34 Tex. Admin. Code § 3.741 - Imposition and Collection of Tax
(a)
Definitions. The following words and terms, when used in this section, shall
have the following meanings, unless the context clearly indicates otherwise.
(1) Accessories--Nonessential tangible
personal property attached to or sold with a vessel for the convenience or
comfort of the operator or passengers. The term "accessories" includes, but is
not limited to, radios, mirrors, transom-mounted ladders, electric trolling
motors, water skis, tow ropes, and depth finders. The term does not include a
boat trailer.
(2) Agent of the
Department--A dealer who is authorized by the Department under Parks and
Wildlife Code, §
31.006
(Appointment of Authorized Agent), to collect taxes and fees and issue
certificates of number for taxable boats and outboard motors sold by that
dealer in Texas.
(3) Application
for Certificate of Title and/or Registration--Form PWD 143 (boats) or PWD 144
(outboard motors), an electronic equivalent, or a successor form used to apply
for a certificate of title and/or registration for a taxable boat or outboard
motor and/or to pay any sales or use tax due on the sale or use of a taxable
boat or outboard motor in Texas. The Applications for Certificate of Title
and/or Registration are available at
https://tpwd.texas.gov/fishboat/boat/forms/.
(4) Dealer--A person who holds a license
issued by the Department to engage in the business of buying, selling, selling
on consignment, displaying for sale, or exchanging at least five taxable boats
or outboard motors in Texas during a calendar year at an established or
permanent place of business in Texas.
(5) Department--The Texas Parks and Wildlife
Department.
(6) Distributor--A
person who holds a license issued by the Department to engage in the business
of selling, offering for sale, or processing for distribution new taxable boats
or outboard motors to dealers in Texas.
(7) Federally documented vessel--A vessel of
five net tons or more, operated on United States navigable waters that has been
issued a valid marine certificate of documentation on file with the United
States Coast Guard National Vessel Documentation Center.
(8) Manufacturer--A person who holds a
license issued by the Department to engage in the business of manufacturing new
and unused taxable boats and outboard motors for the purpose of sale or
trade.
(9) Participating county tax
assessor-collector--A county tax assessor-collector in Texas that has an
agreement with the Department to title and/or register taxable boats or
outboard motors in Texas.
(10)
Registered repair facility--A person engaged in the business of repairing,
remodeling, maintaining, or restoring taxable boats or outboard motors that
holds a current Texas sales and use tax permit issued under Tax Code, Chapter
151 (Limited Sales, Excise, and Use Tax).
(11) Retail sale--An installment or credit
sale of a taxable boat or outboard motor, an exchange of a taxable boat or
outboard motor for property or money, or an exchange in which a taxable boat or
outboard motor is transferred but the seller retains title as security for
payment of the purchase price. The term does not include a sale in which the
dealer, distributor, or manufacturer acquires the taxable boat or outboard
motor for the exclusive purpose of resale. Dealers, distributors, and
manufacturers are the only persons who may acquire a taxable boat or outboard
motor for resale.
(12) Taxable
boat--A vessel not more than 115 feet in length, measured from the tip of the
bow in a straight line to the stern, other than a canoe, kayak, rowboat, raft,
punt, or other watercraft designed to be propelled only by paddle, oar, or
pole. The term includes federally documented vessels, sailboats, personal
watercraft, and boats designed to accommodate an outboard motor. The term does
not include seaplanes. Seaplanes, and canoes, kayaks, rowboats, rafts, punts,
or other watercraft designed to be propelled only by paddle, oar, or pole, are
not "taxable boats" under Tax Code, Chapter 160 (Taxes On Sales And Use Of
Boats And Boat Motors), but are subject to tax under Tax Code, Chapter 151.
(Limited Sales, Excise and Use Tax).
(13) Outboard motor--Any self-contained
internal combustion propulsion system of any horsepower, excluding fuel supply,
used to propel a vessel that is detachable as a unit from the vessel. The term
does not include electric boat motors.
