Boat and Boat Motor Tax FAQ

Frequently Asked Questions - Boat and Boat Motor Tax

Which boats are subject to the tax?
The tax is imposed on every retail sale of a boat that is 65 feet in length or less measured from end to end over the deck, excluding the sheer. It includes sailboats, inboards, outboards, and personal watercraft. The tax does not apply to canoes, kayaks, inflatable boats, punts or boats designed to be propelled only by a paddle or pole. These crafts and others excluded from boat tax are subject to Texas Limited Sales and Use Tax.

Which boat motors are subject to the tax?
The tax is imposed on every retail sale of a gasoline or diesel internal combustion motors. The tax does not apply to electric motors (such as trolling motors) unless an electric motor is attached to a boat subject to boat tax and is sold with that boat for a single sales price. Electric motors are subject to Texas Limited Sales and Use Tax.

What is the rate for the boat and boat motor tax?
The state boat and boat motor tax is 6.25 percent of the taxable value. No local tax applies.

What is the taxable value?
The taxable value is the total amount paid for a boat or boat motor and includes all accessories attached before or at the time of sale, transportation costs before the sale and any U.S. manufacturer's or importer's excise taxes.

Will a trade-in reduce the taxable value?
Yes. The taxable value of the boat or boat motor maybe be reduced by the amount of the trade-in.

Do I owe tax if I bring a boat or boat motor into Texas from another state?
A Texas resident owes use tax when a boat or boat motor is purchased in another state and is brought into Texas for use in Texas. The use tax rate is 6.25 percent, the same as the boat and boat motor sales tax, with a credit given for any sales or use tax legally paid to another state. A new Texas resident who brings a boat or boat motor into Texas qualifies for a special $15 use tax in lieu of the 6.25 percent use tax.

Are nonprofit organizations or governmental entities exempt from the boat and boat motor tax?
Generally, nonprofit organizations are not exempted from the tax. Volunteer fire departments and local governments, including cities and counties, do not have to pay the tax.

Who collects the tax?
The tax is paid to the Texas Parks and Wildlife Department or to the county tax assessor-collector when the boat is titled and registered in Texas.