Washington State Boat Taxes Could Double

[Alaskan Sea-Duction]

From Recreational Boating Association of Washington.

Dear RBAW Members and Supporters,

On Monday afternoon, we learned that the State Senate Transportation Committee would be proposing to double the Watercraft Excise Tax paid by boaters, as one revenue source among many to pay for a new transportation revenue package.

While we understand the need for the state to invest in transportation infrastructure, it is extremely unfair to double the Watercraft Excise Tax. We boaters are already the only users of the state’s roadways, waterways, and air space to pay a percentage-based excise tax to the state. Cars don’t pay that to the state anymore, and neither do motor homes, planes, or helicopters. Doubling a tax on the one group paying a percentage tax to the state that no one else is, is completely wrong.

Northwest Marine Trade Association CEO George Harris and I strongly objected to this proposal at a Senate Transportation hearing this morning – where we only had 30 seconds to testify. Click below to view our testimony:

Bob Wise, RBAW President Testimony

https://vimeo.com/533781549

George Harris, NMTA President Testimony

https://vimeo.com/533778684

RBAW and the NMTA are teaming up on an Action Alert to all boaters this evening. The legislative session ends on April 25 which is in just 19 days, so we need you to act now and use your voice to object. We urge you to contact your lawmakers right away and tell them that you do not support this tax increase - to do this you can click on the link below to access the VoterVoice system. It will prompt you to enter your name and address and will send your Senator and State Representatives a message that you do not support this tax increase.


If you have questions please contact Andrea Pierantozzi, RBAW VP Administration or Doug Levy, RBAW Lobbyist.

Thank you, and please act now.

Bob Wise

RBAW President

 

[kthoennes]

I remember when the topic of WA state excise taxes on boats came up in another recent thread, it was just shocking what you WA boat owners pay. Zero property taxes on boats here and my state reg costs $24. The contrast is incredible.

 

[SteveD]

On the other hand, Washington State residents pay no income tax, and a sales tax that is in line with other states ~10%. Relative to New York and California, we are very under-taxed and what taxes we have are severely regressive.

 

[Alaskaflyer]

How do they calculate FMV on a long depreciating vessel from the 80's or older?

 

[Nomad Willy]

How could they say no to a guy named “Wise”?

 

[Alaskaflyer]

How could they say no to a guy named “Wise”?

I don't know, but it might be easier to do so when you testify in a casual shirt and ballcap.

 

[kthoennes]

On the other hand, Washington State residents pay no income tax, and a sales tax that is in line with other states ~10%. Relative to New York and California, we are very under-taxed and what taxes we have are severely regressive.

Yes, everything is relative, but then we pay no state income tax here either and sales tax is 6% -- but then the boat is a popsicle on jack stands Nov - April. Trade-offs in life.

 

[Portage_Bay]

How do they calculate FMV on a long depreciating vessel from the 80's or older?

I asked that question last time I registered my boat. It's based on the purchase price when you bought the boat then depreciated annually. I don't know the depreciation schedule.



Just guessing, for a used boat you arleady own and are bringing in from another state / country they probably have a data base.


And guessing again, if you disagree with the state's valuation of your boat's market value you might be able to challenge it as you would real estate appraisal. Maybe asking a broker to look it up on sold boats and evaluate your boat.

 

[sunchaser]

On the other hand, Washington State residents pay no income tax

Ahhh, but proposed legislation is in the works to adjust this oversight via capital gains, bonds etc. Washinfornia is moving right along to keep pace with CA and the Feds in grabbing more income from those nasty rich people.

 

[AlaskaProf]

I remember when the topic of WA state excise taxes on boats came up in another recent thread, it was just shocking what you WA boat owners pay. Zero property taxes on boats here and my state reg costs $24. The contrast is incredible.

Do you pay income tax? They don't; that revenue is going to come from somewhere.

