Vehicle Taxability - Watercraft

Watercraft and Outboard Motors

Watercraft and outboard motor sales are generally treated the same as motor vehicles.

  • Leases (PDF) —  This memo explains how to apply sales and use tax to a lease.
  • Motor vehicle sales to nonresidents (PDF) — Tax is due on motor vehicle sales to residents of other states if the other state charges sales tax to Ohio residents. Learn more here.

 

Frequently Asked Questions Tool

The Ohio Department of Taxation has compiled a list of frequently asked questions covering many different categories.

To view the questions, click on the "Select Category" bar and then click on  the category you are interested in.  A list of questions will appear pertaining to that category. Then click on the question you are inquiring about and the answer will appear.

How are taxes calculated on a brokered watercraft sale?

The sale of watercraft, outboard motors and parts thereof by boat dealers and/or brokers is a retail sale subject to the sales or use tax regardless of who holds title to such watercraft, outboard motors or parts prior to the sale.

Ohio Admin. Code 5703-9-40 states:

Persons engaged in the business of selling tangible personal property, who are authorized, engaged or employed to sell tangible personal property belonging to another are the vendors of such tangible personal property and shall be responsible for the proper collection and remittance of the sales tax with respect to such sales.

Persons engaged in the business of selling tangible personal property shall include persons who hold themselves out to the public as conducting a business regardless of whether the merchandise sold is owned by them or by other persons who have authorized, engaged or employed them to sell tangible personal property.

Therefore, persons who make sales of tangible personal property on their own behalf or on behalf of others must collect the tax on all such sales unless the sale is exempt. Such dealers and/or brokers must have a vendor's license or out-of-state seller’s use tax registration with Ohio for the collection and remittance of tax.  Tax must be paid by the dealer/broker as follows:

(a) On titled watercraft and/or outboard motors, the dealer/broker must remit the tax [net of discount if the dealer/broker has a vendor’s license or an out-of-state seller’s registration (99-XXXXXX)] to the clerk of courts at the rate in effect in the purchaser’s county of residence.

(b) On watercraft not required to be titled, documented watercraft or accessories and parts, the dealer/broker must remit the tax to the Department of Taxation on the dealer/broker’s tax return. The remittance is net of discount if the return is timely filed and the tax due is paid in full. The tax rate to collect is the rate in the county where the customer takes possession of the watercraft or accessories.

**** Special Note ****

If the dealer/broker is licensed with the Ohio Department of Natural Resources as a watercraft dealer, the “price” for calculating sales tax may be reduced by any watercraft or outboard motor taken in trade by the dealer/broker.