Did Florida use tax apply when an out-of-state yacht was used in other U.S. states for more than six months before entering Florida?

Plain-English summary

The Florida residents planned to buy and take title to a new yacht outside Florida, pay the other state's sales tax, federally document the vessel, and use it continuously along the U.S. East Coast outside Florida for more than six months before bringing it into the state.

Florida ruled that the out-of-state purchase and title transfer were outside its sales-tax jurisdiction. Later Florida use also would not trigger use tax if the owners could document that the yacht had been used for at least six months under conditions giving another U.S. state, territory, or the District of Columbia taxing jurisdiction and that any lawfully imposed tax had been paid.

The result also depended on the yacht not having been bought for Florida use. The ruling noted separate Florida registration and presence rules, but its conclusion rested on satisfying the six-month out-of-state-use presumption before importation.

What this means for you

Elapsed time alone is not enough. Owners need records showing where and how the boat was used, why another U.S. jurisdiction had taxing authority, and what tax was paid.

Common questions

Was Florida sales tax due at the out-of-state closing? No, on the stated out-of-state purchase and title-transfer facts.

Was later Florida use taxable? No, if all six-month, taxing-jurisdiction, documentation, payment, and intent conditions were met.

Did use in a foreign country count for this rule? The ruling's favorable presumption addressed use in other U.S. states, territories, or the District of Columbia.

Citations and references

• Fla. Stat. §§ 212.02, 212.06(8), 212.21, and 328.58 and Fla. Admin. Code r. 12A-1.007, as discussed in the advisement.

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 09A-023

Original ruling text

SUMMARY
QUESTION: Is a boat purchased outside of Florida, and used outside of Florida for six
months or longer subject to Florida’s use tax upon importation into Florida.
ANSWER: If a boat purchased outside of Florida and used under conditions which give
rise to the taxing jurisdiction of other U.S. states for six months or longer before being
brought to Florida, and presuming the boat was not bought for use in Florida will not be
subject to Florida sale or use tax when brought to Florida for use.
May 14, 2009
XXX
Re:

Technical Assistance Advisement
Sales and Use Tax
XXX XXX and XXX XXX(“Taxpayers”)
Taxpayer Identification Numbers: XXX (XXX XXX)
XXX (XXX XXX)
Taxpayer’s Address: XXX
XXX
Sections: 212.02, 212.06, 212.21, and 328.58, Florida Statutes (“F.S.”)
Rule: 12A-1.007, Florida Administrative Code (“F.A.C.”)

Dear XXX:
This is in response to your correspondence to the Department, dated February 18, 2009,
requesting the Department’s issuance of a Technical Assistance Advisement (hereinafter,
“TAA”) pursuant to Section 213.22, F.S., and Chapter 12-11, F.A.C., regarding the
purchase and subsequent importation of a vessel for use or storage for use in Florida. An
examination of your letter established that you 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.
ISSUE
Will a federally documented yacht entering Florida waters after being used in other U.S.
states for six months or longer be subject to any Florida sales or use tax?

Technical Assistance Advisement
Page 2

FACTS
Your letter provides the following statements of fact:
1.

Taxpayer, residents of Florida, contracted to purchase a new XXX XXX
XXX motoryacht (the “Yacht”).

2.

Taxpayer may form a company (the “Company”) to acquire title to the
Yacht, and, if so, will assign the purchase agreement to the Company.

3.

Purchase of the Yacht will be through a dealer.

4.

The purchase and sale, including the transfer of title, will take place in the
State of XXX XXX and XXX XXX sales tax will be paid on the transfer.

5.

Post-closing, the Yacht will be federally documented with the United
States Coast Guard in the ownership of Taxpayer (or the Company). No
state registration of the Yacht is contemplated at this time.

6.

After purchase, the Yacht will be used along the east coast of the United
States, excluding Florida, continuously for a period in excess of six
months.

7.

A saltwater fishing license fee will not be required to be paid on the Yacht
pursuant to Section 372.57(7), F.S., either directly or indirectly.