 

[Ka_sea_ta]

Wa state has other means of collecting monies from boaters. I.E. the department of natural resources (DNR) manages most of the tide lands and commercial entities lease that space or actually the right to use the water above those tide lands. In our case I own a slip in a condo marina. The marina owns the land to the mean high tide level, as well as the floating docks that sit over the DNR managed tide lands. there are 54 slips in our marina the annual lease fees paid to the DNR by our marina is $56,000. The state finds ways to get money some are more visible then others.

 

[kthoennes]

Nope, no state income tax either. We may have the lowest non-federal tax burden in the United States. That's one reason so many RVers and migrant boaters register here and get mail forwarded from here, and declare residency here. Although when it comes to boats, I know some money-hungry states track your boat to see how much time it spends in state waters. Heck, even Nebraska on the opposite shore of the Missouri River does that sometime, to make sure boaters aren't ducking registration fees and taxes by mooring on the SD side. Me, I'm a legitimate SD resident and our boat is moored on the northern side of the river so no dodging or dancing necessary.

Do you pay income tax? They don't; that revenue is going to come from somewhere.

 

[Bill V]

On the other hand, Washington State residents pay no income tax, and a sales tax that is in line with other states ~10%. Relative to New York and California, we are very under-taxed and what taxes we have are severely regressive.

I hope we never open that door to a state income tax. Real estate taxes are crazy, our $30 car tabs didn't last long and the Seattle/Tacoma metro area attempts to dictate to the rest of the state how we should pay more of their areas transportation costs. I prefer not to join the Cali and New York tax brackets.

 

[Marco Flamingo]

I remember when my car was old enough (+30 years) to get WA collector vehicle plates. Licensing fees dropped way down. By statute, the car could only be used to attend parades, touring, club events, and occasional pleasure driving. Not every day commuting to work, grocery shopping, etc.

But what about my boat!! I never take it to work or grocery shopping. And my boat just turned 30. Where's my annual $12 collector boat sticker!!

 

[IRENE]

Write to your legislators...

Here is a link (below) to votervoice (dot) net, a quick and easy way for WA vessel registrants to share your opinion with your elected officials. Please consider participating, and take a few minutes to share it with your friends, family, and neighbors.

https://www.votervoice.net/mobile/NMTA/Campaigns/83595/Respond?vvsn=BAAAAAuVACLaUAA_v_X7FBA

 

[DDW]

Another interesting tax in Washington: if you stay as a transient in a marina for longer than 28 days, you get assessed property tax on the slip you occupied, and that is retroactive to the day of arrival. So the 29th day is very expensive.

 

[twistedtree]

Another interesting tax in Washington: if you stay as a transient in a marina for longer than 28 days, you get assessed property tax on the slip you occupied, and that is retroactive to the day of arrival. So the 29th day is very expensive.

That's a new one. And published info on it, ideally an actual statute?

 

[HiDHo]

The cost of government services is payed by taxation. Your 30 second opinion that it’s not a legal tax gives you a clue to how much credence the taxing authorities give you. Your best option is thru the courts.
The best way to combat unfair taxation is by moving to a better managed state.

 

[backinblue]

Could someone explain what the current tax is and what it is doubling to?

 

[Portage_Bay]

0.005 of fair market value

https://dor.wa.gov/taxes-rates/other-taxes/watercraft-excise-tax

 

[backinblue]

That doesn't sound too terribly bad, but depends on how it relates to all other taxes. Although doubling it does not sound like a fair adjustment. Do you pay a property tax on vehicles? I notice this says "in lieu of property tax". Also, do you pay a sales tax when purchasing/registering the boat? Sorry for all the questions, just trying to make fair comparisons.

 

[Airstream345]

In WA we pay taxes on the vessel at time of purchase (sales) or registration (use) to the tune of about 10% (this varies slightly by county in WA). Then we also pay a yearly excise to the tune of 0.5% of the fair market value of the vessel (as determined by the state).

From the WA DOR:


"The watercraft excise tax generally applies to all registered boats that are 16 feet or longer or equipped with a motor capacity of more than 10 horsepower. The tax is 0.5 percent of the boat's fair market value and paid on an annual basis."

