Sales and Use Tax on Boats: Information for Owners and Purchasers

What in-state and out-of-state boat purchasers need to know.

What is Taxable?

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Sales Tax

All boats sold and/or delivered in this state are subject to Florida's 6 percent sales and use tax, unless specifically exempt. Generally, Florida boat dealers and yacht brokers are required to collect tax from the purchaser at the time of sale or delivery. All sales of boats between individuals are fully taxable if the sale and/or delivery occurs in Florida.

If a boat is delivered into a county that imposes a discretionary sales surtax, then the dealer must also collect this tax. Discretionary sales surtax applies only to the first $5,000 of the purchase price.

Use Tax

Use tax is a component of Florida's sales and use tax law. Use tax applies to taxable goods and services that are brought into the state untaxed or taxed at a rate less than Florida's 6 percent rate. Discretionary sales surtax is also due on the first $5,000 of these purchases.

The "use" component of Florida's sales and use tax law provides uniform taxation of items purchased outside Florida but stored or used in this state. A credit for lawfully imposed taxes paid to another state, a U.S. territory, or the District of Columbia is permitted. Credit is not given for taxes paid to another country.

Example: If a boat is purchased in a state that has a sales tax rate of 4 percent, the owner may be required to pay an additional 2 percent when the boat is brought into Florida.

Under most conditions, use tax is due on boats brought into Florida within 6 months from the date of purchase. However, use tax may be due immediately upon importation into Florida, under either of the following conditions:

• The boat is owned by a Florida resident.
• The boat is owned by a corporation and used by a corporate officer or director who is a Florida resident or who owns, controls, or manages a dwelling in Florida.

Use tax may become due when a boat is required to be titled and/or registered in Florida. Florida titling and/or registration is required:

• Within 30 days after purchase.
• Within 90 days after the boat enters Florida, if it is currently documented, titled, and/or registered in another state.

A boat that remains in Florida for more than 90 consecutive days or more than 183 days in a one-year period is presumed taxable, unless it qualifies for another exemption.

To report use tax due to the State of Florida on the purchase of a boat, the owner should complete an Ownership Declaration and Sales and Use Tax Report (Form DR-42B). See the back panel for information on obtaining forms.

Use tax is not due on boats brought to Florida if all of the following conditions are met:

• The owner has owned the boat 6 months or longer.
• The purchaser has shown no intent to use the boat in Florida at or before the time of purchase.
• The boat has been used 6 months or longer within the taxing jurisdiction of another state, U.S. territory, or the District of Columbia. Time spent in foreign waters does not count as part of the 6-month period.

Specific Exemptions Boats Sold to Nonresidents

A boat may be purchased tax-exempt if it is sold by or through a registered boat dealer or yacht broker to a nonresident who will remove the boat from the state.

The following requirements must be met:

• The purchaser must sign an affidavit stating that he or she has read the law and rules regarding the specific exemption claimed and agrees to remove the boat from Florida.
  • A boat of less than 5 net tons of admeasurement must leave Florida within 10 days of purchase or immediately be placed in the care, custody, and control of a registered repair facility for repairs, additions, or alterations. The boat must leave Florida within 20 days after completion of the repairs.
  • If the boat is 5 net tons of admeasurement or larger, the purchaser may obtain a set of Florida Department of Revenue boat decals, which authorize the boat to remain in Florida waters up to 90 days after purchase. The decals can be obtained from the selling dealer or broker. This 90-day period may not be extended for any reason.
• Within 5 days of the date of sale, the dealer must provide DOR with a copy of the invoice, bill of sale, and/or closing statement; and the original, signed, removal affidavit.
• Within 10 days of removing the boat, the purchaser must furnish DOR with proof that the boat left Florida. Receipts for fuel, dockage, or repairs purchased outside Florida are acceptable proof, if they identify the boat.
• Within 30 days of removal, the purchaser must provide DOR with written proof that the boat was licensed, titled, registered, or documented outside the state; or provide evidence that he or she has applied for such.

This exemption does not apply to a Florida resident, an entity where the controlling person is a Florida resident, or a corporation where any officers or directors are Florida residents.

Foreign Flagged Vessels

Boats flying a foreign flag are exempt from Florida use tax if they have a current license to cruise issued by the U.S. Customs Service. Licenses to cruise are available only to boats flagged in countries that have a treaty with the United States. The boat will remain exempt as long as the provisions of the license to cruise are not violated.

