Nonresident Exemption for 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.

Facts and Question 1: An individual, domiciled in Minnesota, purchases a boat in Minnesota. The individual berths the boat at a marina on the shores of the Mississippi River in Wisconsin. The sale of the boat was exempt from Minnesota sales or use tax as an occasional sale. Is the boat subject to Wisconsin use tax because it is stored, used, or otherwise consumed in Wisconsin?

Answer 1: No. Since all of the following apply, the boat is exempt from Wisconsin use tax under sec. 77.53(17m), Wis. Stats.:

  • The boat was purchased in a state contiguous with Wisconsin (i.e., Minnesota) by a person who was dom-iciled in Minnesota.
  • The boat is berthed in Wisconsin boundary waters adjacent to that state (i.e., Mississippi River).
  • The sale of the boat was exempt from Minnesota sales and use tax as an occasional sale.

Facts and Question 2: Assume the same facts as in Facts and Question 1, except that the boat was purchased in Illinois. Is the boat subject to Wisconsin use tax?

Answer 2: Yes. The exemption from use tax in sec. 77.53(17m), Wis. Stats., does not apply, because the pur-chaser of the boat is not domiciled in Illinois, the state contiguous to Wisconsin where the boat was purchased.

Facts and Question 3: Assume the same facts as in Facts and Question 1, except that the boat was purchased in Minnesota by a resident of New York. Is the boat subject to Wisconsin use tax?

Answer 3: Yes. The exemption from use tax in sec. 77.53(17m), Wis. Stats., does not apply, because the pur-chaser of the boat is not domiciled in a state contiguous to Wisconsin.

Facts and Question 4: Assume the same facts as in Facts and Question 1, except that the boat is berthed at a marina on the shores of Lake Michigan in Wisconsin. Is the boat subject to Wisconsin use tax?

Answer 4: Yes. The exemption from use tax in sec. 77.53(17m), Wis. Stats., does not apply, because the boat is not berthed in Wisconsin boundary waters adjacent to the state of domicile (i.e., Lake Michigan is not adjacent to Minnesota).