Nonresident sales and use

Vessel sales to nonresidents

Nonresidents of Washington may purchase vessels and take delivery in Washington without paying sales tax or use tax when the vessel is U.S. Coast Guard documented or pre-registered by the state or country where the vessel will be principally used after the sale and the vessel will be removed from Washington within 45 days of delivery.

Customs, moorage, fueling or other documentation may be used to show a boat has been removed from Washington if it identifies conclusively the particular boat in question and the date it entered into or was in another state or country. The date must be within 45 days of the boat having been purchased in Washington.

Sellers must document a nonresident sale by obtaining the following:

  • completed exemption certificate from the buyer (see individual and non-natural person examples); and
  • a record of the required identification issued by the correct out-of-state jurisdiction (one piece must be a current operator's license or state identification with a photograph).

In addition, the seller should watch for indications of Washington residency, and should remind the nonresident buyer that the vessel must be removed from Washington waters within 45 days of the date of purchase.

Example: John Blair is a resident of another state and has no known ties to Washington. Mr. Blair purchases a vessel from OK Boats, a dealer in Port Angeles. Mr. Blair intends to visit with friends in the area for another three weeks before returning to his home state with his new boat. OK Boats obtains a completed nonresident exemption certificate from Mr. Blair, records Mr. Blair's home state driver's license (which has his picture on it) and informs him that having the boat in Washington beyond 45 days could create a tax liability.

OK Boats reports the sale amount on the retailing B&O and sales tax lines and takes a sales tax deduction for the amount of this sale. The exemption certificate and related documentation must be kept by the dealer in the event of review/ verification by the Department.

References: RCW 82.08.0266, WAC 458-20-238

Nonresident delivery/sea trials

If acceptance by the buyer is conditioned on the boat being seaworthy, delivery does not occur until the sale is finalized and accepted by the buyer. If the seller and the buyer participate in a sea trial to determine its acceptability to the buyer, delivery has yet to occur until it has been accepted as seaworthy. Sea trials are limited to day trips of generally 2 to 3 hours. No overnight trips will be allowed as sea trials.

Nonresident vessel temporary use period

Nonresidents may use their properly registered vessel in Washington for up to 60 days.

A properly registered vessel has:

  • been registered or numbered under the laws of a country other than the United States; or
  • a valid United States Customs Service cruising license issued pursuant to 19 C.F.R. Sec. 4.94, or
  • a valid number under federal law or by an approved issuing authority of the state of principal operation.

After 60 days, a vessel owned by a nonresident becomes subject to registration and use tax in Washington.

Vessels owned by nonresident individuals are allowed to have their vessel in Washington for a period not to exceed 6 months in any consecutive 12 month period without incurring a registration and use tax obligation if before the 61st day of use in Washington, the vessel has been issued a once-renewable 60-day cruise permit by the Department of Licensing indicating when the vessel first came into the state. Taken together, nonresident individuals are allowed to have a vessel in Washington for 60 days without registration. After that, they may obtain a once-renewable 60-day cruise permit from DOL. This totals 180 days. (RCW 88.02.570)

Vessels purchased in Washington by nonresidents must still be removed within 45 days of purchase (unless a use permit issued underRCW 82.12.700 is obtained at the time of purchase of the vessel – see discussion of the one year use permit). Once removed from Washington waters, the vessel can return for the rest of the statutorily allowed nonresident use period. The vessel owner must prove that these requirements are met to sustain the exemption.

Nonresident temporary use Q&A

For nonresidents, how is the time that a boat is in Washington for "commissioning" treated for purposes of the 45-day period and the temporary use period?

Commissioning is the activity of providing upgraded instrumentation, equipment, appointments, etc. If a buyer contracts with a dealer to buy a certain boat, and the dealer contracts with a third party to "commission" it (e.g., add the necessary electronics gear), the 45-day period does not begin until the boat is delivered to the buyer (i.e., after the commissioning).

If the boat is first delivered to the customer and the customer hires a third party to do the commissioning, then delivery has occurred and the clock starts prior to commissioning. However, if the nonresident files a repair affidavit for the time that it is being commissioned, the clock would stop the 45-day period within which a nonresident buyer must remove the boat from Washington for the purchase to be exempt from retail sales tax. The commissioning in this situation would be considered a repair activity for the purposes of the nonresident vessel repair affidavit.

A nonresident purchases a boat from a Washington dealer/broker. Upon taking delivery of the boat, he needs two months of work done on the vessel for commissioning. He files a "Nonresident Out-of-State Vessel Repair Affidavit" with the Department of Revenue. Does this stop the countdown on the 45-day period? When does the 45-day countdown then pick up again?

Yes. The clock starts again when the affidavit expires or the repairs are substantially complete, whichever date comes first.

Is the temporary use period for nonresidents computed on a calendar year basis or on a consecutive 12-month basis?

This period is based on any consecutive 12-month period.

Are boats owned by nonresident trusts considered as being owned by an individual (natural person) or by a fictitious entity (non-natural person)?