(14) Temporary use permit--A non-renewable,
non-transferable permit issued by the Department, an agent of the Department,
or a participating county tax assessor-collector authorizing the temporary
tax-free use of a taxable boat or outboard motor within the territorial
boundaries of Texas for not more than 90 consecutive days from the date of
issue. Only two temporary use permits may be issued for the same taxable boat
or outboard motor within a calendar year. The second temporary use permit
cannot be issued until 30 days after the date the first permit expires. The
nonrefundable fee for the permit is $150 per taxable boat or outboard
motor.
(15) Territorial boundaries
of Texas--All territory within the exterior borders of Texas. The offshore
border of Texas extends nine nautical miles from the coastline of
Texas.
(16) Total
consideration--The amount paid or to be paid for a taxable boat or outboard
motor, including all accessories attached thereto at the time of the sale. The
amount includes payments by the purchaser for the costs of material, labor or
service, interest paid, loss, or any other expense, transportation before the
sale, any manufacturer's or importer's excise tax imposed by the United States
government, and any dealer's vessel and outboard motor inventory property tax
imposed on the dealer and passed through to the purchaser. The amount also
includes anything of monetary value received by the seller, such as cash or the
equivalent; a book entry reflecting cash received or paid; the forgiveness or
assumption of debt; book entries reflecting accounts receivable or accounts
payable for an item; the performance of a service; or real or tangible personal
property. The amount does not include any separately stated discount, finance
or interest charges, documentary charges, transportation charges after the
sale, or the value of another taxable boat or outboard motor taken by the
seller as all or part of the consideration for the sale of the taxable boat or
outboard motor.
(17) Use--Any
storage or other exercise of rights of ownership in Texas by any person
excluding:
(A) the storage, display, or
holding of a taxable boat or outboard motor exclusively for sale by a dealer,
distributor, or manufacturer; or
(B) troubleshooting or testing of a taxable
boat or outboard motor being repaired, remodeled, maintained, or restored by a
registered repair facility under subsection (g)(1) of this section.
(18) Vessel--Any watercraft, other
than a seaplane on water, used or capable of being used for transportation on
water. The definition includes a ship, barge, taxable boat, yacht, or any
watercraft designed to be propelled by paddle, oar or pole.
(b) General principles of
taxation.
(1) The purchase of a taxable boat
or outboard motor and all accessories attached thereto at the time of sale in
Texas is subject to Tax Code, Chapter 160, including the purchase of a taxable
boat or outboard motor for purposes of lease or rental.
(2) The lease or rental of a taxable boat or
outboard motor in Texas is subject to Tax Code, Chapter 151, and cannot be
purchased tax-free for resale.
(3)
The purchase of accessories for a taxable boat or outboard motor attached after
the time of sale of the taxable boat or outboard motor is subject to Tax Code,
Chapter 151.
(4) The purchase of
tangible personal property that cannot be identified as a taxable boat or
outboard motor at the time of sale is subject to Tax Code, Chapter 151, even if
the combination of items of tangible personal property later becomes a taxable
boat or outboard motor. If items of tangible personal property are combined to
create a taxable boat or outboard motor, the initial titling or registration of
the taxable boat or outboard motor in the name of the person who created the
taxable boat or outboard motor is not subject to Tax Code, Chapter 160. If the
taxable boat or outboard motor is titled or registered in any other person's
name, the taxable boat or outboard motor is considered transferred to that
person and is subject to Tax Code, Chapter 160.
(5) The purchase of safety equipment required
by Parks and Wildlife Code, §§
31.064 -
31.071,
including life preservers and fire extinguishers, purchased with a taxable boat
or outboard motor are considered to be attached to the taxable boat or outboard
motor at the time of sale and subject to Tax Code, Chapter 160.
(6) A taxable boat or outboard motor and all
accessories attached thereto purchased outside of Texas and brought into Texas
for use in Texas is subject to use tax under Tax Code, §
160.022 (Use Tax), or in
lieu of the use tax, a new resident use tax is due under Tax Code, §
160.023 (New Resident), if
the taxable boat or outboard motor and all accessories attached thereto are
brought into Texas by a new resident of Texas.
