Boat dealer: one who is engaged in selling boats it owns.
Boat broker: a person who, for a commission or fee, brings buyers and sellers together and assists in negotiating transactions on behalf of others. See WAC 458-20-159
Reporting requirements: of dealers selling vessels they own can differ from those for brokers selling vessels owned by others.
Dealers: making retail sales to consumers report under the retailing B&O tax classification and collect retail sales tax.
Dealers selling boats for subsequent resale (without intervening use by the buyer) may accept a valid reseller permit from the wholesale buyer. In this case, the sale is reported under the wholesaling B&O tax classification and sales tax is not collected.
Brokers: Whether selling in their own name or in the name of the boat’s owner, in virtually all cases, brokers are responsible for collecting from the buyer and remitting sales tax directly to the Department of Revenue on all sales of boats to consumers where they are involved in the consummation of the transaction and are paid a commission based on the transaction.
Brokers report their commissions under the service and other activities B&O tax classification. They may also have other reporting requirements depending on how the vessel is sold.
Brokers selling property in their own name: report the sales under either the retailing or wholesaling B&O tax classification (based on whether a valid reseller permit is received) on the full amount of the sale (selling price).
Brokers making retail sales of property in the boat owner’s name and who maintain records distinguishing such transactions in accordance with WAC 458-20-159 (Consignees, bailees, factors, agents, and auctioneers), must report such income under the retailing B&O tax classification. In this case, the broker is allowed to take a deduction under the retailing classification for the same amounts (identify as "income reported as an agent"). The net effect is that only the commission income will be subject to the B&O tax under the Service and Other Activities classification. See WAC 458-20-159.
In addition, brokers must report sales to consumers under the retail sales tax classification (or the use tax classification if there was no instate participation in the sale).
In all cases, for the Department of Revenue to recognize a valid broker or agent relationship, the books, records, and sales contracts or agreements must meet the conditions explained in WAC 458-20-159 which defines “agent” and “broker.” The records must show all of the following:
- the transactions were made in the name and for the actual account of the principal
- the name of the actual owner of the property for whom the sale was made, or the actual buyer for whom the purchase was made
the amount of gross sales, the amount of commissions and any other incidental income derived by the broker or agent from these sales
Exceptions to the sales tax collection obligation
Brokers will be relieved from liability for the collection of the sales tax from buyers when they receive a commission on the sale and the entire transaction is closed directly between the owner and the buyer. These sales must be reported to the Department of Revenue on the Broker's/Agent’s Transaction Report. After receiving compensation from the transaction, brokers have 10 days to report the sale to the Department of Revenue. This provision applies to both listing brokers and selling brokers.
Sales closing in the presence and/or control of the selling broker who receives compensation from the sale are not exempted from the obligation to collect retail sales tax.
Brokered sales of vessels–determining the place of sale
The place of sale on a brokered vessel transaction is the broker’s in-state office location. RCW 82.32.730(7) requires vessel sales to be sourced to the location “from which delivery is made to the consumer.” See Special Notice: Brokered Sales of Vessels - Determining the Place of Sale.