Could a nonresident return a vessel to Florida for a boat show within six months of its tax-exempt removal without owing use tax?

Plain-English summary

The vessel could return to Florida for the boat show without triggering use tax if the owner obtained a U.S. Customs cruising permit upon reentry and complied with it. The Department treated a foreign-flag vessel operating under that permit as not having come to rest in Florida or joined the state's general mass of property.

The answer depended on the proposed use. The vessel would serve only as a display model, leave Florida after the show, and would not be sold, chartered, or listed for sale there by either the owner or the Florida seller.

This was an exception to the concern raised by the vessel's earlier tax-exempt purchase for removal. The owner had removed it from Florida, but wanted to return before six months had passed.

What this means for you

The ruling does not say every early return of a tax-exempt vessel is harmless. Its conclusion was expressly conditioned on obtaining the federal cruising permit and using the vessel consistently with that permit.

Commercial or disposition activity at the show—including selling, chartering, or listing the vessel—was outside the approved facts and could change the tax result.

Common questions

Q: Did returning within six months automatically create Florida use tax? Not on these facts. The compliant federal cruising permit kept the vessel from being treated as having come to rest or commingled with property in Florida.

Q: Could the vessel be displayed at the boat show? Yes. It was to be used as a display model for potential customers.

Q: Could the owner or seller offer it for sale or charter at the show? No. The ruling relied on their statement that neither would sell, charter, or list the vessel there.

Q: Did the ruling approve an indefinite stay? No. The stated plan was to remove the vessel from Florida after the show, and the answer was tied to that specific use and permit compliance.

Citations and references

• Fla. Stat. § 212.05(1) — Florida sales and use tax and the vessel-removal issue identified in the advisement
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 97A-067

Original ruling text

SUMMARY

The taxpayer is seeking advice on whether the taxpayer should be able to bring a vessel to the boat show in Florida without triggering a use tax liability.

We concluded that the owner should be able to bring the vessel to the boat show without triggering the use tax if the owner obtains a United States Customs Service cruising permit for the vessel upon first returning it to Florida. The Department recognizes that a foreign flag vessel in Florida waters under a Customs cruising permit, as long as it remains in compliance with the permit, is not subject to use tax because the vessel is not considered to have come to rest in Florida or commingled with the mass of property in Florida. As requirement of the permit, the taxpayer stated that neither the owner or Florida seller will be selling, chartering, or listing the vessel at the show. Therefore, as long as it is used in a manner consistent with the federal cruising permit, the presence of the vessel in Florida for this year's Boat Show, will not subject the vessel to Florida use tax.

Oct 17, 1997

Re: Technical Assistance Advisement 97A-067 Sales and Use Tax Return of Vessel Within Six Months of Purchase XXX ("Owner") Section 212.05(1), F.S.

Dear:

This response is in reply to your letter dated July 24, 1997, requesting the Department's issuance of a Technical Assistance Advisement ("TAA") pursuant to s. 213.22, F.S., and Chapter 1211, F.A.C., regarding the referenced matter and parties. An examination of your petition has established that you have

complied with the statutory and regulatory requirements for issuance of a TAA. Therefore, the Department is hereby granting your request for issuance of a TAA.

FACTS

The following facts have been provided to the Department:

Our firm represents [Owner].... [Owner] has no United States Federal Taxpayer Identification Number and is not a registered dealer in Florida....

[Owner] purchased the vessel "XXX" (the "Vessel") from
[Florida Seller] on May 19, 1997. [Owner], a "nonresident" within the meaning of Section 212.05, claimed exemption from Florida sales tax based on its intent to remove the Vessel from the state. At the time of purchase,
[Owner] bought a 90-day Florida Cruise permit. In compliance with Section 212.05, the Vessel left Florida on July 8, 1997 and arrived in [Foreign Country], on the same day. On July 14, 1997, the company mailed to the Department a copy of a marina receipt confirming the Vessel's arrival in [Foreign Country], as well as a copy of the Vessel's... Registry.

Section 212.05 provides that a vessel, the purchase of which has been exempted from sales tax as a purchase for removal, will be subject to use tax if it returns to Florida within six months of its removal from the state.
[Owner], at the request of the Vessel's builder, would like to return the Vessel to Florida for this year's... Boat Show. The show takes place in October, before the expiration of six months from the date of removal. The Vessel itself would not be for sale at the show. Rather,
[Florida Seller] would be using it as a display model for potential customers. The Vessel would be removed from Florida after the completion of the show. I ask that your Technical Assistance Advisement state whether the Vessel's participation in the boat show under the foregoing circumstances would trigger the imposition of use tax.

RULING REQUESTED

Whether the Owner of the Vessel should be able to bring the Vessel to the Boat Show without triggering a use tax liability.

CONCLUSION

It is the Department's position that Owner should be able to bring the Vessel to the boat show without triggering the use tax if the Owner obtains a United States Customs Service ("Customs") cruising permit for the Vessel upon first returning it to Florida. The Department recognizes that a foreign flag vessel in Florida waters under a Customs cruising permit, as long as it remains in compliance with the permit, is not subject to use tax because the vessel is not considered to have come to rest in Florida or commingled with the mass of property in Florida. As a requirement of the permit, you state that neither the Owner or Florida Seller will be selling, chartering, or listing the Vessel at the show. Therefore, as long as it is used in a manner consistent with the federal cruising permit, the presence of the Vessel in Florida for this year's Boat Show, would not subject the Vessel to Florida use tax.

This response constitutes a Technical Assistance Advisement under s. 213.22, F.S., which is binding on the Department only under the facts and circumstances described in the request for this advice as specified in s. 213.22, F.S. Our response is predicated on those facts and the specific situation summarized above. You are advised that subsequent statutory or administrative rule changes or judicial interpretations of the statutes or rules upon which this advice is based may subject similar future transactions to a different treatment than expressed in this response.

You are further advised that this response and your request are public records under Chapter 119, F.S., which are subject to disclosure to the public under the conditions of s. 213.22, F.S. Your name, address, and any other details which might lead to identification of the taxpayer must be deleted by the Department before disclosure. In an effort to protect confidential information, we request you notify the undersigned in writing

within 15 days of any deletions you wish made to the request or this response.

Sincerely,

Vicki Allen
Tax Law Specialist
Technical Assistance & Dispute
Resolution
(850)922-4846

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