Rules of the Road: by Capt. Jake Desvergers
It’s that time of year again: boat show season. Events at Cannes, Genoa and Monaco previewed the strong sentiment that is expected at Fort Lauderdale, Antigua, and Miami.
With the recent proliferation of trade tariffs between the United States and the European Union, many colleagues and clients have inquired as to their effect on taxes. This is a very complicated issue and must always be discussed with one’s own attorney and accountant. Every situation and yacht are different.
However, with the Fort Lauderdale International Boat Show in full swing at the publishing of this column, a summarized refresher of taxes affecting boat sales in Florida is timely.
Sales and use tax
Under Florida law, all boats sold, delivered, used or stored in the state are subject to sales and use tax. Dealers and brokers are required to collect tax from the buyer at the time of sale or delivery.
Thanks to the efforts of the International Yacht Broker’s Association (formerly FYBA), the maximum tax on the sale of a vessel is $18,000. This limit was set back in 2010 and has proved to be very advantageous for both the state and yacht owners.
The maximum tax on the repair of a boat or vessel is $60,000. This cap is to be applied to each boat repair occurring in Florida. Subsequent and separate repairs are each subject to a $60,000 cap.
When is tax due?
Unless a yacht is exempt, it must be titled or registered with taxes paid within 30 days of the purchase date or the date the boat entered Florida; and within 90 days after the boat enters Florida when it is documented, licensed, titled, or registered in another state.
Penalty and interest
For those who feel they can avoid or circumvent these rules, be aware that the monetary penalties are severe. A buyer who attempts to evade tax by submitting a fraudulent affidavit is subject to the tax due, interest and a mandatory 200 percent penalty. The buyer is also subject to a fine of $5,000 and 5 years in prison.
Capt. Jake DesVergers is chief surveyor for International Yacht Bureau (yachtbureau.org). Comments are welcome below.