Section 212.06(8)(a) of the Florida Statutes provides that "Florida Use tax will apply and be due on tangible personal property imported into Florida for use, consumption, distribution, or storage to be used or consumed in this state, however, there is presumption that tangible personal property used in another state for 6 months or longer before being imported into Florida was not purchased for use in Florida."
How does a boat dealer or Florida licensed yacht broker import a boat into Florida for sale? If a boat is brought into Florida for the sole purpose of sale by a boat dealer or Florida licensed yacht broker, it will be exempt from Florida Use Tax. The boat must be under the immediate care, custody, and control of the boat dealer or Florida licensed yacht broker and no personal use may be made of the boat during that time.
The majority of Central Listing Agreements ("CLA") specifically state that the Listing Broker does not assume and is not delegated care, custody and control ("CCC") of the boat. To avoid exposing the boat owner to Florida Use Tax, obtain a written Addendum to the CLA, giving the Listing Broker the CCC of the boat. Within the CCC Addendum, state that the owner agrees that there shall be “no personal use of the boat while the boat is under the CCC of the Listing Broker.”
All activities with respect to the boat while in Florida must be related solely to the sale. The boat dealer or Florida licensed yacht broker may board, show and/or demonstrate the boat to other brokers or prospective purchasers. The owner may maintain a Captain/crew onboard the boat, so long as the Captain/crew’s primary duties would be to operate the boat, to attend to the security and upkeep of the boat and to maintain it in a clean and attractive working condition. A special ship’s log must be maintained that will document every occasion on which the boat leaves and returns to its berth. There must be no personal use of the boat by anyone, including owner, family members, Captain, crew and/or brokers.
Violation of the CCC Agreement could result in Florida Use Tax liability on the boat. Florida Department of Revenue ("DOR") would look solely to the boat owner for payment of the tax liability, and not to the boat broker or the Florida licensed yacht broker. However, the DOR would request that the boat dealer or Florida licensed yacht broker notify the DOR of the owner’s breach.
Remember that CCC Agreements protect boats from the liability of paying Florida Use Tax. CCC Agreements DO NOT satisfy any Federal issues that the boat may have concerning US Customs’ Duty. A Boat Show Bond DOES NOT protect the boat from being liable for Florida Use Tax.
*The information offered in this column is a summary in nature and should not be considered a legal opinion.
**Danielle J. Butler is a Partner and Maritime Attorney at Hill Betts & Nash. Ms. Butler handles both transaction and litigation matters within the yachting community. She may be contacted at +1 786 543 1141 or by email firstname.lastname@example.org