TAXPAYER POSITION & REQUESTED ADVISEMENT
The relevant portion of the Taxpayer’s letter of February 18, 2009, provides the
following requested advisement:
Based upon the facts stated above, we request a ruling that Taxpayer (or
Company) will not be subject to any Florida sales or use tax.
The pertinent portion of the Taxpayer’s letter of February 18, 2009, provides the
following Taxpayer analysis:
. . . Our review of the Florida law [] supports the proposition that if the Yacht is
used in other U.S. states for six months or longer before entering Florida,
Taxpayer (or the Company) will not be subject to any Florida sale or use tax as a
consequence of subsequently bringing, using, or storing the Yacht in Florida.
Based upon the Florida law cited herein we respectfully request that the
Department rule in the affirmative. After considering this request, if the

Technical Assistance Advisement
Page 3
Department anticipates ruling adversely, we respectfully request pursuant to the
provisions of Rule 12-11.004, F.A.C., that a conference be arranged between
myself and the Department.
In support of this position, the Taxpayer cited relevant portions of paragraph
212.06(8)(a), F.S., as well as the germane portions of Rules 12A-1.007 and 12A-1.091,
F.A.C.
LAW
The declaration of legislative intent for Chapter 212, F.S., tax on sales, use, and other
transactions, is contained in subsection 212.21(2), F.S., and provides in relevant part:
It is hereby declared to be the specific legislative intent to tax each and every . . .
use, storage, consumption . . . levied and set forth in this chapter, except as to
such . . . use, storage, [or] consumption . . . as shall be specifically exempted
therefrom by this chapter subject to the conditions appertaining to such
exemption. . . . (emphasis supplied)
Subsection 212.02(8), F.S., provides:
“In this state” or “in the state” means within the state boundaries of Florida as
defined in s. 1, Art. II of the State Constitution and includes all territory within
these limits owned by or ceded to the United States.
Subsection 212.02(20), F.S., provides, in pertinent part:
“Use” means and includes the exercise of any right or power over tangible
personal property incident to the ownership thereof, or interest therein . . . .
Section 212.05, F.S. provides, in part:
It is hereby declared to be the legislative intent that every person is exercising a
taxable privilege who . . . stores for use or consumption in this state any item or
article of tangible personal property as defined herein . . . . (emphasis supplied)
(1) For the exercise of such privilege, a tax is levied on each taxable transaction or
incident, which tax is due and payable as follows:

(b) At the rate of 6 percent of the cost price of each item or article of tangible
personal property when the same is not sold but is used, consumed, distributed, or
stored for use or consumption in this state . . . .

Technical Assistance Advisement
Page 4
Section 212.06, F.S., provides, in pertinent part:
(1)(a) The aforesaid tax at the rate of 6 percent of the retail sales price as of the
moment of sale, 6 percent of the cost price as of the moment of purchase, or 6
percent of the cost price as of the moment of commingling with the general mass
of property in this state, as the case may be, shall be collectible from all dealers as
herein defined on the sale at retail, the use, the consumption, the distribution, and
the storage for use or consumption in this state of tangible personal property or
services taxable under this chapter. . . .

(2) . . . (b) The term “dealer” is further defined to mean every person, as used in
this chapter, who imports, or causes to be imported, tangible personal property
from any state or foreign country for sale at retail; for use, consumption, or
distribution; or for storage to be used or consumed in this state. (emphasis
supplied)

(d) The term “dealer” is further defined to mean any person who . . .used, or
consumed, . . . or stored for use or consumption in this state, tangible personal
property and who cannot prove that the tax levied by this chapter has been paid on
the sale at retail, the use, the consumption, . . . or the storage of such tangible
personal property. . . .

