A state attorney says "cruises to nowhere" owe taxes. But a cruise lawyer argues the ships are exempt from taxation.
By Associated Press
Published October 10, 2003
TALLAHASSEE - Any ship that docks in Florida and lets passengers gamble once it leaves state waters on "cruises to nowhere" owes state taxes, a state lawyer told the Florida Supreme Court.
But an attorney for New Sea Escape argued Thursday that its ship is exempt because it is a Bahamian vessel engaged in foreign commerce.
The legal issue before Florida's high court is the tax liability of cruise ships that leave Florida ports, travel outside the state's territorial waters before opening up their casinos, and return to Florida several hours later.
The state Department of Revenue contends New Sea Escape Cruises owes more than $1.4-million in back taxes and penalties for cruises that departed from and returned to Port Everglades in Fort Lauderdale.
Nicholas Bykowsky, arguing for the department, said all the transactions on such cruises are taxable.
The ships don't qualify for a partial exemption for foreign commerce because they never travel to another country, he said. That means the trips must be considered intrastate commerce rather than foreign commerce, Bykowsky argued.
But Edna Caruso, a lawyer for New Sea Escape Cruises, told the justices that its ship was engaged in foreign commerce.
One of the issues facing the Supreme Court involved boundaries of Florida and international waters - and the gap in between. Florida's territorial waters extend 3 miles off its Atlantic coast, but international waters don't begin until at least 12 miles offshore.
