Florida Boat Sale Laws

By Dan Ketchum - Updated August 15, 2018
A group of freinds enjoying a day at the lake

Ask around among family and friends, and you're liable to get a whole heap of tips on how to sell a boat in Florida – give it a wax, shampoo the carpets, clean the bilge, get it surveyed and make sure you take some well-lit photos. All good advice, but these tricks neglect one crucial element: The best way to sell a boat in Florida is the legal way.

Buying a Boat in Florida

For buyers and brokers in Florida who are dealing with water-faring vessels that already have a title from the state, the seller simply releases the boat's title to the purchaser. To do this, you'll need to fill out the "transfer of title by seller" section on the boat's title. This section includes the purchaser's name and address, the date of the sale, the sale price and the signatures and printed names of both the seller and the buyer.

Some boats don't need a title to be water-legal in the land of alligators. Boats under 16 feet in length that aren't powered by motors are good to go, as are vessels used only on private lakes and ponds. The same goes for amphibious vehicles and those not used on Florida waters for more than 90 consecutive days. More official exemptions include any boats owned by a United States government entity, those with federal documentation or those documented with the U.S. Coast Guard.

Additional Forms

Though transferring the title is crucial, your newly purchased (or sold) boat isn't quite seaworthy yet. Before anyone can hit the Atlantic, Form HSMV 82040 – an Application for Certificate of Title with/without Registration from the Florida Department of Highway Safety and Motor Vehicles – must be filed with the local tax collector's office. According to Florida Statutes Section 319.22(2), this filing, completed within 30 days of the date of sale, helps protect the owner against civil liability for the operation of the vessel.

Taxation Laws

When you play by the book, you can't avoid state of Florida sales tax on the boat you sell. Straight from the authorities at the Florida Department of Revenue, "All boats sold, delivered, used or stored in Florida are subject to Florida's sales and use tax, plus any applicable discretionary sales surtax, unless exempt."

Unless you're a professional boat dealership, you owe Florida use tax – a standard part of the state's uniform taxation policies – which clocks in at 6 percent. On top of that, you may owe discretionary sales surtax if: the boat is purchased by someone who isn't a boat dealer, and the sale or delivery occurs in Florida; if the boat is purchased out of state and brought into Florida within six months of the purchase date; or if the boat is purchased in a foreign country and brought into Florida at any time.

On top of these statewide taxes, most counties in the Sunshine State also impose local discretionary surtaxes. These taxes apply to the first $5,000 of the vessel's purchase price and range from .5 percent to 1.5 percent, depending on the county. For a full breakdown of the county surtax rates, check out Form DR-15DSS, available for free download at the Florida Department of Revenue's official website. The absolute maximum tax you can pay on the sale of a boat or vessel in the state of Florida is $18,000, as of 2018 state tax rates. This figure includes all sales and use tax, plus discretionary sales surtax. Related, the maximum tax Florida requires on the repair of a boat or vessel is $60,000 for each repair (with separate or subsequent repairs subject to the same cap).

Boat taxes on vehicles bought in the state are due within 30 days of purchase. For vehicles purchased out of state, you have 90 days from the date the boat enters Florida to pay your taxes.

Tax-Exempt Boats in Florida

They say death and taxes are inevitable; Florida state laws can't exempt you from the former, but some boats are indeed tax-exempt in the panhandle.

Boats sold by nonresidents are exempt (although the sale of boat trailers is not), so long as the purchaser signs the affidavit Form GT-500003 from the Department of Revenue. To qualify for this exemption, boats weighing less than 5 net tons must leave the state within 10 days of purchase (or be placed immediately in a repair facility and leave within 20 days of the repair's completion) while boats weighing 5 tons or more may remain in the state for 90 days, as long as they're emblazoned with Florida Department of Revenue boat decals. This exemption also requires the broker to provide the Department of Revenue with an invoice and removal affidavit, proof that the boat left the state and documentation of registration outside of Florida.

Likewise, foreign-flagged vessels with a valid "License to Cruise in the Waters of the United States" from the U.S. Customs Service are exempt, as are boats imported for sale and boats temporarily docked in Florida ("temporarily," by law, means no more than 20 calendar days out of the year).

At the Dealership

Though the point-of-sale process is a little more streamlined on the buyer's end when boat transactions happen at a Florida dealership, plenty of laws still apply to the process behind the scenes (and, of course, boats purchased from a pro dealer will still need to be taxed, titled and registered). According to the Florida Department of Revenue, a boat dealer is "a person or business that sells boats, offers or imports boats for retail sale in Florida." This applies to yacht brokers, too, who are subject to the same sales and use tax laws as boat dealers.

