What are the tax responsibilities of the boat owner/operator?

The owner/operator of a fishing boat used for charter is required to have an active tax registration with the Department of Revenue (DOR) even if they use a charter company to collect and remit sales tax on their behalf.

Third Party Charters
The fishing boat owner/operator must report the fishing charter income under the retailing classification of the business and occupation (B&O) tax on income earned through a third party charter company. The owner must also report the charter income under the retail sales tax classification and take a “Sales Tax Paid by Charter Agent” deduction under Other Deductions. There is no deduction allowed for the amount the charter company keeps as their commission for providing charter services.

Independent Charters
The fishing boat owner/operator must report the fishing charter income under the retailing classification of the business and occupation (B&O) tax on income earned through independent charters where no charter company is used. The owner must also report the fishing charter income under the retail sales tax classification.

Small Business B&O Tax Credit
In either case, the boat owner/operator may qualify for the small business B&O tax credit.