Do I Owe Taxes on My Yacht?

This post is the beginning of a new series of articles from The Moorings Yacht Brokerage consisting of common customer questions. If you can't find the answers here contact one of our Brokerage Agents who are always happy to assist. In this article we find out what taxes are owed once a used boat is purchased from The Moorings. Taxes are a confusing subject and are dependent on several variables but our agents are well versed in the area and will help you navigate through these murky waters so buying your pre-owned yacht is that much simpler.

Will I owe taxes on my yacht purchase?

Whether or not you owe taxes at the time of purchase depends on where you plan to take the boat after closing.  Many of the yachts we sell out of charter service are located in the Caribbean and we do not collect sales tax on the purchase at the time of closing.  However if you are a Florida resident and bringing the boat back to Florida we can collect the tax at the time of closing and save you the hassle of dealing it upon your return.  Florida charges a 6% sales tax, capped at $18,000, plus any applicable county surcharges.

If you do not bring the boat back to the US and begin your cruising immediately we will not collect any taxes at the time of sale.  It is always recommended to check with your local municipality to find out about any applicable taxes in your particular instance.

More information here on Florida sales & use tax:
http://floridarevenue.com/Forms_library/current/gt800005.pdf

What is the difference between import duty and sales tax?

As the majority of the yachts we sell are built outside of the US an import duty of 1.5% of the yacht’s value, based on the sales price, will be due when it reaches US waters.  US waters include the territory of Puerto Rico, but not the USVI.

A boat can be registered or US Coast Guard documented yet never have been to US waters.  Therefore import duty would still be due.

Sales tax is due to your local state, and is based on the value of the sale.

We recommend the use of an import agent to streamline the process with US customs for the import duty payment.  Contact an agent for referrals.

What does “tax not paid” mean on some of your yacht listings?

Tax not paid refers to European VAT, which in general does not affect US or Canadian buyers in the Caribbean. If you are looking to buy a boat in the Mediterranean or the Exotics we also have a full service brokerage based in Nice, France that can assist with specifics to those markets.

Can I get out of paying taxes?

If you are a US buyer purchasing a boat in the Caribbean and do not bring the boat back to the US it is likely you will not be liable for sales tax at the time of purchase.

We always recommend checking with your local municipality if outside of the state of Florida, or with your personal tax advisor for your specific situation.

If I form an LLC can I avoid taxes?

No, the tax man cometh. There may be some tax advantages when you sell the yacht based in an LLC corporation, however it is best to consult your tax professional to help with that.

 

Still have questions about taxes? Contact a broker today, or see our boat buying guide here: https://www.mooringsbrokerage.com/moorings-yacht-brokerage-used-boat-buying-guide 

Bill Regan

Bill is originally from New York but quickly developed a passion for sailing during his first visit to the Caribbean over a decade ago. Throwing off the shackles of winter he moved to the Florida Keys and began work as a yacht broker and Boat Captain. Bill holds a 100 Ton Masters license with sailing endorsement and is also a PADI Divemaster. In 2014 he and his wife took an extended cruise along the East Coast and through the Bahamas. Other sailing highlights include delivery work from Florida to the Virgin Islands, to Panama and through the canal. Bill’s passion for the cruising lifestyle is palpable and he loves helping others achieve their boating dreams. bill.regan@mooringsbrokerage.com 954-925-4150 ex.3201 | Cell: 305-587-1311

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