Wisconsin sales and rentals of watercraft, such as boats and jet skis, are subject to Wisconsin state sales taxes.* When a watercraft is stored or docked in Wisconsin, use tax is due on the purchase price of the watercraft. This applies to both new and used watercraft.

*For county and stadium tax purposes on the sale or multiple-payment lease of a watercraft, the tax is based on where the watercraft is customarily kept by the purchaser/lessee. For a one-payment rental or lease of a watercraft, the county and stadium taxes are based on where the purchaser receives possession of the watercraft.

Sales of Watercraft by Dealers and Other Retailers

A Wisconsin retailer is required to collect sales or use tax on its sale of a watercraft when the purchaser takes possession of the watercraft in Wisconsin (for example, the purchaser picks up the watercraft at the dealer's Wisconsin business location or the seller delivers the watercraft to the Wisconsin location designated by the purchaser). Wisconsin tax is due, even if the purchaser takes the watercraft to a location outside Wisconsin.

If the retailer does not collect the tax (for example, an out-of-state retailer ships the watercraft to a purchaser in Wisconsin), the purchaser will pay the tax at the time the watercraft is registered in Wisconsin. If no registration is required for the watercraft, use tax is due. Use tax can be paid on an individual's Wisconsin income tax return.

Sales of Watercraft by a Private Party

An individual is not required to collect sales or use taxes when selling his or her personal watercraft. Sales or use taxes are paid at the time the watercraft is registered in Wisconsin. If no registration is required for the watercraft, the purchaser owes use tax.

The rental of a watercraft is also taxable, including mandatory charges for fuel.

Note: Separate and optional charges for fuel by a watercraft rental company to a person who rents a watercraft are not subject to Wisconsin sales and use tax if the excise taxes were paid by the watercraft rental company to the fuel supplier. However, if no excise taxes were paid on the fuel (that is, the fuel was purchased for off-road use without paying the excise taxes), the watercraft rental company may purchase the fuel without tax, for resale, but its separate and optional charge for the fuel to the renter of the watercraft is taxable. See Publication 222, Motor Vehicle Fuel Users: Do you Owe Use Tax?, for additional information.

Charges for storage and boat docking in Wisconsin are subject to tax. The repair or other maintenance to a watercraft is also a taxable service.

 

March 3, 2016