Tax cap on boat repairs goes into effect July 22, 2015
The newly passed $60,000 tax cap on boat refits and repair jobs over $1 million went into effect July 1, and the state Department of Revenue already know how it will be implemented.
“This is a benefit for the state that will allow Florida’s nation-leading marine industry to attract and retain vessels for repair and refit revenue, as well as create thousands of jobs,” said MIASF Executive Director Phil Purcell.
To qualify for the cap, jobs will need to be billed with a single invoice in one refit or repair visit.
MIASF held a meeting this month with a Karen Lake, a tax specialist with Berkowitz Pollack Brant, representatives from several local yards and management companies that are anticipating projects exceeding $1 million and the vendors that would provide the services. Lake is working on behalf of MIASF to make sure we have the correct language and limit misinformation and confusion.
The yards provided different scenarios on how refits work and are figuring out the liabilities and responsibilities and how to still be able to provide savings to the client.
The Department of Revenue is expected to complete its review by July 22, when the results will be presented to MIASF anchor members. In informal discussions, the department has indicated that contracts that specify a boat is being refurbished, are considered open-ended and qualifies.
Several yards have reported that they already have projects in the works that will benefit from the tax cap.
“The local marine industry’s skilled craftsmen and its proximity to the Caribbean, Latin America and Europe have resulted in increased demand for repairs to vessels of all sizes,” Purcell said. “We will now be able to compete with states along the eastern seaboard and international yards. This tax cap will enable us to leverage this opportunity for additional jobs and economic growth.”
The proposal is modeled in part on the sales tax cap on purchases that capped yacht sales and use tax at $18,000 that MIASF partnered with the Florida Yacht Brokers Association to pass in 2010. MIASF was assisted by advocates including Floridian Partners, Sen. Jack Latvala and Sen. Joseph Abruzzo in this effort to spread the word about the importance of protecting the current positive marine environment in the state.