(7) The purchase of a boat trailer is subject
to motor vehicle sales and use tax under Tax Code, Chapter 152 (Taxes on Sale,
Rental, and Use of Motor Vehicles). The total consideration paid or to be paid
for a boat trailer must be separately stated from the total consideration paid
or to be paid for a taxable boat and/or outboard motor at the time the boat
trailer is registered in Texas. For more information on the taxation of boat
trailers, see §
3.74 of this title (relating to
Seller Responsibility) and §
3.72 of this title (relating to
Trailers, Farm Machines, and Timber Machines).
(c) Imposition of the tax.
(1) A sales tax is imposed on each retail
sale of a taxable boat or outboard motor transferred for consideration within
the territorial boundaries of Texas.
(A) The
sales tax rate is 6.25% of the total consideration paid or to be paid for each
taxable boat or outboard motor sold. The total consideration paid or to be paid
for a taxable boat must be separately stated from the total consideration paid
or to be paid for an outboard motor. The total amount of sales tax due may not
exceed $18,750 for each taxable boat or outboard motor sold in Texas. The total
amount of sales tax allowed applies separately to the taxable boat and outboard
motor.
(B) The sales tax is the
obligation of and shall be paid by the purchaser of the taxable boat or
outboard motor. A dealer who collects sales tax from the purchaser of a taxable
boat or outboard motor and does not remit the sales tax collected to either the
Department an agent of the Department, or a participating county tax
assessor-collector is liable for the sales tax collected and any penalties that
may apply.
(2) Use tax
is imposed on the use in Texas of each taxable boat or outboard motor purchased
outside of Texas and brought into Texas for use in Texas.
(A) The use tax rate is 6.25% of the total
consideration paid or to be paid for the taxable boat or outboard motor,
regardless of any use or depreciation of the taxable boat or outboard motor
before the entry of the taxable boat or outboard motor into Texas. The total
consideration paid or to be paid for a taxable boat must be separately stated
from the total consideration paid or to be paid for each outboard
motor.
(B) The use tax is an
obligation of, and shall be paid by, the person who brings the taxable boat or
outboard motor into Texas. The person obligated to pay Texas use tax may claim
a credit against the use tax due at the time the taxable boat or outboard motor
is titled and/or registered in Texas only for legally imposed state and local
sales or use tax paid on the purchase of the taxable boat or outboard motor to
another state, Puerto Rico, or a possession or territory of the United States
by the purchaser of the taxable boat or outboard motor before entry into Texas.
Acceptable proof of tax paid includes an out-of-state tax receipt, a seller's
bill of sale, sales invoice, or sales contract identifying the amount of sales
or use tax paid to another state on the sale of the taxable boat or outboard
motor.
(C) A new resident use tax
of $15 is due in lieu of the use tax for each taxable boat or outboard motor
owned by a new resident in any other state or foreign country and brought into
Texas by the new resident if the taxable boat or outboard motor is brought into
Texas by the new resident within 45 working days after becoming a new resident.
The tax is an obligation of, and shall be paid by, the new resident who brings
the taxable boat or outboard motor into Texas. A new resident cannot claim a
credit against the new resident use tax due at the time the taxable boat or
outboard motor is titled and/or registered in Texas for any legally imposed
state and local sales or use tax due and paid to another state on the purchase
of the taxable boat or outboard motor.
(D) The use tax is not due on the use of a
taxable boat or outboard motor brought into Texas for use in Texas if the
taxable boat or outboard motor:
(i) is a
federally documented vessel or has a current certificate of number or
registration issued by a United States Coast Guard approved numbering system of
another state;
(ii) is issued a
temporary use permit that must be present on board the boat at all times while
the taxable boat or outboard motor is located within the territorial boundaries
of Texas; and
(iii) the boat or
outboard motor is removed from the territorial boundaries of Texas on or before
the expiration date of the temporary use permit.
(E) Subparagraphs (A) and (B) of this
paragraph apply to the use of a taxable boat or outboard motor brought into
Texas that remains within the territorial boundaries of Texas after the
expiration date of the temporary use permit. Credit is not allowed for the $150
temporary use permit fee against any Texas use tax that may be due.