Boats Imported for Sale

If a boat is imported into Florida for the sole purpose of sale at retail by a boat dealer or yacht broker who is registered with DOR, it will be exempt from use tax. The boat must be under the care, custody, and control of the broker or dealer and no personal use may be made of the boat during its presence in this state. For more information, see Technical Assistance Advisement #03A-051, Importing Boats Into Florida Solely for Sale. This is available in DOR's Tax Law Library.

Trade-Ins

Dealers or brokers registered with DOR may allow a credit for a trade-in. The taxable amount is the gross selling price minus the credit allowed for the trade-in.

To qualify for a trade-in credit, the following must apply:

• Only tangible personal property (not realty) can be accepted as trade-in credit for other tangible personal property.
• The sale and trade-in must be a single transaction and the trade-in must be taken into the selling dealer's inventory for resale.

Florida's Safe Harbor Act

Florida's Safe Harbor Act allows boat owners to bring their vessels into Florida for repair for up to 20 days per calendar year without paying tax on the boat's purchase price, if:

• The boat is docked at a repair facility registered with DOR; and
• The facility rents dockage or slippage space in Florida.

The 20-day time period begins on the day the owner first obtains dockage in this state. If the boat is placed in a qualifying facility for repairs, additions, alterations, refitting, or modifications, the 20-day time period is stopped while the vessel is undergoing repair. Once the repairs are complete, the owner has the balance of the 20-day time period to remove the boat from the state.

Mere storage of a boat in Florida will not qualify for the "safe harbor" exemption. A boat listed for sale, contracted for sale, or sold using a registered boat dealer or yacht broker may qualify for the exemption if sold while in this state under the safe harbor provisions.

Penalty and Interest

Anyone who purchases a boat and obtains a tax exemption under the nonresident removal provisions will be subject to use tax, discretionary sales surtax, interest, and penalties (including a mandatory penalty equal to the tax) if:

• The boat is not removed from this state within the specified time period.
• The boat returns within 6 months from the date of departure from the state.

A purchaser who attempts to evade tax by giving a fraudulent affidavit is subject to the tax due, interest, and a mandatory 200 percent penalty. The purchaser may also be subject to a fine of up to $5,000 and up to 5 years in prison.

If the boat dealer or yacht broker fails to furnish the required exemption information, the dealer or broker may become subject to tax, interest, and mandatory penalties on each transaction.

Inspections and Compliance

Tax compliance is an important aspect of boat ownership because it helps pay for services that benefit all boaters in this state. DOR conducts tax compliance inspections at marinas, repair facilities, and other docking sites on a regular basis. We also use many other sources of information to determine compliance.

Reference Material

Tax Laws

Call Taxpayer Services to request a copy of Rule 12A-1.007, Florida Administrative Code, Aircraft, Boats, Mobile Homes, and Motor Vehicles; Rule 12A-1.0641, F.A.C., Sales of Vessels Used in Interstate or Foreign Commerce or for Commercial Fishing Purposes; and Rule 12A-1.071, F.A.C., Rentals, Leases, or License to Use Tangible Personal Property. Tax laws are also available on DOR's Internet site. Look for the Florida Tax Law Library.

Dealers and brokers should read the brochure entitled Sales and Use Tax on Boats - Information for Dealers and Brokers.

For Information and Forms

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For detailed responses to your questions, contact:

Boat Enforcement Unit
Florida Department of Revenue
P.O. Box 6417
Tallahassee FL 32314-6417
Telephone: 850-487-3273
Fax: 850-487-0969

Information and forms are available on our Internet site at www.myflorida.com/dor.

To speak with a Department of Revenue representative, call Taxpayer Services, Monday through Friday, 8 a.m. to 7 p.m., ET, at 800-352-3671.

Persons with hearing or speech impairments may call the TDD line at 800-367-8331 or 850-922-1115.

To receive forms by mail:

• Order multiple copies of forms from our Internet site at www.myflorida.com/dor/forms or
• Fax form requests to the DOR Distribution Center at 850-922-2208 or
• Mail form requests to:
  

  Distribution Center
  Florida Department of Revenue
  168A Blountstown Hwy
  Tallahassee FL 32304-2702