Personal property tax
Commercially operated vessels exempted from the watercraft excise tax are subject to the state personal property tax levy. Vessels used exclusively for commercial fishing purposes and U.S. Coast Guard documented vessels used primarily for commercial purposes such as charter and time-share boats, tugs and barges, are subject to this tax. The tax rate is limited to no more than $3.60 per $1,000 of market value.
Vessel listing requirements
Vessels subject to the personal property tax are listed with and assessed by the Department of Revenue. All vessels are taxable for the entire year unless they are apportionable in which case an owner may deduct those days the vessel is out of state. They may also deduct those days that the vessel is in state exclusively for repairs.
The tax is a personal property tax and is based on the status of the vessel in the state. It is not based on use, like the watercraft excise tax for pleasure craft.
Each January, the Department of Revenue sends a Watercraft Personal Property Notice of Value to the vessel owner of record. This documents the market value and asks owners to report how many days the vessel was in the state in the previous year.
For more information please see the flyer on Commercial Vessel Tax.
Generally, commercial vessels are subject to either sales tax or use tax unless used in interstate or foreign commerce or used primarily in deep sea fishing.
Derelict vessel removal fee
Commercial vessels must pay a derelict vessel removal fee of $1 per foot of vessel length. This fee is collected at the same time as the personal property tax and doesn’t apply if no personal property tax is due.
Tax based on ownership
The Department of Revenue bills and collects personal property tax. The tax is based on who owns the vessel on January 1 of a given year. This is the assessment year.
In the year after the assessment year, the vessel owner is mailed a tax statement in mid-February. Full payment is due April 30.
Example: Commercial vessel Z is purchased on August 14, 2015. The new owner's first taxable year is 2016, as January 1, 2016 is his first January 1 of ownership. The 2016 tax will be collected by April 30, 2017, and the tax is based on the number of taxable days the vessel was in the state in 2015.
Vessel sold or converted to pleasure use
If the commercial vessel is sold or converted to pleasure use in the middle of the year, the personal property tax is still the responsibility of the owner of record on January 1 of that year. If selling the boat, include the tax responsibility in the contract and call the Department of Revenue’s commercial vessel tax unit at (360) 705-6203 for the amount of tax due. If converting the vessel to pleasure use, contact the commercial vessel tax unit for guidance.
Property tax decal requirements
Vessels listed on the personal property tax rolls will receive a permanent orange decal that must be displayed on the hull showing the vessel is registered.
Commercial vessels that look like pleasure craft and are U.S. Coast Guard documented are also required to display a second decal from the Department of Revenue, which changes color each year in coordination with the Department of Licensing watercraft excise tax decal color.
How to register
To list your vessel, complete and return a Commercial Vessel Tax Personal Property Listing Application to the Department of Revenue.
For more information, call the commercial vessel tax unit at (360) 705-6203.