(4) On all tangible personal property imported or caused to be imported from
other states, territories, the District of Columbia, or any foreign country, and used
by him or her, the dealer, as herein defined, shall pay the tax imposed by this
chapter on all articles of tangible personal property so imported and used, the
same as if such articles had been sold at retail for use or consumption in this state.
For the purposes of this chapter, the use, or consumption, or distribution, or
storage to be used or consumed in this state of tangible personal property shall
each be equivalent to a sale at retail, and the tax shall thereupon immediately levy
and be collected in the manner provided herein, provided there shall be no
duplication of the tax in any event. (emphasis supplied)

(6) It is however, the intention of this chapter to levy a tax on the sale at retail,
the use, the consumption, the distribution, and the storage to be used or consumed
in this state of tangible personal property after it has come to rest in this state and
has become a part of the mass property of this state. (emphasis supplied)

Technical Assistance Advisement
Page 5
(7) The provisions of this chapter do not apply in respect to the use or
consumption of tangible personal property or services, or distribution or storage
of tangible personal property for use or consumption in this state, upon which a
like tax equal to or greater than the amount imposed by this chapter has been
lawfully imposed and paid in another state, territory of the United States, or the
District of Columbia. . . .
(8)(a) Use tax will apply and be due on tangible personal property imported or
caused to be imported into this state for use, consumption, distribution, or storage
to be used or consumed in this state; provided, however, that, except as provided
in paragraph (b), it shall be presumed that tangible personal property used in
another state, territory of the United States, or the District of Columbia for 6
months or longer before being imported into this state was not purchased for use
in this state. . . . (emphasis supplied)
(b) The presumption that tangible personal property used in another state,
territory of the United States, or the District of Columbia for 6 months or longer
before being imported into this state was not purchased for use in this state does
not apply to any boat for which a saltwater fishing license fee is required to be
paid pursuant to s. 372.57(7), either directly or indirectly, for the purpose of
taking, attempting to take, or possessing any saltwater fish for noncommercial
purposes. . . .
Rule 12A-1.007(2)(a), F.A.C., provides, in part:
(2) Purchases Outside Florida.
(a) There shall be a presumption that any . . . boat . . . purchased in another state,
territory of the United States, or the District of Columbia but titled, registered, or
licensed in this state is taxable except as otherwise provided in subsection [(25)]of
this rule. This presumption may be rebutted only by documentary evidence that
the person owning the . . . boat . . . purchased the . . . boat . . . in another state,
territory of the United States, or the District of Columbia six (6) months or more
prior to the time it is brought into this state. In order for such property to be
presumed exempt as purchased for use outside Florida, the person owning the . . .
boat . . . must provide documentary proof that such property was used in other
states, territories of the United States, or the District of Columbia for six months
or longer under conditions which would lawfully give rise to the taxing
jurisdiction of another state, territory, or District of Columbia and any lawfully
imposed tax was paid to such state, territory, or District of Columbia before being
imported into this state. . . . (emphasis supplied)

Technical Assistance Advisement
Page 6
Rule sub-subparagraph 12A-1.007(9)(b)1.b., F.A.C., provides, in part:
A boat, purchased by its current owner outside this state, operating on the waters
of this state in excess of 90 days, which is solely documented under operative
federal law, or which is registered, licensed, or titled pursuant to a federally
approved numbering system of another state as described in s. [328.58] F.S., is
subject to tax on the sales price of the boat at the time the requirements of s.
[328.58], F.S., have been met.
Rule subparagraph 12A-1.007(9)(b)2., F.A.C., provides, in relevant part:
. . . [A]ny boat which remains in this state for more than an aggregate of 183 days
in any 1-year period shall be presumed to be commingled with the general mass
of property of this state, and tax shall be due on the sales price of the boat . . . .
Section 328.58, F.S., provides, in part:
The owner of any vessel already covered by a registration number in full force
and effect which has been awarded:
(1) By another state pursuant to a federally approved numbering system of
another state;
(2) By the United States Coast Guard in a state without a federally approved
numbering system; or
(3) By the United States Coast Guard for a federally documented vessel with a
valid registration in full force and effect from another state
shall record the number with the Department of Highway Safety and Motor
Vehicles prior to operating the vessel on the waters of this state in excess of the
90-day reciprocity period provided for in this chapter. . . .
DISCUSSION
Florida use tax is “ . . . due on tangible personal property imported or caused to be
imported into this state for use, consumption, distribution, or storage to be used or
consumed in this state . . . .” s. 212.06(8)(a), F.S.
The facts provided in your request dated February 18, 2009, indicate that the purchase of
the Yacht will occur outside Florida. Additionally, the facts provided in your request of
February 18, 2009, indicate that the Yacht will be federally documented with the United
States Coast Guard and that within the first six months of Taxpayer’s (or the Company’s)
ownership, the Yacht will not enter Florida waters.

