qualify. If you repowered from gas to diesel it does not qualify. That is pretty much it.