Yacht Sale Tax Considerations

Perfunctory questions to be asked in a yacht sale is whether the yacht is eligible for sale in the US, and what states sales or use tax will be implicated by a sale. Foreign-built yachts brought into the US for sale or charter must pay a 1.5% customs duty. An exception is if the foreign-flagged yacht is brought into the US for personal use, which in that case, a cruising license can be obtained for the yacht to navigate US waters.

Additionally, the yacht owner, whose vessel is more than 79 feet in length, can avoid the duty by importing the yacht for sale at a boat show and posting a bond equal to twice the duty that would have been payable on any sale of the yacht’s value.  If the boat show bond route is taken, the yacht must be shown to US residents at a boat show and not be used by the owner for personal purposes.

In Florida, the yacht is subject to a 6% sales tax, not to exceed $18,000. One way to avoid the Florida sales tax is for delivery of the yacht to occur outside of Florida waters, which extends nine nautical miles on the Gulf side or three nautical miles (or the western edge of the Gulf stream, whichever is greater) on the Atlantic. This however will not avoid Florida Use tax, which is also 6% and capped at $18,000. One way to avoid the use tax is to register as a dealer and operate the yacht as a charter, without a crew.

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