Excise Tax

[joe.baar]

I believe the State of Washington is overvaluing my 1995 28TE for taxation purposes. The amount decreases a little each year so I believe it's based on some depreciation formula related to the sale price. Before I contest the $450 or so we pay for vessel registration each year I'd like to have some solid information about current asking and selling prices for these boats. I know this topic has been discussed here some time during the past couple of years but was unable to find the table I remember seeing by using the AOG search function. Any suggestions where to look?

[jcollins]

Hi Joe,
You could use http://www.nadaguides.com/ to get an idea of value. It's always less than purchase cost, which in this case, you would want correct? My boat would be around 22k, with a suggested list of 84k, according to NADA.
You pay this excise tax yearly? What is the percentage? I thought Maryland was bad. We pay 6% sales tax at purchase plus a couple hundred for registration and yearly sticker for documented boats is 10.00.

[loubennett]

John,

One small correction on Maryland taxes. The tax paid when a boat is purchased is an excise tax, not the regular sales tax. This is an important distinction since the excise tax on boats did ot increase when the sales tax increased. It is still 5%.

[jcollins]

John,

One small correction on Maryland taxes. The tax paid when a boat is purchased is an excise tax, not the regular sales tax. This is an important distinction since the excise tax on boats did ot increase when the sales tax increased. It is still 5%.

Lou,
Thanks for the correction. I didn't realize that. So, it's 1% less to purchase a boat? No sales tax? Wish they would do that for cars. Sharon's new car is coming in next week.

[joe.baar]

John,
Thanks so much for the NADA guide link. I couldn't find a category for the Yanmar 315 hp diesel but using the "300 hp" diesel they do have, I came up with average retail of $34,075 using all the listed options for our boat, with a suggested list of $88,900.

At Bellingham, Washington in 2007 we paid about 9.2% sales tax. Our annual Washington State Watercraft Excise Tax is 1/2 of 1% (0.0005) of whatever the Department of Licensing believes the "fair market value" is. I sent them a letter asking what their procedure is for determining that value. Our annual fee for obtaining a license here is payment of that excise tax assessment, which then includes state registration of the boat and the state's sticker. I believe they charge the same for the sticker if your boat is documented, but haven't researched that part yet.

In Washington State we pay no state income tax (yet) but there's a basic 6.5% state sales tax rate to which counties and municipalities add extra shares until, if you reside in the City of Seattle, the percentage is now 9.5. This tax is collected on every sale, including those of professional services, except for non-restaurant food purchased for home consumption. Vehicles of all kinds are assessed excise tax every year, apparently based upon that market value, in addition to the sales tax paid each time the vehicle is sold.

Sorry, this is way more than you wanted to know. We appreciate the discussion. If I can get the State in a head-lock over "fair market value" I'll let you know the outcome.

[jcollins]

That is interesting. Our neighboring state, Delaware, is like that. No sales tax but they pay a luxury or excise tax for large purchases. I pay more for my truck (90.00 per yr.) than the boat. I mentioned 10.00 per yr. for the boat before. It's acutually 10.00 for 2 years for documented vessels. Maryland uses "the BUC book" for valuation of boats. http://www.bucvalu.com/