As stated in the OP's original post; boaters are the only group paying a yearly percentage based tax into the transportation fund. The proposed legistration would double the excise tax to 1%

So to run the simple math, say you buy a nice used trawler for about $300K. Right away you write a check to the WA DOR for $30K in sales/use tax and then you pay $1,500 per year in excise tax. Doubling that mean's you be paying $3,000 a year. If you kept the boat for 10 years in WA you will have paid the state $60K in taxes or 20% of the purchase price of the vessel. In reality it's less as you would assume the FMV declines over those ten years.

Still, it's an expensive state for boat ownership. Higher priced boats are sometimes purchased under schemes to avoid these taxes (under an LLC for example).

Most "regular boaters" I talk to about this don't mind paying their fair share but doubling the yearly taxes under the guise of "propert taxes" on just one small user group who already paid sales tax on the vessel seems unfair. More so when you don't know where those taxes go exactly...ports? roads? general fund?

 

[Portage_Bay]

The best way to combat unfair taxation is by moving to a better managed state.

Here's an interesting link State-Local Tax Burdens by State Map The data are old, from 2012, but it still is useful to give a state by state comparison. Because it is tax burden as a percentage of state income it is useful only in the most general sense because an individual's tax burden will vary.

 

[friz]

Another interesting tax in Washington: if you stay as a transient in a marina for longer than 28 days, you get assessed property tax on the slip you occupied, and that is retroactive to the day of arrival. So the 29th day is very expensive.

You are assessed property tax on property you do not own?

 

[Retriever]

That's a new one. And published info on it, ideally an actual statute?

I think it’s called the leasehold excise tax: https://dor.wa.gov/sites/default/files/legacy/Docs/Pubs/Misc/LocalGovernment/LET-ETA.pdf

 

[Portage_Bay]

I think it’s called the leasehold excise tax: https://dor.wa.gov/sites/default/files/legacy/Docs/Pubs/Misc/LocalGovernment/LET-ETA.pdf

Thank you, that explains it pretty well.

 

[RonR]

I'm not all that old, but I remember back in the 90's many boats and RV's and expensive cars were all registered in Oregon to avoid that Washington taxes on tabs. Then we voted in $30.00 tabs.... And they all switch back.

I don't mind paying my fair share, but to double it seams a bit much.
I think back in the day it was popular to swap out to a Documented status, and avoid the yearly tax tab. But then a lot of marina's required you to display a tax tab for the year regardless if you were Documented or Registered in Washington. Am I correct?

Also I disagree with how they assess value on cars/boats.
I just bought a little MG for 3k. The State said it was valued at 10k and that I had to pay the tax on 10k. Or I could have it appraised and that value would then be taxed. I checked around and most places wanted 300-350.00 for the appraisal. So I just payed the bill.
3000.00 car, 1100.00 for tax/tabs/plates.....

 

[DDW]

That's a new one. And published info on it, ideally an actual statute?

Possibly it is a county statute, not state, I did not look into it. Marina is Cap Sante in Anacortes, owned by the city. But they told me it isn't the marina doing this and the city doesn't get the money, the state (or maybe county) does. I could leave for one day, then return for another 28 to avoid it. I haven't stayed that long in any other Washington marina.

Edit: looks like someone has chapter and verse above. Although in the examples in that document it makes it appear that it would only be $10 or so a month, and in fact it was way above that. I had to stay beyond the limit as I was working on the engine and not mobile when the date came, it was closer to 20% of the total bill as I recall.

 

[Alaskan Sea-Duction]

What is surprising about Washington State is how not boater friendly they are with the thousands upon thousands of boats in Puget Sound. Especially in King and Peirce County. Yet tax wise Washington is one of the worse. Stepping aside any political discussion, you get what you voted for.

 

[gsholz]

And yet, boats sell like hot cakes and you can't find a 50+ foot slip anywhere in WA.

The DOR would take this as an indication that there is more room to increase boating taxes. Face it, boating is a luxury and a boater's unlimited ability to pay is taken for granted by the government and the service industry.