How Is Fuel Taxed for Motorboats?

The motor vehicle fuel (excise) tax and sales and use tax on fuel used for operating motorboats in Wisconsin is dependent on the type of motorboat and the type of fuel.

Recreational Motorboat

Recreational motorboat means a motorboat used predominantly for the entertainment, amusement or recreation of the owner of the motorboat, whether or not it is used in a trade or business.

Fuel TypeMotor Vehicle Fuel Tax?Sales and Use Tax?
GasolineSubject to TaxNot Subject to Tax
Undyed Diesel FuelSubject to TaxNot Subject to Tax
Dyed Diesel FuelCannot used in recreational motorboatsCannot used in recreational motorboats

Commercial Motorboat

A commercial motorboat is a motorboat predominantly used for business and otherwise not considered recrea-tional (e.g., a charter fishing motorboat).

Fuel TypeMotor Vehicle Fuel Tax?Sales and Use Tax?
GasolineNot Subject to Tax1Subject to Tax2
Undyed Diesel FuelNot Subject to Tax1Subject to Tax2
Dyed Diesel FuelNot Subject to TaxSubject to Tax2

1 If fuel purchases for a commercial motorboat include the motor vehicle fuel tax (e.g., gasoline or undyed diesel), the owner of the motorboat can apply for a refund of the motor vehicle fuel tax. To claim a refund, the taxpayer must file Form MF-001, Fuel Tax Refund Claim.


2 Exception The following motorboats are exempt from sales and use tax on fuel purchases:

  • Commercial vessels and barges of 50-ton burden or over, primarily engaged in interstate or foreign commerce or commercial fishing.

  • Motorboats that have an owner and/or operator(s) holding a sport trolling license and are regularly employed in carrying persons for hire for sport fishing in and upon Lake Superior, Lake Michigan, Green Bay, Sturgeon Bay, Sawyer's Harbor and the Fox River from its mouth up to the dam at De Pere, any river or stream tributary of Lake Michigan or Green Bay from its mouth upstream to the first dam or lake, or any other river or stream tributary of Lake Michigan or Green Bay that is designated by the department.


Note:

  • Marinas in Wisconsin that sell motor fuel to boaters cannot offer for sale to owners of recreational motorboats fuel that does not include motor vehicle fuel tax (untaxed diesel fuel (dyed diesel) or untaxed gasoline). Dyed diesel fuel can be sold to owners of commercial motorboats.

  • Federal law exempts from the motor vehicle fuel tax the use of diesel fuel in both recreational and commercial motorboats. Therefore, for federal purposes, both recreational and commercial motorboats may apply for a refund of motor vehicle fuel tax paid when undyed diesel is purchased.

For additional information see Publication 307, Motor Vehicle Fuel Tax Information.