Technical Assistance Advisement
Page 7
The use tax provisions carry a specific exception to the imposition: “. . . it shall be
presumed that tangible personal property used in another state, territory of the United
States, or the District of Columbia for 6 months or longer before being imported into this
state was not purchased for use in this state.” (emphasis supplied) Section 212.06(8)(a),
F.S.
Rule 12A-1.007(2)(a), F.A.C., supplies an administrative interpretation of Section
212.06, F.S. It provides that the person owning a boat purchased outside Florida, for use
outside Florida, must provide documentary proof that the boat purchased outside Florida,
for use outside Florida, was in fact used outside Florida under conditions that would give
rise to the taxing jurisdiction of another state, territory, or District of Columbia.
Additionally, the person owning a boat under the aforementioned conditions must
provide documentary evidence that any lawfully imposed tax was paid to such state,
territory, or District of Columbia before the boat was imported into this state.
If the Taxpayer, upon request, provides documentation sufficient to substantiate the use
of the Yacht in other U.S. states for six months or longer, and documentation that any
lawfully imposed tax was paid, the Yacht will not be subject to Florida’s use tax as a
consequence of bringing, using, or storing the Yacht in Florida after its continuous use in
other U.S. states for more than six months.
The Department, however, has previously recognized that a yacht will not be subject to
the use tax if the following conditions are met, prior to its importation for use in this
state:

1. There exists a presumption that the yacht was not purchased for use in Florida.
2. There is documented evidence that the yacht was used under conditions which give
   rise to the taxing jurisdiction of other U.S. states, territories, or the District of
   Columbia for six months or longer under the current ownership.
3. There is documented evidence that any lawfully imposed tax was paid to such state,
   territory, or the District of Columbia.
   CONCLUSION
   Based solely upon the facts as stated in this TAA, Florida sales tax will not be due on the
   initial purchase or transfer of title to the Yacht to either the Taxpayer or the Company,
   because the purchase and transfer of title to the Taxpayer or the Company occurs outside
   Florida’s taxing jurisdiction.
   Again, based solely upon the facts as stated in this TAA, if the Taxpayer, upon request,
   provides documentation sufficient to substantiate the use of the Yacht in other U.S. states,
   territories of the United States, or the District of Columbia for six months or longer,
   together with documentation that demonstrates any lawfully imposed tax was paid to
   such state, territory of the United States or the District of Columbia, the Yacht will not be

Technical Assistance Advisement
Page 8
subject to Florida’s use tax as a consequence of bringing, using, or storing the Yacht in
Florida following its continuous use in other U.S. states, territories of the United States,
or the District of Columbia for more than six months.
This response constitutes a Technical Assistance Advisement under section 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 section 213.22, F.S. Our response is predicated
upon 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 from that which is expressed in this response.
Technical assistance advisements have no precedential value except to the taxpayer who
requests the advisement and then only for the specific transaction addressed in the
technical assistance advisement, unless specifically stated otherwise in the advisement.
See Section 213.22(1), F.S.
You are further advised that this response, your request and related backup documents are
public records under Chapter 119, F.S., which are subject to disclosure to the public
under the conditions of section 213.22, F.S. Confidential information must be deleted
before public disclosure. In an effort to protect confidentiality, we request you provide
the undersigned with an edited copy of your request for Technical Assistance
Advisement, the backup material and this response, deleting names, addresses and any
other details which might lead to identification of the Taxpayer.
Your response should be received by the Department within 15 days of the date of this
letter.
Sincerely,

James C. “Jimmy” Kalfas, CPA
Tax Law Specialist
Technical Assistance and Dispute Resolution
P. O. Box 7443
Tallahassee, FL 32314-7443
(850) 922-4845
Facsimile (850) 921-2983
Record ID No.: 60519