Nonresident Boats Registered with the U.S. Coast Guard May Be Subject to Tax

Nonresidents of Wisconsin who own a documented vessel that is used, stored or in other ways consumed in Wisconsin waters may owe use tax on the vessel. Documented vessels are large recreational watercrafts owned by U.S. citizens that are registered with the U.S. Coast Guard. Documented vessels must be registered in Wisconsin with the Department of Natural Resources (DNR), unless the vessel is registered in another state and is used on Wisconsin waters for less than 60 consecutive days. See the DNR Handbook of Wisconsin Boating Laws and Responsibilities.

If the documented vessel is required to be registered with the Wisconsin DNR, Wisconsin sales or use tax must be paid. When registering the vessel in Wisconsin, the registrant should bring a copy of the receipt showing any tax that was paid to the seller, as well as proof of payment. Sales tax paid to another state on the vessel may be claimed as a credit to reduce the tax payable if the tax was first due and paid to the other state. A county tax or similar tax paid in the other state may also be claimed as a credit. Credit for the taxes paid to another state will only be allowed at registration if the registrant provides proof of sales or use tax paid to the other state.

An exemption exists for nonresidents with vessels (boats) berthed in Wisconsin boundary waters. Wisconsin use tax is not imposed on the storage, use, or other consumption of a boat in Wisconsin that is owned by a nonresident if all of the following conditions are met:

  • The boat is purchased in a state contiguous with Wisconsin (i.e., Illinois, Iowa, Michigan, or Minnesota)
  • The boat is purchased by a person domiciled in that contiguous state in which the purchase occurred
  • The boat is berthed in Wisconsin boundary waters adjacent to the state of domicile of the purchaser
  • The boat is purchased in a transaction that is an exempt occasional sale under the laws of the state in which the purchase is made

This exemption is provided in sec. 77.53(17m), Wis. Stats. For a list of questions and answers regarding the sales tax exemption see the article titled "Nonresident Exemption for Boats Berthed in Wisconsin Boundary Waters," on page 9 of Wisconsin Tax Bulletin 197 (April 2017).

July 30, 2018