Did Texas's new boat and boat-motor tax apply to canoes, kayaks, rowboats, rafts, paddle craft, and electric motors?

Plain-English summary

The Comptroller explained Texas's then-new 6.25% sales and use tax on certain boats and boat motors. It covered sailboats, jet skis, most other boats, and outboard motors, but excluded canoes, kayaks, rowboats, rafts, and any other vessel designed to be propelled by paddle, oar, or pole. Electric motors were excluded too.

For covered purchases, tax was generally due within 20 working days. The taxable value was the purchase price, including attached accessories, less the value of a boat or motor traded to the seller. The letter also described penalties, credit for similar tax paid to another state, a $15 use tax for each boat or outboard motor brought by a new resident, and exemptions for federal, state, and state political-subdivision purchasers.

What this means for you

The craft's designed method of propulsion controlled the exclusion described in the letter. A paddle-, oar-, or pole-propelled vessel was outside the new boat-tax provision, while sailboats, jet skis, and most other boats were inside it. Gifts and even trades were stated to be nontaxable.

Common questions

Were canoes and kayaks taxed under this provision? No.

What about rowboats, rafts, and similar paddle craft? They were excluded if designed to be propelled by paddle, oar, or pole.

Were outboard motors covered? Yes. Electric motors were not.

Who collected the tax? Either the County Tax Assessor-Collector or the Texas Department of Parks and Wildlife at registration or titling.

Citations and references

• The letter describes a new Tax Code boat-and-boat-motor provision but does not give its section number.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9109001L

Original ruling text

Note: This document is also indexed as a boat/boat motor tax document under STAR 9109L1150D10.

September 26, 1991

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Dear

In my letter to you last month I mentioned that the Legislature has

changed the way boats and boat motors are taxed. The Legislature

created a new section of the Tax Code to tax the sale of certain boats

and boat motors. The new tax is similar to the motor vehicle tax statute.

The tax is collected by either the County Tax Assessor-Collector or the

Texas Department of Parks and Wildlife at the time of registration or

titling. County Tax Assessors-Collectors who do not handle boat

registration or titling will not be required to handle the tax.

Boats purchased in this state or outside this state and brought into

this state by a Texas resident are subject to 6.25 percent sales or

use tax. The taxable value of the boat or motor is the purchase price,

including all accessories attached at the time of sale, less the value

of a boat or motor traded in to the seller.

Boats taxed under this provision include sailboats, jet skis and most

other boats, except canoes, kayaks, rowboats, rafts or any other vessel

designed to be propelled by a paddle, oar or pole. Outboard motors also

are taxed under this provision. Electric motors are not included.

Penalty is imposed in the same manner as with motor vehicle tax. The

tax is due within 20 working days from the date of purchase or when

the boat or motor is first brought into this state. If the tax is not

paid when due, 5 percent penalty is due. If the tax is not paid within

30 days after it is due,, an additional 5 percent penalty is due.

Credit for a legally imposed similar tax paid to another state may be

allowed.

New residents to the state will be subject to $15 use tax on each boat

and/or outboard motor brought into the state. When a boat with an

outboard motor is registered or titled, $30 tax will be collected. There

is no requirement that the boat or motor be registered to the new resident

in another state.

Gift and even trade transactions are not taxable.

There are a few exempt purchasers under this provision. Only the federal

government, the state or the state's political subdivisions (cities,

counties, etc.) are exempt.

The boat tax affidavit is being combined with the Texas Department of

Parks and Wildlife's applications for title and registration. The tax

receipt is also being combined with the Texas Department of Parks and

Wildlife's receipt for registration and titling. The forms will be

provided to you as soon as possible. The Texas Department of Parks and

Wildlife will distribute the forms.

The tax receipt is not expected to be available by October 1. Until it

is available, please indicate the net dollar amount of tax and penalty

due on the "other" line in the lower left-hand portion of the Texas

Department of Parks and Wildlife receipt for title and registration that

you are currently using. Simply write "Tax $XX.XX."

A monthly report similar to the motor vehicle tax report will be filed.

The report will consist of a calculation page and a page on which the

receipt number issued and tax amount collected will be listed. There

will be no receipt inventory page (section II of the motor vehicle report).

Your report and remittance is due on the 10th of the following month.

Your remittance may be by check. However, if you wish to remit using

the electronic funds transfer system, please give us a call at

1-800-252-5555, extension 3-3630.

Additional information will be provided to you as soon as possible. If

you have any questions, please call one of our tax specialists at

1-800-252-5555. Our Austin number is 1-512-463-4600.

Sincerely,

Lucy Glover

Manager

Tax Administration Division