Boats that have been irrevocably contributed to a trust are treated as being owned by a fictitious entity (non-natural person), not an individual (natural person). Therefore, such boats owned by a trust that are nonresidents of Washington are not eligible for the extended temporary use accorded to vessels owned by natural persons.

Nonresident vessels held for sale

Nonresident vessels in Washington solely for the purpose of sale and held and/or controlled by vessel dealers or brokers are not subject to the time limit for nonresident use. However, if the nonresident owner uses the vessel in Washington while it is held for sale, use tax is due. Generally, to avoid use tax, a crew may not remain on the vessel while it’s for sale in Washington.

Boat trailers sold to nonresidents

Boat trailers sold to nonresidents are exempt from sales tax if the dealer obtains a completed exemption certificate establishing:

  • the purchaser is a nonresident of Washington with proper identification and the trailer is for use outside of Washington; and
  • the trailer will be removed from their premises under the authority of either a trip permit or valid license plates issued by the purchaser's state of residence (such plates must be affixed to the trailer upon final delivery).

Reference: WAC 458-20-177

Parts sold to nonresidents

Component parts are subject to the same exemptions as the vessel itself if they are:

  • installed by the vessel dealer prior to delivery and acceptance by the buyer
  • delivered as part of the vessel
  • documented in the contract of sale

Starting July 1, 2019, sales of unattached component parts to qualified nonresidents are no longer exempt from retail sales tax if they are delivered to the customer at the point of sale (RCW 82.08.0273). Instead, qualified nonresidents may request a refund of the state portion of the sales tax paid directly from the Department of Revenue. See our Nonresidents webpage for more information.

If the parts are delivered to the customer outside Washington, the sale is exempt from B&O tax and retail sales tax as an interstate and foreign sale.

Parts sold to nonresident corporations

Sales of unattached component parts to nonresident corporations are treated in the same way as sales to qualified nonresident individuals. See above (“Parts sold to nonresidents”) for more information.

If you made sales to nonresident corporations prior to July 1, 2019, you must keep a copy of the corporate nonresident permit provided by your customer for five years.


Use these examples as a general guide for taxability. . In all examples, retailing B&O tax is due from the seller for all sales of watercraft and parts, and all charges for repair parts and labor.

Example 1: Company A sells a vessel to Jane Smith, a Canadian resident. Company A examines Jane Smith's driver's license to verify Jane to be a resident of Canada, and retains the proper exemption certificate at the time of sale. Delivery is made in Washington and Jane removes the vessel from Washington waters within 45 days of delivery. The sale of the vessel is not subject to the sales tax because all requirements were met (RCW 82.08.02665).

Example 2: Mr. Jones, a California resident, contracts with Company B, located in Washington, to manufacture a pleasure yacht. Mr. Jones purchases a boat motor from Company Y, also located in Washington, and pays sales tax at the point of sale. He instructs Company Y to deliver the motor to Company B for installation on the yacht. The yacht is required to be registered with the state of California, which has assumed the registration and numbering function under the Federal Boating Act of 1958. Company B examines Mr. Jones' driver's license to verify Mr. Jones is a nonresident of Washington, and retains the proper exemption certificate at the time of sale. Delivery is made in Washington, and Mr. Jones removes the vessel from Washington waters within 45 days of delivery.

The sale of the yacht by Company B to Mr. Jones is not subject to the sales tax, as the requirements and conditions for exemption have been satisfied. Mr. Jones is not eligible for a refund of the sales tax for the motor he purchased from Company Y, because he is a resident of California, which is not a qualifying state.. Even though the motor was installed in the yacht prior to delivery, the exemption provided by RCW 82.08.0266 does not apply because the seller did not directly purchase the motor.

Example 3: Mr. Smith, a California resident, brings his yacht into Washington for repair. Extensive repairs and testing require the yacht to remain in Washington waters for 90 days. Mr. Smith extends the exemption period by filing a "Nonresident Vessel Repair Affidavit" with the Department of Revenue prior to end of the initial 60-day exemption period. An employee of the repair facility is on board the yacht during all testing, and there is no personal use by Mr. Smith during this time. Upon completion of the repairs and testing, Mr. Smith takes delivery at the repair facility and promptly removes the yacht from Washington waters.

In this case, Mr. Smith does not owe use tax on the yacht. The conditions and requirements exempting the yacht from use tax during the period of repair and testing have been met. However, sales tax is due on all charges for repair parts and labor. The exemption from sales tax for purchases of vessels does not extend to repairs.

Reference: WAC 458-20-238

Example 4: Mrs. Shepard, a resident of Oregon, purchases a new engine for her boat in Washington. She must pay retail sales tax at the point of sale. As a qualified nonresident of Washington, she may apply for a refund of the state portion of the sales tax paid for the purchase of the engine for use outside of this state under RCW 82.08.0273.

Example 5: Mr. Peal, a resident of British Columbia, purchases a rudder from a vender in this state to pick up from the vendor for his transport back to B.C. In this case, Mr. Peal must pay sales tax as the rudder is a vessel part (not a vessel) and residents of British Columbia do not qualify for sales tax exemption under RCW 82.08.0273. See our Sales to Nonresidents page.