TPS-TIE

Commercial vessel tax is a personal property tax. Generally, boats exempt from the watercraft excise tax are subject to the personal property tax. 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.

Beginning with Annual 2014 tax assessments, the DOR will include the commercial vessel derelict vessel removal fee of $1 per foot of vessel length when the commercial vessel tax is assessed.

The state of Washington encourages nonresidents to visit Washington aboard their vessels in order to explore our unique waterways, scenic vistas and wonderful hospitality.

This publication contains useful information outlining registration and tax requirements for non-business use of vessels in this state by nonresidents so that they can plan their visits accordingly.

Bare boat charter

A bare boat charter is renting or leasing a vessel to a customer, who then has total control of the vessel. The boat owner or the charter business cannot provide a captain or crew or be present on the vessel during the charter.

Taxability of purchasing a charter boat

A bareboat charter is one where a captain or crew is not provided and the owner relinquishes dominion and control of the boat to the customer. You may purchase a boat intended exclusively for bareboat charter without paying sales tax. This resale exemption also extends to purchases of equipment and repairs for the boat.

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.

This information was created to assist veterinarians to better understand the Washington State taxes that apply to them.

For additional information or answers to any questions about Washington excise taxes, please contact us.

Updated April 2020

Contents

Veterinary services" defined for tax purposes

Veterinary services" include the diagnosis, cure, mitigation, treatment, or prevention of disease, deformity, defect, wounds, or injuries of animals. It also includes the administration of any drug, medicine, dietary preparations, method or practice, or performance of any operation, or manipulation, or application of any apparatus or appliance for the diagnosis, cure, mitigation, treatment, or prevention of any animal disease, deformity, defect, wound, or injury.

Veterinarians must collect retail sales tax on certain sales of tangible personal property and remit the tax to the state along with their B&O taxes. The retail sales tax is a tax on the consumer or user of tangible personal property and retail services in Washington.

Amounts derived from veterinary services performed outside Washington subject to the Service and Other Activities classification may be apportioned to other states if the business meets certain criteria. For more information, see our Apportionment guide.

In addition to understanding when to collect Washington's retail sales tax, veterinarians must also understand when they must pay retail sales tax, use tax, or deferred sales tax. The terms "sales tax," "use tax," and "deferred sales tax" are frequently used interchangeably. Although the rates are the same, the application of each tax differs according to the circumstances of sale. Veterinarians making purchases for use as a consumer without payment of Washington's retail sales tax must know when to report and pay use tax or deferred sales tax.