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Committee approves bill moving boat sales-tax collection to tag/registration process
Summary
Senate Bill 638 was approved by the committee; the bill shifts where sales tax is collected for motorboats so taxes are paid at registration with the Department of Finance and Administration, not at the point of sale. The measure was presented as revenue-neutral and includes a 30-day registration window and 10% penalty for late registration.
The Legislative Tax Committee approved Senate Bill 638, a measure to change where sales tax on motorboats and associated items is collected. State Senator Justin Boyd and Representative Jamie Lee Johnson presented the bill, describing it as a change in collection location rather than a tax cut or new tax.
"All we're doing is changing the location of where the tax is collected so it's not a new tax," Senator Justin Boyd said, adding the sponsor and DFA reached a revenue-neutral version with DFA input.
Under the bill as described in committee, buyers of new or used motorboats purchased from motorboat dealerships would pay sales tax when they register the boat with the Department of Finance and Administration (DFA), similar to motor vehicle sales. Paul Gehring of DFA said purchasers would have 30 days to obtain a certificate of number and pay the tax; a 10% penalty applies for failing to register within that window.
The bill applies to motorboats as defined in statute 27-101-103: "Motor boat means any vessel operated upon water and propelled by sail or machinery . . ." The committee read the statutory definition into the record and confirmed that the measure addresses motorboats (and accompanying trailers and motors) rather than non-motorized recreational craft sold in retail stores.
Committee members asked whether shifting collection to DFA could recreate difficulties seen with motor-vehicle temporary tags, where taxes sometimes go unpaid after vehicles operate with temporary tags. DFA officials said temporary tags for trailers are typically issued at purchase and that enforcement tools include assessments, penalties and the agency's ability to withhold registration renewals. "If that person does not come in and register the obtain the certificate of number and, pay the sales tax on their purchase, there is a 10% penalty that applies," Paul Gehring said.
Senator Boyd moved that the bill "do pass," Senator Crowes seconded, and the committee approved the motion by voice vote. The committee did not record a roll-call tally in committee; members present voiced approval.
