Calling the move “a major victory for Florida’s struggling marine industry,” the Florida Yacht Brokers Association and the Marine Industries Association of South Florida hailed a bill signed by Gov. Charlie Christ last week that contains a boat sales and use tax cap.
The law, which will take effect on July 1, limits Florida’s sales tax on a boat purchase, or the use tax for a currently owned vessel, at $18,000, which backers say will level the playing field for the state’s boat dealers and brokers who are trying to compete with dealers in other states where the taxes are much lower.
“Florida has been losing boat sales and service business and revenue to other states and countries that offered more favorable sales tax treatment,” the FYBA and MIASF wrote in a joint press release on the subject. “Passage of the cap is expected almost immediately to begin invigorating Florida’s vital marine industry by helping to stimulate boat sales and encourage boat buyers and current owners to register, keep and use their watercraft in the state.”
Jeff Erdmann, president of Bollman Yachts in Fort Lauderdale and a member of the FYBA’s legislative team, cites past studies – in an article in today’s Palm Beach Post – which have shown that 63.4 percent of boats sold by Florida brokers did not close, or register, in the state, meaning those buyers did not have to pay tax.
In the same article, Frank Herhold, MIASF executive director, said Florida has been at a disadvantage in competing with other states such as North and South Carolina, where the sales tax is capped at $1,500 and $300 respectively, or with Delaware and Rhode Island, where there is no sales tax. Herhold said it was important for the state to offer some tax incentives so that yacht buyers would at least keep Florida on the table as an option.
When I first blogged about this topic in early April, I noted a Chris Craft dealer in St. Petersburg who, while supportive of the measure, wondered whether dealers who sold less expensive boats would be disappointed that their buyers would not also be getting tax relief.
It’s a fair question. What about the dealers who sell smaller boats, and the companies who make and help outfit them? Do you think Florida’s tax cap goes far enough, or would you like to see more done? And, if so, what plans or proposals do you favor or suggest?
Leave a comment below and let us know.