Just as is the case in individual sales, boat sales at the dealership are taxed according to Florida's sales and use tax policy. But, unlike personal boating transactions, dealers must collect sales tax on the entire purchase price of all tangible property being sold. Basically, this means that they have to tax the vessel itself, the motor (if it's an outboard), the boat trailer and all included accessories, such as life jackets or paddles. This taxation must occur at the time of sale. When an individual sells a boat, those additional items do not have to be taxed or itemized – just the boat itself. This ends up potentially saving the buyer a little bit of money at the time of purchase.

When you buy a boat from a licensed dealership in Florida, the dealer is required to collect the state sales tax on the transaction, then pay that tax to the Florida Department of Revenue and submit the registration to the Department of Motor Vehicles. Sales tax must be collected at the time of sale. For individuals, the buyer has to register the vehicle with the DMV, and it falls to the DMV to collect the use tax on the purchase of the vessel. Unlike pro dealers, state law doesn't require sellers to collect sales tax or register the boat on behalf of the buyer.

Things get a little more sticky if you buy a boat from an online dealership and said online dealership does not collect taxes on the purchase. If you're in the state of Florida, and you purchase a boat that is to be used in the state – that's where the "use" in use tax comes in to play – it's your legal responsibility to pay taxes on the purchase to the Department of Revenue. In this situation, you'll need to get it taken care of by good old-fashioned snail mail with Form DR-15MO.

Boat dealers don't miss out on that sweet tax exemption train entirely, though. If a Floridian boat dealer or yacht seller purchases a boat exclusively for the purpose of resale, that vehicle is tax exempt. To qualify for this exemption, the buyer of the used boat must present a signed copy of Form DR-13, Annual Resale Certificate for Sales Tax, to the seller. Boats imported for the purpose of sale are covered by this use-tax exemption, too, but only for brokers and dealers – not individual buyers or sellers. These imported boats are, of course, still subject to state sales tax at the time of sale.

Registering Your Boat

Just like paying taxes, your new (or used) boat in Florida must be titled or registered with the Department of Highway Safety and Motor Vehicles within 30 days of purchase, or 90 days if imported from another state – failing to register within 30 days of ownership is considered a second-degree misdemeanor in the Orange State. This process gets you one step closer to getting your new boat on the water (which is a whole lot more fun than worrying about taxation laws and transfers of title). In Florida as elsewhere, registering your vehicle is done for record-keeping purposes; registration helps protect boat owners from theft and against irresponsible or illegal actions from other boaters.

Like titling your boat, the registration process goes through the Florida Department of Highway Safety and Motor Vehicles. You can get this done at the nearest county tax collector's office, or wherever you usually get your car's license plates renewed. As of 2018, Florida does not offer boat registration applications on-line, so you'll have to do it the old-school way: in person. Be sure to bring proof of ownership – which can come in the form of the manufacturer's certificate of origin, a bill of sale, builder's contract or federal marine document – and the boat's title, and be prepared to pay the applicable Florida DHSMV registration fees (which range from about $5 for motorized vessels to canoes, and up to nearly $200 for boats that measure 110 feet or more). Boat registration will cover your vehicle for one or two years, and you'll need to keep a copy of the registration on-board whenever you're operating the vessel. In addition to keeping the Certificate of Registration handy, your vessel must have its registration numbers displayed on its front half (above the waterline), in visible, high-contrast letters at least 3 inches high.

Also, akin to the titling situation, a handful of water vessels are exempt from registration in Florida. Just as they don't need titles, motor-less boats under 16 feet long, vessels used on privately owned bodies of water, and government vehicles get a legal pass. Registration exemption is a little looser than titling laws, though – motor-less boats, including canoes, kayaks, racing shells and rowing sculls, don't need to be registered with the DHSMV, regardless of their length.

Once registration, taxation and titling are all in the clear, you'll need a boating education ID card (which you can get by completing a course approved by the National Association of State Boating Law Administrators) and a form of photo ID to legally operate any motorized boat with more than 10 horsepower. And, while it's not a legal requirement, it's probably not a bad idea to pack sunscreen along with that license.

About the Author

As a freelance writer and small business owner with a decade of experience, Dan has contributed legal- and finance-oriented content to diverse sources including Chron, Fortune, Zacks.com, Motley Fool and MSN Money, among others.

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