FLORIDA’S TAX CAP Win - Win!

FLORIDA’S TAX CAP EXPERIMENT HAS NATIONAL IMPORT
FORT LAUDERDALE, Fla. – March 1, 2012 – As the national debate ebbs and flows over whether cutting
taxes will spur economic growth and job creation, Florida’s recent experiment in capping a sales-and-use
tax on boats is enlightening. The state collected nearly 10 times as much sales tax revenue as was
projected in the first year following the inclusion of maritime provisions in a major jobs bill signed into
law in 2010, according to a study just released by the Florida Yacht Brokers Association (FYBA) and the
Marine Industries Association of South Florida (MIASF).
The new law puts an $18,000 sales-and-use tax cap on boats purchased or brought into Florida.
Research indicated that Florida’s marine industry was losing sales to nearby states and foreign countries
with lower or no sales taxes at all.
The new sales-and-use tax cap generated in excess of $13.46 million in direct sales tax revenue for the
state, compared to a $1.5 million first-year loss that had been projected by a Florida legislative staff
analysis. Thomas J. Murray and Associates Inc. conducted the initial research and subsequent survey.
Prior to July 1, 2010, all boats sold and or delivered in Florida were subject to a six percent sales-and-use
tax, unless specifically exempt. A new 34-ft. powerboat costing $400,000, for example, would cost
$24,000 more in taxes. In comparison, South Carolina has a $300 sales tax cap on boats and in North
Carolina the cap is $1,500. No sales taxes are levied in the U.S. and British Virgin Islands as well as the
Cayman Islands. As a result, more than six out of 10 buyers of boats sold by Florida brokers were
registering and operating their boats outside of Florida in order to legally avoid paying Florida’s sales tax.
Especially hard hit by the Great Recession, the state’s $18 billion marine industry which employs 220,000
Floridians, sought help from the Florida legislature pointing out that the state’s six percent sales-and-use
tax was counterproductive. Small business owners argued that it provided an incentive for Floridians to
purchase boats out of state and maintain and provision them elsewhere, resulting in a loss of jobs and
economic activity in Florida. The hefty use tax also discouraged non-residents from bringing their boats to
Florida for service and provisioning.
Among the survey’s findings:
• The average sales price for post-cap transactions in Florida was $907,002 - nearly double the
pretax value of closings taking place in Florida prior to the cap.
• In the post-cap era, transactions for which either no sales tax was paid, or the closing was
conducted out of state, dropped from 21.5 percent in the pre-cap era to an estimated 12.8
percent following implementation of the sales tax cap.

Admin Edit: Promotional Rhetoric Removed.

About Florida Yacht Brokers Association
The Florida Yacht Brokers Association (FYBA) is composed of more than 1,100 members representing
over 400 businesses. Each member is required to not only abide by a code of ethics to protect the public
against fraud or misrepresentation, but to endeavor to eliminate any practices which could be damaging
to the public or to the integrity of the yacht brokerage profession.
About Marine Industries Association of South Florida
Marine Industries Association of South Florida (MIASF) members - comprised of marinas, boatyards, boat
builders, megayacht manufacturers, yacht and charter brokers, craftsmen, technicians, marine suppliers,
wholesalers and retailers plus a wide range of other marine-related businesses - are primarily located in
the South Florida region to serve this world-renowned marine community known as "The Yachting Capital
of the World."