Did a nonresident's Florida boat purchase qualify for the sales-and-use-tax removal exemption?

Subject

Nonresident Boat Purchase-for-Removal Exemption

Plain-English summary

The nonresident buyer's vessel purchase and later use were exempt from Florida sales and use tax because the statutory purchase-for-removal conditions were met. The buyer had no permanent Florida abode or disqualifying Florida employment, trade, business, or profession involving the vessel and bought it through a licensed yacht broker.

The vessel required repairs. The buyer signed and filed the removal affidavit, removed the vessel from Florida less than 20 days after the repairs were completed, documented it with the U.S. Coast Guard using a South Carolina hailing port, and then spent about nine months in the U.S. Virgin Islands. That exceeded the required six-month period outside Florida.

The statute quoted in the ruling also required out-of-state licensing, registration, or documentation proof within 90 days, along with seller invoice and affidavit records. It imposed use tax if the purchaser missed the removal deadline or allowed the vessel to return within six months of departure.

What this means for you

The exemption depended on a sequence of documented acts, not nonresidency alone. Buyer status, purchase through a registered dealer, the signed affidavit, timely removal, out-of-state documentation, and the six-month absence all mattered.

The ruling applied the law governing a 1993 transaction. Vessel owners and brokers should verify current deadlines, forms, dealer duties, and reentry rules before relying on the historical framework.

Common questions

Q: How quickly did the repaired vessel have to leave Florida under the quoted law? Within 20 days after the repairs or alterations were completed.

Q: What documentation did the statute require? Written proof within 90 days that the boat was licensed, registered, or documented outside Florida, plus the seller's invoice and purchaser affidavit records.

Q: How long did the vessel have to stay outside Florida? At least six months from its departure to avoid the use-tax trigger described in the ruling. This vessel remained away for about nine months.

Q: Did the vessel's eventual return in 1996 undo the original exemption? The Department still concluded that the 1993 purchase and subsequent use qualified because the buyer had satisfied the removal and six-month requirements.

Q: Can another nonresident boat buyer rely on this ruling? No. The advisement binds the Department only for the requester and the specific facts described.

Citations and references

• Fla. Stat. § 212.05(1)(a)1.a, 2 — sales tax and the nonresident boat purchase-for-removal exemption
• Fla. Stat. § 212.06(8)(a) — use tax provision cited in the ruling
• Fla. Stat. § 212.08(7)(t) — limited Florida presence and broker listing provision
• Fla. Admin. Code rr. 12A-1.007(9)(a), 12A-1.091(2)(a) — boat sales and use tax rules
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 98A-011

Original ruling text

SUMMARY

The Department held that a nonresident purchaser, with no disqualifying nexus to this state, who purchased a boat through a registered broker, executed an affidavit for the removal of the boat from this state, documented the boat in another state outside this state, and remained ouside this state in another state, territory of the U.S. or District of Columbia for six months or longer, was not subject to this state's sales or use tax.

Mar 09, 1998

Re: Technical Assistance Advisement 98A-011 Sales and Use Tax - Nonresident Purchaser of Boat Sections 212.05(1)(a)2. and 212.06(8)(a), F.S. Rules 12A-1.007 (9)(a) and 12A-1.091(2)(a), F.A.C.

Dear :

This is a response, styled a Technical Assistance Advisement (TAA), to a letter dated December 2, 1997, wherein the Department was asked to issue an expedited TAA to your client, XXX individually, and as XXX (hereinafter collectively "Client"), regarding the imposition of sales and use tax on the sale and use of the XXX (hereinafter "Vessel").

Stated Facts

The essence of the facts as stated in your letter is:

On or about March 23, 1993, Client purchased the Vessel, in Florida, through a licensed yacht broker. Client, a nonresident purchaser with no disqualifying nexus to the state, executed an Affidavit For Exemption of Boat Sold For Removal From The State of Florida By A Nonresident Purchaser, which was filed with the Department. That affidavit indicated that the Vessel was to be repaired and

would be removed from the state within 20 days after completion of the repairs or alterations. On or about July 27, 1993, Client removed the Vessel from Florida waters. This removal took place less than 20 days after completion of the repairs. Client documented the Vessel with the U.S. Coast Guard with a hailing port in South Carolina and following the departure of the Vessel from Florida, Client spent approximately nine months in the U.S. Virgin Islands. Client continued to live aboard the Vessel for a period of approximately three years following the purchase and extensively traveled international waters.

Citing Sections 212.05(1)(a)2. and 212.06(8)(a), F.S., you have requested that the Department issue a holding that the purchase and subsequent use, of the Vessel by Client, is exempt from Florida's sales and use tax.

Law and Analysis

Section 212.05(1)(a)1.a., F.S., levies the sales tax, at the rate of six percent of the sales price of each article of tangible personal property when sold at retail in this state. However sub-subparagraph 212.05(1)(a)2. (1993), of the statute, provides, in part:

2. This paragraph does not apply to the sale of a boat or
   airplane by or through a registered dealer under this chapter to a purchaser who, at the time of taking delivery, is a nonresident of this state, does not make his permanent place of abode in this state, and is not engaged in carrying on in this state any employment, trade, business, or profession in which the boat will be used in this state, or is a corporation none of the officers or directors of which is a resident of, or makes his permanent place of abode in, this state. This exemption shall not be allowed unless:

a. The purchaser removes the boat or airplane from this state within 10 days after the date of purchase or, when the boat or airplane is repaired or altered, within 20 days after completion of the repairs or alterations;

b. The purchaser within 90 days from the date of sale provides the department with written proof that the purchaser licensed, registered, or documented the boat or airplane outside the state;

c. The seller provides to the department a copy of the sales invoice and an affidavit signed by the purchaser that he has read the provisions of this section; and

d. The seller makes the affidavit a part of his record for as long as required by s. 213.35.

If the purchaser fails to remove the boat or airplane from this state within 10 days after purchase or, when the boat or airplane is repaired or altered, within 20 days after completion of such repairs or alterations, or permits the boat or airplane to return to this state within 6 months from the date of departure, the purchaser shall be liable for use tax on the cost price of the boat or airplane....

Pursuant to our telephone conversation of December 15, 1997, you stated that the Vessel was brought back into Florida in October, 1996, and listed for sale by Client.

Section 212.08(7)(t), F.S., provides, in part:

Notwithstanding the provisions of chapters 327 and 328, pertaining to the registration of vessels, a boat upon which the state sales or use tax has not been paid is exempt from the use tax under this chapter if it enters and remains in this state for a period not to exceed a total of 20 days in any calendar year calculated from the date of first dockage or slippage at a facility that... rents dockage or slippage space in this state....

2. During the period of repairs,... and during the 20-day
   period referred to in subparagraph 1., the boat may be listed for sale, contracted for sale, or sold exclusively by a broker or dealer registered with the department without incurring a use tax under this part; however, the

sales tax levied under this part applies to such sale....

Conclusion

A nonresident purchaser, who has no permanent place of abode in this state, and is not engaged in carrying on in this state employment, trade, business, or profession in which the boat will be used in this state, or is a corporation none of the officers or directors of which is a resident of, or makes his or her permanent place of abode in this state, is, by statute, exempt from sales tax on the purchase of a boat when further conditions, enumerated in the statute are met.

Accordingly, when Client, a nonresident purchaser with no disqualifying nexus to this state: (i) purchased the Vessel in March, 1993; (ii) executed the affidavit of exemption from sales tax for the removal of the Vessel from this state within a specified time; (iii) removed the Vessel from this state within that specified time; (iv) documented that removal, and (v) remained outside this state for a period of six months from the date of departure, Client met all requirements of the statute for the exemption from sales and use tax on the purchase and subsequent use of the Vessel. Therefore, the Department agrees with your analysis and conclusion that the purchase of the Vessel by Client qualified for the exemption, pursuant to s. 212.05(1)(a)2., F.S., and that Client's use of the Vessel is not subject to Florida's use tax under s. 212.06, F.S., or Rule 12A1.091, F.A.C.

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 the confidentiality of such information, we request you notify the undersigned in writing within 15 days of any deletions you wish made to the request or the response.

Sincerely,

Horace Royals
Tax Law Specialist
Technical Assistance and Dispute Resolution (850) 922-4842

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