Are you familiar with Florida’s sales tax law? If you’re a boater, you’d probably rather be out cruising on the crystal-blue Florida waters than thinking about taxes. That said, it’s great to be a boat buyer for center consoles in Florida. Nine years ago, Florida implemented a tax cap on boat purchases that is still in effect today. That’s good news if you’re in the market for a high-end center console vessel! Below, we’ll go into more detail about how you can benefit from the current regulation.
Current Tax Law & How You Can Benefit
Currently, Florida has a sales and use tax for boats which is set at 6% of the purchase price. However, Florida caps the total tax amount due on a vessel at $18,000. This tax cap law went into effect July 1, 2010, and is still in effect today. If you’re in the market for a boat valued at $300,000 or more, you can reap serious tax savings on your next purchase.
Prior to this law, buyers of boats priced above $300,000 began to take their business to other states and countries with lower taxes. After years of extensive lobbying in Florida, the $18K tax cap law finally passed. Today, this law has generated significant tax revenue for the State of Florida. Experts suggest it has even helped create and protect jobs in the Florida marine industry.
Dodging Tax Laws with Offshore Registration
Before this law was passed, boat owners who wanted to enjoy Florida waters but avoid Florida’s taxes had several legal ways to do so. First, if they were non-Florida residents, they could bring the boat to another state for part of the year, then bring it back to Florida during the colder months. This worked great for sportfishers, snowbirds, and other folks who tend to migrate with seasons anyway.
Another common scenario for larger boats was registering offshore, which can be costly. In this instance, the boat owner would bring the boat back to Florida under an annual cruising permit from the U.S. Coast Guard. Under this permit, the boat could stay in Florida (or anywhere in the U.S.) for up to one year. The boat was then required to leave U.S. waters and enter a foreign port, at which point they could turn around and apply for a new cruising permit.
Who Is Benefitting from the Changes
So far the $18K tax cap has been a positive change for the State of Florida. There have been a range of benefits for the state of Florida, Florida residents and the marine industry. For one, the State of Florida has seen an increase in tax revenue since the law has passed. This includes tax revenue on boat purchases, but also on boat products, services and even the tourism industry.
Boat brokers have seen a major jump in boat sales since the law’s passing. Marinas and marine workers have also benefited, as there has been an increase in boats coming and staying in Florida that would not otherwise do so. The law has also encouraged boat owners to operate and keep their boats in Florida for longer periods of time. With more boaters spending time in the area, there has been an increase in marine products and services.
Additionally, the tourism industry in Florida has seen the benefits as tourist dollars have increased since the law’s passing. Boat owners spending time in Florida tend to enjoy local restaurants, breweries, hotels and transportation services.
All in all, the $18K tax cap has been a benefit to boat buyers and boat sellers alike. If you plan on making buying a high-end center console at or above $300,000, Florida is a great place to do so with this generous tax law in place.
EVOLUTION – We’ll Help You Navigate the Tax Law
Ready to take advantage of this sales tax law to save on your next high-end center console purchase? Let us be your guide. Give EVOLUTION a call today at (561) 799-9505 or contact us on our website!