Washington State Boat Taxes Could Double

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Airstream345 said:
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?
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The other points of objection from NMTA and RBAW:
1. About 96% of boats in WA are trailered and the vehicles and trailers get taxed as well. NMTA has brought this up a potential double taxation argument.

2. The money goes into the general fund. Boaters put in more than they get out already and these revenues are not specifically earmarked for marine related projects and programs.

Projected revenues from this increase and other revenue sources are forecasted to be used on a big list of projects:

http://leap.leg.wa.gov/leap/Budget/Detail/2021/stProjectList040621.pdf

I agree with many i've talked to in the past day or so. We don't mind paying fair and equitable taxes and fees that funnel into programs that improve boating and overall quality of life. We even understand that many of the infrastructure projects are needed and many overdue. We just don't want to be the well that Olympia keeps coming to when they need more. BTW, even with COVID-19, revenues increased 4.3% (by the DOR own stats) in 2020.

Final point. Working with parks and DNR through RBAW i get to see how interested and passionate they are about the area and boating in WA, they really do have boating interests front and center. They do a lot with a little relatively speaking.

-tozz
 
RonR said:
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?
Click to expand...

Also, unless your vessel is explicitly exempt, you now have to register in WA even if USCG documented.

https://www.dol.wa.gov/vehicleregistration/docvessels.html

-tozz
 
kthoennes said:
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.
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Wifey B: I know you love your home, but SD isn't exactly on the top ten list of places people are flocking to live. Overall SD is near the bottom in tax burden in spite of property taxes in the top half of the states. Taxes would have to be negative for me to give up sunshine and ocean although I'm sure it's a lovely place to live. :)
 
Retriever said:
I think it’s called the leasehold excise tax: https://dor.wa.gov/sites/default/files/legacy/Docs/Pubs/Misc/LocalGovernment/LET-ETA.pdf
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So that makes me wonder -- if you're being taxed on the use of a slip ultimately owned by someone else, does that mean the owner is therefore excused from his tax payment, or do they essentially tax the same property twice? (facetious question, I'm pretty confident I know the answer) So then by that logic, if I rent an apartment in Washington, they ought to assess taxes on both the owner and the tenant for the same property. Brilliant!

(I don't know how y'all live there. Amazing what citizens will tolerate.)
 
BandB said:
Wifey B: I know you love your home, but SD isn't exactly on the top ten list of places people are flocking to live. Overall SD is near the bottom in tax burden in spite of property taxes in the top half of the states. Taxes would have to be negative for me to give up sunshine and ocean although I'm sure it's a lovely place to live. :)
Click to expand...

Well, if we want to look at growth rates, California is about flat or losing lately, while Sioux Falls has exploded by around 23% in about the last decade, and the state population has grown by about 10% overall. But of course in a state this small percentages still don't mean a lot of people. That's just as well though, we don't want to become another Austin anyway.
 
kthoennes said:
So that makes me wonder -- if you're being taxed on the use of a slip ultimately owned by someone else, does that mean the owner is therefore excused from his tax payment, or do they essentially tax the same property twice? (facetious question, I'm pretty confident I know the answer) So then by that logic, if I rent an apartment in Washington, they ought to assess taxes on both the owner and the tenant for the same property. Brilliant!

(I don't know how y'all live there. Amazing what citizens will tolerate.)
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According to the DOR FAQ, it is applied to private parties utilizing public property which is not subject to property taxes. Private property leased to a private party is not subject to the LET as far as I can find.

https://dor.wa.gov/sites/default/files/legacy/Docs/Pubs/Misc/LeaseholdExciseTaxQA.pdf
 
kthoennes said:
So that makes me wonder -- if you're being taxed on the use of a slip ultimately owned by someone else, does that mean the owner is therefore excused from his tax payment, or do they essentially tax the same property twice? (facetious question, I'm pretty confident I know the answer) So then by that logic, if I rent an apartment in Washington, they ought to assess taxes on both the owner and the tenant for the same property. Brilliant!

(I don't know how y'all live there. Amazing what citizens will tolerate.)
Click to expand...

Your analogy fails to capture the situation accurately.
 
Alaskaflyer said:
Your analogy fails to capture the situation accurately.
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Yes, you're right, if you're talking about getting taxed on the 29th day of using a *public* slip, that is different. You're right, different analogy. More like getting taxed for sitting on a park bench in a city park too long. :cool:
 
Hmmm, that’s a new one to me! I’ve never been assessed property tax in any of my long term moorage slips...
 
