Tax Type
Watercraft Sales and Use Tax
Description
Boats sold without engines
Topic
Basis of Tax
Date Issued
09-18-1986
September 18, 1986
Re: Request for Ruling/Watercraft Sales and Use Tax
Dear ***********************
This will reply to your recent letter in which you request a ruling as to the applicability of the watercraft sales and use tax to certain vessels.
Your request deals with a dealer who sells a boat that is over twenty feet in length, but which is not powered by an engine. Rather than purchase an engine from the dealer, the purchaser advises the dealer that he will install his own engine on the new boat prior to titling the boat with the Department of Game and Inland Fisheries.
In such instances, the purchaser need only remit the two percent watercraft sales and use tax on the new vessel, provided that an engine of over 25 horsepower is installed on the boat prior to its titling with the Department of Game and Inland Fisheries. However, in the event that no engine is installed or an engine is installed that is of 25 horsepower or less, the purchaser will be required- to remit the four percent retail sales and use tax. The dealer will be relieved of his duty to-collect the retail sales and use tax if he takes from the purchaser a written statement that an engine in excess of 25 horsepower will be installed upon the boat prior to its titling.
If any further questions or concerns relative to the watercraft sales and use tax arise, please do not hesitate to contact the department.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner