Boats and boat motors are subject to one of two Texas sales taxes: the boat and boat motor sales and use tax or the limited sales and use tax.
The retail sale of a boat with a length of 65 feet or less (measured from the tip of the bow in a straight line to the stern) is subject to the 6.25 percent boat and boat motor sales and use tax, unless an exemption applies.
The tax applies to sailboats, inboards, outboards, jet skis and other personal watercraft, and is computed on the sales price less any trade-in allowance.
The tax is also levied on the retail sale of outboard motors (gasoline or diesel), but not the retail sale of electric motors (such as trolling motors), unless attached to a boat subject to boat tax and sold with that boat for a single price.
A Texas resident who buys a boat or boat motor in another state, and then brings it into Texas for use here, owes use tax. The use tax rate is 6.25 percent, the same as the sales tax, with credit given for any sales or use tax legally paid to another state.
A new Texas resident who brings a boat or boat motor into Texas qualifies for a special $15 use tax instead of the 6.25 percent use tax.
The buyer pays the tax to the Texas Parks and Wildlife Department or to the county tax assessor-collector when titling and registering the boat in Texas.
A boat trailer is subject to 6.25 percent motor vehicle sales or use tax, due when the trailer is titled and registered with the county tax assessor-collector.
The sale of boats and boat motors to volunteer fire departments, the federal government, Texas state agencies, Texas cities, Texas counties and other political subdivisions in Texas are exempt.
The limited sales and use tax applies to boats greater than 65 feet in length (measured from the tip of the bow in a straight line to the stern), canoes, kayaks, inflatable boats and rafts, punts and boats designed to be propelled only by a paddle or pole.
The state limited sales and use tax rate is 6.25 percent. Local sales and use tax of up to 2 percent may also be applicable.
Limited sales and use tax also applies to the:
Limited sales and use tax exemptions include:
This publication is intended as a general guide and not as a comprehensive resource on the subjects covered. It is not a substitute for legal advice.
In 2015, the Texas Legislature passed House Bill 855, which requires state agencies to publish a list of the three most commonly used Web browsers on their websites. The Texas Comptroller’s most commonly used Web browsers are Google Chrome, Microsoft Internet Explorer and Apple Safari.