Boat Launch Sales Tax: What New Yorkers Need Know

If you're a boat owner in New York, you may be wondering if you need to pay sales tax when launching your vessel. The answer is yes, as New York state imposes sales tax on the first $230,000 of the boat's purchase price. This tax is based on the tax rate in effect where the purchaser resides, and it's important to note that this applies even if you bought your boat in another state and are now bringing it into New York. While there are a few states in the US that don't require sales tax on boats, New York is not one of them, so it's crucial to factor this cost into your boating plans.

Sales tax is based on the rate where the purchaser resides

Sales tax on boats in New York is based on the rate in effect where the purchaser resides. This is a special rule that applies to sales (including leases) of motor vehicles, vessels, and trailers.

The term vessel refers to any type of watercraft (excluding seaplanes) and includes any inboard or outboard motor and any trailer sold with the vessel for use with the vessel.

The sales tax rate for boats in New York is based on the combined state and local rate in effect in the taxing jurisdiction where the purchaser resides. For example, if a purchaser lives in a taxing jurisdiction in New York State with a sales tax rate of 8.875%, they would pay sales tax on their boat at this rate.

It is important to note that the sales tax is due when the boat is registered, and there are specific requirements for registration in New York. Additionally, there may be credits or exemptions available, such as for non-resident purchasers or for sales tax paid in another state.

In summary, the sales tax on boats in New York is based on the rate where the purchaser resides, and there are specific rules and requirements regarding registration, exemptions, and credits that should be considered when determining the final sales tax amount.

A vessel is any type of watercraft (excluding a seaplane) with an inboard or outboard motor

In the state of New York, a vessel is defined as any type of watercraft (excluding a seaplane) with an inboard or outboard motor. This includes motorized boats, sailboats, kayaks, canoes, and rowboats. Vessels that are exempt from this definition include vessels that weigh 200 pounds or less, are not equipped with a motor, and are exempt from registration under the Vehicle and Traffic Law.

In New York, all vessels propelled by machinery, including gasoline, diesel, and electric motors, and principally operated in New York waters, must be registered and issued a New York Certificate of Registration by the New York State Department of Motor Vehicles. This means that if you are using a motorized vessel in New York, you will need to pay sales tax on the vessel. The sales tax rate will be based on the tax rate in effect where the purchaser resides. If you are a non-resident of New York State, you will be exempt from paying sales tax on the vessel.

It is important to note that there are age and operator restrictions for boating in New York. All boaters born on or after May 1, 1996, are required to successfully complete an approved boater education course to operate a motorboat. Additionally, all persons operating a motorized vessel must have a Boating Safety Certificate by January 1, 2025. These requirements help ensure safe boating practices and compliance with New York's boating laws and regulations.

New York's sales tax is imposed on the first $230,000 of the boat's purchase price

In the state of New York, sales tax is imposed on the first $230,000 of a boat's purchase price. This rule applies to both residents and non-residents of New York State.

The state of New York defines residency for use tax purposes as simply maintaining an abode in New York. This is different from income tax residency, which requires that the abode be maintained for most of the year or that the taxpayer spends more than 183 days in New York.

The sales tax rate is determined by the county and by the state. In some counties, the total sales tax is 8.625%.

In New York, a vessel is defined as any type of watercraft (other than a seaplane) including any inboard or outboard motor and any trailer sold with the vessel for use with the vessel. Vessels that weigh 200 pounds or less, are not equipped with a motor, and are exempt from the requirement to be registered under the Vehicle and Traffic Law are not considered vessels.

New York's new rules define taxable "use" much more generously. Under the old rules, a taxable use occurred as soon as the boat entered New York. Under the new rules, a taxable use doesn't occur until the first of the following events:

• The use of the boat in New York for a period of 90 consecutive days.
• The date upon which the boat is required to be registered under the Vehicle & Traffic Law (boats registered in another state are not required to be registered in New York unless kept there for 90 consecutive days).
• Actual registration.

A purchaser must submit a Form DTF-820 to establish that the special rule applies

A purchaser must submit a Form DTF-820, Certificate of Nonresidency of New York State and/or Local Taxing Jurisdiction, to the seller at the time of sale. This is to establish that the special rule applies, which states that the sales tax is imposed based on the tax rate in effect where the purchaser resides.

The special rule for sales of motor vehicles, vessels, and trailers applies if the purchaser is:

• A nonresident of New York State
• A resident of a taxing jurisdiction in New York State other than the jurisdiction where the motor vehicle, vessel, or trailer is delivered

A nonresident purchaser is a purchaser that:

• Does not have a permanent place of abode in New York State
• Is not carrying on any employment, trade, business, or profession in New York State in which the motor vehicle, vessel, or trailer will be used
• Will not register the motor vehicle, vessel, or trailer in New York State (including any temporary registration)

If a purchaser does not submit Form DTF-820, the seller must collect the sales tax at the rate in effect where the motor vehicle, vessel, or trailer is delivered to the purchaser (usually the rate in effect where the dealer’s premises are located).

Form DTF-820 is not the only form that needs to be filled out when purchasing a boat. Form DTF-802, Statement of Transaction, is also required. This form is used to certify the sale price for sales tax calculation when the vessel is transferred in a casual sale or as a gift. This form should be submitted as soon as possible, without exceeding the two-week term from the date of the vessel's purchase.

If a purchaser does not submit Form DTF-820, the seller must collect the sales tax at the rate in effect where the vessel is delivered

If a purchaser does not submit Form DTF-820, the seller must collect sales tax at the rate in effect where the vessel is delivered to the purchaser. This is usually the rate in effect where the dealer's premises are located.

Form DTF-820, or the Certificate of Nonresidency of New York State and/or Local Taxing Jurisdiction, is used to establish that a special rule applies to sales tax. This rule states that sales tax is imposed based on the tax rate in effect where the purchaser resides. This form must be submitted to the seller at the time of sale.

If the purchaser is a nonresident of New York State, they are not required to pay state or local sales tax. A nonresident purchaser is someone who does not have a permanent place of abode in the state, is not carrying out any employment, trade, business, or profession in the state in which the vessel will be used, and will not register the vessel in New York State.

If the purchaser is a resident of another taxing jurisdiction in New York State, they are subject to sales tax at the rate in effect for the New York jurisdiction where they reside. For individuals, the applicable rate is the combined state and local rate in effect in the taxing jurisdiction where the purchaser has a permanent place of abode. For businesses, the applicable rate is the combined state and local rate in effect in the taxing jurisdiction where the vessel will be principally moored.

It is important to note that the use of postal ZIP codes for tax collection purposes can result in inaccurate tax reporting. To determine the correct rate of sales tax to charge, sellers should use the Jurisdiction/Rate Lookup by Address.

Frequently asked questions