Maybe if all boaters in Washington paid their taxes the state wouldn't consider doubling the rate. For example, in my marina of 183 slips, 45 boats are either not currently registered (one hasn't been licensed since 2002) or are not registered in Washington at all. State law says that any vessel, except some commercial vessels, must be licensed if in state waters for 60 days. Unfortunately there is no one enforcing that law.
 
porman said:
Maybe if all boaters in Washington paid their taxes the state wouldn't consider doubling the rate. For example, in my marina of 183 slips, 45 boats are either not currently registered (one hasn't been licensed since 2002) or are not registered in Washington at all. State law says that any vessel, except some commercial vessels, must be licensed if in state waters for 60 days. Unfortunately there is no one enforcing that law.
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Port of Everett requires current State license.
I am unsure of how much its enforced, but every year they ask me for a current copy of my registration and insurance.
 
I'm at Oak Harbor. A city facility over state tide lands. We pay state leaseholder taxes. It shows up on the monthly statement.

I think some are misunderstanding regarding the 28 days and then you pay taxes. The state defines transient moorage as less than 30 days. So it is any boat moored 30 days or more that pays the tax. In other words long term moorage.

Regarding registration and insurance Oak Harbor Marina requires proof of registration and insurance submitted annually. They are beginning to be strict about the policy.
 
As someone else pointed out, you get what you vote for. Not that my state is much better, but any state with a thriving boating industry should encourage it, not tax it out of existence. In my state of CT, they raised taxes on boaters until it started to affect all the marinas and jobs of workers that support the boaters. Major boat yards and manufacturers up and left and the new and used boat markets in the state suffered. Finally someone woke up and reversed much of that. Without getting into detail, boating in now more affordable tax-wise than it was 10 yrs ago. Boaters are a minority and viewed as the elite rich so are easy targets. Nobody immediately sees all the jobs that exist because of the boating industry. It also increases quality of life, property values, etc. They may get the message eventually but it takes a long time to reverse things like this.
 
Do you all remember when the federal government starting impose a "luxury tax" on yachts/boats. It was later reversed or stopped. Might see it again.
 
Portage_Bay said:
I think some are misunderstanding regarding the 28 days and then you pay taxes. The state defines transient moorage as less than 30 days. So it is any boat moored 30 days or more that pays the tax. In other words long term moorage.
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You are right, I misstated originally 28 days. It is 29 days, 30 days triggers the tax. Is that the big difference that defines "long term moorage"?

Is someone taxing all the people living under overpasses in Seattle and Portland? That would seem to be the same situation, private use of public land.
 
I guess you guys don't have a clue as to who Bob Wise is.?
Bob owns a number of marinas and also operates another here in Washington.
He is a very respected business person in the software world and without knowing it you probably use a product he developed .
Bob appears have been casually dressed in this video, but often he looks like a fortune 500 guy.

Going after all us wealthy yachtowners is a tactic our state government likes to do on a regular basis.
We pay a fairly steep amount of taxes already in Washington between the sales tax on everything, our ridiculous fuel taxes .
Wasn't there a topic here a few years back when the state absorbed funds collected from boaters and earmarked for boating related spending that went into the general fund?
Hollywood
 
I thought you or someone would focus on the 28 vs 30 days. I'm trying make the point that under 30 days a transient is exempt from the lease holder exise tax. By the state's definition of transient vs long term if you stay 30 days you are long term and the tax is due.

Aside from the discussion of whether boaters are unfairly targeted in the tax code long term moorage clients pay the lease holder excise tax. In fairness at some point transients should pay that tax as well. The state decided that happens at 30 days.

30 days is a hard line. Cross it and you owe the taxes. It's like any other regulatory line. Cross the line and the rules change.

Persons aware of that line can dance around it. Stay 28 days, leave for a day and the clock restarts.

Is it fair? Not necessarily. It just is.

One poster said he crossed the transient to long term line while having repairs done and the lease holder tax came due at about 2% of the bill. That implies to me the state assessed the full year's tax. If I'm right about that then if I were in his shoes I'd appeal on the grounds I was not long term for 12 months and should only be taxed for the duration beyond the initial 30 days.

To make my position clear I'll say in my opinion boaters in Washington state are unfairly taxed.

We pay sales tax upon initial registration. As high as 10%. We pay an annual excise tax when we renew registration. We pay lease holder excise tax on where we keep the boat. We pay sales tax on every purchase, services or supplies, we make for the boat. The only break we get is taxes on fuel.
DDW said:
You are right, I misstated originally 28 days. It is 29 days, 30 days triggers the tax. Is that the big difference that defines "long term moorage"?

Is someone taxing all the people living under overpasses in Seattle and Portland? That would seem to be the same situation, private use of public land.
Click to expand...
 
Im wondering about just not paying. Looks like the penalty is $100.00 VS $3500.00. Not sure who enforces. Is it the coast guard?
 
"The best way to combat unfair taxation is by moving to a better managed state."


FLORIDA registers 30 year old boats ,to be used with no restriction , for a pittance.
 
FF said:
"The best way to combat unfair taxation is by moving to a better managed state."


FLORIDA registers 30 year old boats ,to be used with no restriction , for a pittance.
Click to expand...


Agreed. Vote with your feet, or your prop?
 
In the State of Connecticut property tax is paid on the FMV of motor vehicles. The tax rate varies according to the rate in each town or city. There are 169 towns and cities in the state so taxation can and does vary a lot. This in state that has a state income tax, a healthy sales tax, and receives about $400 million a year from the Indian casinos. So, comparatively speaking, Washington is a bargain tax-wise.
Airstream345 said:
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?
Click to expand...
 
Agreed. Overall, CT is a highly taxed state. However, in regards to boating, it's much better than many others. In fact, when I bought my boat a few years ago, I paid a newly reduced sales tax max of 2.99% on boats.

Boat sales in Connecticut have been up an average of 41 percent per month since the tax was lowered to 2.99 percent, according to industry officials. The increase in sales has also led to a jump in slip rentals and winter boat storage. Boatyards, marinas and service dealers have also hired new employees as a result.

I think that may have been reversed recently, but we still pay no yearly property tax, just a registration fee ($125?). Legislators need to realize that the revenue that a healthy boating industry generates is much more than they will get by over-taxing users and discouraging boating. It sounds like the cost of boating in WA is likely prohibitive to some.
 
magna 6882 said:
Im wondering about just not paying. Looks like the penalty is $100.00 VS $3500.00. Not sure who enforces. Is it the coast guard?
Click to expand...
Where does the$3500 come from?


If you're talking about not paying the lease holder excise tax I don't know how you'd get out of it with permanent moorage. I pay it through the moorage bill. If I didn't pay my bill in full the marina would toss me out. A transient who stays long enough to trigger the tax and doesn't pay may get away with it. They may not. The only way to not pay the tax would be to not pay the moorage bill. Now you're talking theft of services.

As for who enforces it, that would be the state not the CG, it's a state law. Pretty easy to enforce from the state's point of view. The marina makes the tax payments or not.

If you could find a way to pay all but the taxes and not get tossed out of the marina then you're a tax dodger. Big players get away with it all the time. Us smaller players generally get busted and punished for not paying taxes.

I don't know what other marina moorage bills look like but here's mine for Oak Harbor 50 ft covered.
 

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Portage_Bay said:
Where does the$3500 come from?


If you're talking about not paying the lease holder excise tax I don't know how you'd get out of it with permanent moorage. I pay it through the moorage bill. If I didn't pay my bill in full the marina would toss me out. A transient who stays long enough to trigger the tax and doesn't pay may get away with it. They may not. The only way to not pay the tax would be to not pay the moorage bill. Now you're talking theft of services.

As for who enforces it, that would be the state not the CG, it's a state law. Pretty easy to enforce from the state's point of view. The marina makes the tax payments or not.

If you could find a way to pay all but the taxes and not get tossed out of the marina then you're a tax dodger. Big players get away with it all the time. Us smaller players generally get busted and punished for not paying taxes.

I don't know what other marina moorage bills look like but here's mine for Oak Harbor 50 ft covered.
Click to expand...

A little perspective:

In Vancouver BC, 50' covered has no property tax component, but nowhere in the city will it be as cheap as yours.
Mine at RVYC is among the lowest priced covered moorage (or so our YC exec continues to stress) and is around $1k every month for 55'. At commercial marinas in the city, rates are often double that. OK, that is in $Cdn, today just under $.8 US.

You get taxed directly and indirectly, sometimes it is hard to sort out how it is getting through to the taxing authority.
 
Portage_Bay said:
Where does the$3500 come from?


If you're talking about not paying the lease holder excise tax I don't know how you'd get out of it with permanent moorage. I pay it through the moorage bill. If I didn't pay my bill in full the marina would toss me out. A transient who stays long enough to trigger the tax and doesn't pay may get away with it. They may not. The only way to not pay the tax would be to not pay the moorage bill. Now you're talking theft of services.

As for who enforces it, that would be the state not the CG, it's a state law. Pretty easy to enforce from the state's point of view. The marina makes the tax payments or not.

If you could find a way to pay all but the taxes and not get tossed out of the marina then you're a tax dodger. Big players get away with it all the time. Us smaller players generally get busted and punished for not paying taxes.

I don't know what other marina moorage bills look like but here's mine for Oak Harbor 50 ft covered.
Click to expand...




I understand they are considering doubling the .005 excise tax. I payed $3750.00 last year.
 
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