(d) Payment of the tax.
(1) The seller and purchaser must complete an
Application for Certificate of Title and/or Registration for each sale of a
taxable boat or outboard motor in Texas, and:
(A) if the seller collects the sales tax from
the purchaser, the seller must remit the tax and the Application for
Certificate of Title and/or Registration to either the Department, an agent of
the Department, or a participating county tax assessor-collector within 45
working days from the date the taxable boat or outboard motor is delivered to
the purchaser in Texas; or
(B) if
the seller gives the Application for Certificate of Title and/or Registration
to the purchaser, the purchaser is then required to remit the sales tax and the
Application for Certificate of Title and/or Registration to either the
Department, an agent of the Department, or a participating county tax
assessor-collector within 45 working days from the date the taxable boat or
outboard motor is delivered to the purchaser in Texas.
(2) Persons who owe use tax must complete an
Application for Certificate of Title and/or Registration and remit the use tax
and the Application for Certificate of Title and/or Registration to either the
Department, an agent of the Department, or a participating county tax
assessor-collector within 45 working days after the date motor is brought into
Texas.
(3) Persons transferring
ownership of a taxable boat or outboard motor in Texas when no sales or use tax
is due as a result of a tax exemption, even exchange, or gift of a taxable boat
or outboard motor, must complete an Application for Certificate of Title and/or
Registration indicating why no sales or use tax is due and file the Application
for Certificate of Title and/or Registration with either the Department, an
agent of the Department, or a participating county tax assessor-collector
within 45 working days after the date the taxable boat or outboard motor is
transferred in Texas.
(e) Failure of tax remittance by the selling
dealer.
(1) If a purchaser paid sales tax
imposed by Tax Code, §
160.021 (Retail Sales Tax),
to a selling dealer, and the dealer failed to remit the sales tax within 45
working days from the date of sale, the Department, agent of the Department, or
participating county tax assessor-collector shall accept an application for
Certificate of Title and/or Registration for a taxable boat or outboard motor
from the purchaser without payment of additional sales tax by the purchaser.
The purchaser must provide proof that the sales tax was paid to the dealer.
Acceptable proof includes an invoice, bill of sale, or a receipt signed by the
dealer or its representative showing that the sales tax was paid to the
dealer.
(2) The Department, agent
of the Department, or participating county tax assessor-collector shall notify
the comptroller in writing of the dealer's failure to remit the tax. The notice
must:
(A) be made before the 31st day after
the date the application for Certificate of Title and/or Registration is
accepted;
(B) contain the name and
address of the dealer; and
(C)
include copies of documentation provided by the purchaser showing sales tax was
paid to the dealer.
(f) Purchase of tangible personal property or
accessories for resale.
(1) A properly
completed resale certificate as provided under Tax Code, Chapter 151, may be
used to purchase tangible personal property tax-free to be combined into a
taxable boat or outboard motor held for sale in the purchaser's regular course
of business.
(2) A properly
completed resale certificate as provided under Tax Code, Chapter 151, may be
used to purchase accessories tax-free that are included in a lump-sum price for
the accessory and taxable boat or outboard motor. The lump-sum sales price is
subject to the boat and boat motor sales and use tax.
(3) Accessories purchased to be attached to a
vessel not subject to Tax Code, Chapter 160 (vessels over 115 feet in length),
are subject to Tax Code, Chapter 151. See also §
3.285 of this title (relating to
Resale Certificate; Sales for Resale), §
3.294 of this title (relating to
Rental and Lease of Tangible Personal Property), and §
3.297 of this title (relating to
Carriers, Commercial Vessels, Locomotives and Rolling Stock, and Motor
Vehicles).
(g)
Exemptions and non-taxable transactions.
