taxes

Boat and Boat Motor Sales and Use Tax

Exemption for Certain Boats and Boat Motors

House Bill 4032
Effective Sept. 1, 2019

House Bill 4032 changes the definition of a boat to include all vessels 115 feet or shorter in length, measured from the tip of the bow in a straight line to the stern. This includes both commercial and noncommercial boats, regardless of who sold the boat.

The bill creates an exemption for boats and motors sold for use in another state if the boat or motor

  • is removed from this state within 10 days of purchase;
  • is placed in a repair facility for repairs or modifications within 10 days of purchase and removed from this state within 20 days of completion of the repairs or modifications; or
  • displays a temporary use permit and is removed from this state within 90 days of purchase.

The bill also provides for the issuance of a temporary use permit allowing exempt use in Texas of a taxable boat or boat motor purchased outside of Texas. The fee for the permit is $150 and is valid for 90 days. An owner can obtain two permits per calendar year. The second permit cannot be issued before the 30th day after the date the first permit expires.

Lastly, the bill limits the amount of boat sales tax on the sale of a taxable boat or motor to $18,750 (300,000 taxable sales price). The bill also changes the due date for boat and boat motor sales and use tax to 45 working days (previously 20) after the taxable boat or motor is delivered to the purchaser or brought into Texas for use.

  • Amends Parks and Wildlife Code Sections 31.003 (Definitions), 31.006 (Appointment of Authorized Agent), 31.037 (Change in Ownership Interest; Notice to Department), 31.041 (Dealer's, Distributor's, and Manufacturer's License), 31.046 (Application for Certificate of Title), and 31.053 (Transfers of Vessels and Outboard Motors)
  • Amends Tax Code Sections 160.001 (Definitions) and 160.041(Collection Procedure)
  • Adds Tax Code Sections 160.0246 (Exemption for Certain Boats and Motors Temporarily Used In This State), 160.0247 (Temporary Use Permit), and 160.026 (Limitation on Amount of Tax)

If you bought a boat in Texas, you'll owe sales tax. If you brought a boat into Texas from outside the state, you'll owe use tax. Details about sales tax and use tax follow.

Who is responsible for boat and boat motor sales tax?

The purchaser of a taxable boat or boat motor in Texas is responsible for paying the boat and boat motor sales tax. If the purchaser pays the tax to a licensed Texas dealer, the tax becomes the responsibility of the dealer.

If the dealer did not collect the tax, or if the boat or boat motor was purchased from someone who is not a dealer, the purchaser must pay the tax directly to the Texas Parks and Wildlife Department or to a county tax assessor-collector within 20 working days from the date the taxable boat or boat motor is delivered to the purchaser. It is paid at the time of boat registration.

Tax Rate

6 1/4 (.0625) percent of sales price minus any trade-in allowance of another taxable boat or boat motor.

Due Date

Boat sales tax is due within 20 working days from delivery.

Who is responsible for boat and boat motor use tax?

Boat and boat motor use tax is due on any taxable boat or boat motor purchased outside Texas and brought into Texas. The user is responsible for paying the tax to Texas Parks and Wildlife Department or to a county tax assessor-collector within 20 working days after the date that the taxable boat or boat motor is brought into Texas.

Tax Rate

6 1/4 (.0625) percent use tax less credit for taxes paid to another state, unless the $15 new resident tax applies.

Due Date

Boat use tax is due within 20 working days from the date the boat or motor is brought into the state.

Penalties and Interest

Penalties
  • If tax is paid 1-30 days after the due date, a 5 percent penalty is assessed.
  • If tax is paid over 30 days after the due date, a 10 percent penalty is assessed.
Interest
  • Past due taxes are charged interest beginning 61 days after the due date.
  • To calculate interest on past due taxes, visit Interest Owed and Earned.

Reporting and Payment Requirements

Select the amount of taxes you paid in the preceding state fiscal year (Sept. 1 – Aug. 31) to find the reporting and payment methods to use.

Less than $500,000

A paper report is the only available reporting method.

Select one of these payment methods:

  • Web Electronic Funds Transfer (EFT) or credit card via Webfile (American Express, Discover, Mastercard® and Visa)
  • TEXNET
  • Check
$500,000 or more

A paper report is the only available reporting method.

TEXNET is the only acceptable payment method.

Additional Resources

Refunds

Use the boat sales tax manual computation worksheet to calculate your boat and boat motor sales and use tax.

For boat and boat motor title and registration information, visit the Texas Parks and Wildlife Department website.