UPDATE: On May 28, 2010 Florida Governor Charlie Crist signed the Jobs for Florida bill into law. This bill contains the Florida Boat Sales-Use Tax Cap, which limits Florida sales tax, currently at six percent, on boat purchases or the use tax on currently owned boats to $18,000 – this will take effect on July 1, 2010.
Both FYBA (Florida Yacht Brokers Association) and MIASF (Marine Industries Association of South Florida) lobbied for this bill to be passed as Florida was losing revenue due to vessels leaving the state in favor of states and countries with less tax. The bill is expected to have immediate results, stimulating Florida’s marine industry.
APRIL 9, 2010: A Florida Tax Cap bill has been quietly gaining momentum in the Florida Legislature and on Tuesday, April 6 the House version of the bill passed by a large margin of 79-36.
According to The Florida Senate Bill Analysis and Fiscal Impact Statement, “The bill creates an $18,000 cap on the amount of sales and use tax that may be levied against each sale of a boat in Florida.” Some critics of the bill say it is just another tax cut for the rich, but what those critics fail to realize, is that at the current rate of six percent sales/use tax, a majority of yacht owners have elected to either register their boats in other states without onerous taxes or to simply register with a foreign flag of convenience which does not generate any tax revenue for Florida.
According to Danielle Butler, a maritime attorney and Partner with Fowler White Burnett in Fort Lauderdale, any boat, U.S. or foreign flagged, can now simply pay the $18,000 tax, register the boat in Florida and have the right to keep the boat in the state of Florida as long as they like. (Of course foreign flag vessels must still comply with any federal laws and the terms of their U.S. Cruising License.)
According to Frank Herhold with the Florida Marine Industries Association of South Florida, “The Sales Tax Cap, if approved by the Florida Legislature, will represent a huge 'welcome mat' encouraging vessels to stay in Florida after the purchase and make use of all that our marine industry has to offer in terms of outfitting, provisioning, refits, etc. Owners and captains will no longer have to be concerned with having to leave Florida to avoid unnecessary taxation resulting in loss of jobs and loss of sales tax revenues to the state. I would anticipate the Sales Tax Cap will serve as our marine industry economic stimulus package as we attract more vessel buyers, currently going to more tax-friendly jurisdictions, whose purchases will generate new jobs and new revenues.”
The proposal, loosely called “The Florida Maritime Full Employment Act” is also known as House Bill 711 and Senate Bill 2454. Having already passed the House, supporters of the bill are hoping to see it pass in the Senate before the session ends on April 30, 2010. According to Butler who has spent a great deal of time reviewing the bills and speaking with its sponsors’ legislative assistants (read: the guys who wrote the bill), “If the bill is not passed in uniformity by the time the 2010 sessions ends on April 30, then it dies and cannot be heard again until 2011.”
Needless to say there has been a great deal of nervous optimism regarding the passage of Senate Bill 2454 which still faces a number of hurdles to overcome before April 30. Herhold says, “The Florida Yacht Brokers Association and the Marine Industries Association of South Florida have joined together [in a joint effort] to pass this key piece of legislation to benefit Florida's marine industry,” just today Florida Governor Charlie Christ reiterated his approval of the bill and Herhold predicts, “It will pass as the Florida Legislature enters its final weeks!”