(1)
Sales tax is not due on the sale of a taxable boat or outboard motor to a
purchaser in Texas for use in another state or nation before any use in Texas,
if:
(A) the purchaser gives the seller a
written statement signed by the purchaser stating that the purchaser intends to
remove the taxable boat or outboard motor from Texas to a designated state or
nation, and either;
(B) removes the
taxable boat or outboard motor from the territorial boundaries of Texas within
10 days of the date of sale;
(C)
places the taxable boat or outboard motor in a registered repair facility for
repair, remodeling, maintenance, or restoration within 10 days of the date of
sale and then removes the taxable boat or outboard motor from the territorial
boundaries of Texas within 20 days from the date the repair, remodeling,
maintenance, or restoration is completed; or
(D) obtains a temporary use permit within the
time limits described in this paragraph. The permit must be present on board
the boat at all times while the taxable boat or outboard motor is located
within the territorial boundaries of Texas.
(E) Noncompliance with the requirements in
this paragraph will result in the loss of the exemption and sales tax is due on
the sale of the taxable boat or outboard motor. Credit is not allowed for the
$150 temporary use permit fee against any sales tax that may be due.
(2) Sales or use tax is not due on
the purchase or use of a taxable boat or outboard motor in Texas by:
(A) the State of Texas; its unincorporated
agencies and instrumentalities; any county, city, special district or other
political subdivision of the State of Texas; and any college or university
created or authorized by the State of Texas;
(B) the United States; its unincorporated
agencies and instrumentalities, including all independent boards, commissions,
agencies, or instrumentalities chartered by the United States congress (e.g.,
the American Red Cross, Boy Scouts of America, Girl Scouts of America, etc.);
and any incorporated agency or instrumentality of the United States wholly
owned by the United States or by a corporation wholly owned by the United
States; or
(C) any volunteer fire
department or other department, company, or association organized for the
purpose of answering fire alarms, extinguishing fires, and providing emergency
medical services by members who receive no compensation or only nominal
compensation for their services rendered, if the volunteer fire department or
other department, company, or association uses the taxable boat or outboard
motor exclusively for exempt purposes.
(3) Sales or use tax is not due on a taxable
boat or outboard motor when:
(A) an insurer
takes title to the taxable boat or outboard motor as a result of a total loss
settlement or adjustment of an insurance claim for a damaged or stolen taxable
boat or outboard motor; or
(B) a
seller or lienholder takes possession of a taxable boat or outboard motor
repossessed under a retail installment sales agreement, a chattel mortgage, or
a security agreement.
(h) Refunds.
(1) Any person, or the person's attorney,
assignee, or other successor may request from the comptroller a refund of any
boat or boat motor sales and use tax paid in error.
(2) The request for a refund must:
(A) be in writing on Form 57-200, Texas Claim
for Refund of Boat and Boat Motor Tax, available at comptroller.texas.gov, its
electronic equivalent, or a successor form, promulgated by the
comptroller;
(B) state fully and in
detail the specific grounds upon which the claim is founded; and
(C) be filed within four years from the date
on which the tax was due and payable and within the provisions of Tax Code,
Chapter 111, Subchapter D (Limitations).
(D) The comptroller will require a person to
submit additional information to verify the refund claim, including a copy of
the title and tax receipt issued by the Department, agent of the Department, or
participating county tax assessor-collector.
(3) The comptroller will notify the claimant
if the comptroller determines that a refund claim cannot be granted in part or
in full and will also notify the claimant which requirements were not met. The
claimant may then request a refund hearing in accordance with Tax Code, §
111.105 (Tax Refund:
Hearing). A person may not refile a claim for the same transaction and for the
same ground or reason as a refund claim previously denied by the
comptroller.
(4) A person who
intends to file suit under Tax Code, Chapter 112, Subchapter B (Suit After
Protest Payment), must submit to the Department, agent of the Department, or
participating county tax assessor-collector a letter of protest with the
payment of the tax. The letter of protest must state fully and in detail the
reason that the person contends that the assessment is unlawful or
unauthorized. Upon receipt of the protest letter, the Department, agent of the
Department, or participating county tax assessor-collector must immediately
send the comptroller a copy of the protest letter and a copy of the tax receipt
showing tax paid to the comptroller.
Notes
State regulations are updated quarterly; we currently have two versions available. Below is a comparison between our most recent version and the prior quarterly release. More comparison features will be added as we have more versions to compare.
No prior version found.