Sales of Boats and Trailers by Dealers and Retailers

Sales price

Dealers and retailers must collect sales tax on the sales price of boats and trailers at the time of the sale unless an exemption applies. Items that are nontaxable aren’t part of the sales price. The final amount you charge your customer can include both taxable and nontaxable items.

What sales price includes

Sales price includes the following items, even if you separately state them on the invoice:

  • Freight or shipping charges to transport the boat or trailer to the seller before the sale
  • U.S. federal excise tax imposed on the manufacturer, wholesaler, or importer before the sale
  • All options and accessories (e.g., GPS system, depth finder, upgraded features, theft-deterrent systems)
  • Services, including charges for labor the dealer or retailer provides as part of the sale agreement (e.g., painting, coating, rust proofing, washing, waxing, cleaning, lettering)
    Note: See exemptions for service charges on certain new vessels sold by dealers as of July 1, 2019, below.
  • Labor charges before the sale (e.g., installation, fabrication, repairs required by the buyer including both parts and labor)
    Note: See “Exemption for labor to install accessories on new vessels,” below (effective July 1, 2019).
  • Mandatory service and warranty agreements
  • Dealer documentation, credit card and other service fees
  • Insurance settlements used to buy a replacement boat
  • Manufacturer’s rebates
  • Auction fees (e.g., gate fees, buyer’s fees, seller’s premiums)

What sales price doesn’t include

The sales price doesn’t include the following items if you separately state them on the invoice:

  • Retailer’s discounts or rebates
  • Title and registration fees a government agency imposes
  • Optional service and warranty agreements
  • Finance charges (e.g., loan origination fees, interest)
  • Optional insurance (e.g., Gap insurance)

Note: A customer down payment doesn’t reduce the taxable sales price.

Exemption for labor to install accessories on new vessels

Effective July 1, 2019, dealers’ labor or service charges to install accessories on certain new factory-delivered vessels are exempt.

The exemption covers vessels that fall into any of the following categories:

  • Sold with a motor
  • 11 feet or more
  • Canoes, kayaks, paddleboards and inflatable boats and similar watercraft that are at least 11 feet long and sold with a motor

Examples of labor installing accessories on new factory-delivered vessels that qualify for the exemption are:

  • Storage racks
  • Sealant, hull protectant, waterproofing
  • Sound systems
  • Anti-theft devices
  • Boat covers; bimini tops

Note: “Accessories” doesn’t include service or maintenance contracts.

Reference: Idaho Code section 63-3622OO, effective July 1, 2019.

Trade-in allowances

You can accept merchandise as full or partial payment of a boat or trailer you sell. The amount allowed on the traded-in merchandise reduces the taxable sales price, which is the amount you charge tax on.

  • You must put the traded merchandise into your resale inventory.
  • The trade-in and all documentation must take place at the time of the sale. If not, the trade-in allowance doesn’t reduce the taxable price.

Note: You can accept manufactured homes or modified park model recreational vehicles as trade-ins, but they don’t reduce the taxable price.

A leased boat or trailer you accept as a trade-in reduces the taxable sales price if both these criteria are met:

  • The customer has paid the lease in full.
  • The customer paid sales tax on the buyout of the lease.

Read this chart to see what is and isn’t included in the calculation of taxable sales pricepdf Vehicles and Vessels: Taxable Sales Price.

Exempt sales of boats or trailers by dealers and retailers

Most people must pay sales tax when they buy boats and trailers in Idaho. Only a few can buy boats and trailers tax exempt from Idaho dealers and retailers. Certain conditions must apply.

You could be held responsible for paying the sales tax yourself if you don’t collect it when you should.

Idaho buyers

Individual buyers don’t qualify for any exemption if they provide an Idaho driver’s license, Idaho address or Idaho contact information.

Military buyers

A military member who buys a boat or trailer to use in Idaho must pay tax even if Idaho isn’t the member’s state of residence.

Nonresident buyers

nonresident can be an individual, a company or organization. A business or organization is a nonresident if it’s not formed under Idaho laws, isn’t required to register with the Idaho Secretary of State to do business in the state, doesn’t have significant contacts with Idaho, and doesn’t have consistent operations in Idaho.

A nonresident that buys a boat or trailer for use outside Idaho might qualify for an exemption if all of the following apply:

  • The boat or trailer is intended for use outside Idaho and won’t require titling in Idaho.
  • The nonresident will take it out of Idaho and immediately register and title it (if required) in another state or foreign country.
  • It won’t be used in Idaho for more than 90 days in any consecutive 12-month period. (A day of use in Idaho is 16 hours during any 24-hour period.)

If the criteria above are met, an exemption can apply to:

  • Vessels with an attached motor, regardless of length
  • Vessels without a motor, 11 feet or more in length (Exception: paddleboards, inflatable boats, canoes, kayaks or similar watercraft are taxable if purchased in Idaho.)
  • Transport trailers

The exemption doesn’t apply to accessories that aren’t part of the boat or trailer bought in Idaho (e.g., life jacket, tow ropes, wakeboard).

A nonresident that buys a boat or trailer to take out of state doesn’t qualify for the exemption if an Idaho resident is included as one of the following:

  • Co-buyer on the sales invoice or retail purchase agreement
  • Co-borrower on loan applications
  • Co-applicant for title or registration
  • Party on any other sales documents

Each nonresident buyer must give you a completed pdf Form ST-104NR – Sales Tax Exemption Certificate – Nonresident Vehicle/Vessel. Keep the form for your records, and forward a copy to the Tax Commission in one of these ways:

  • Scan and email to:
  • Mail to: Idaho State Tax Commission – Tax Discovery Bureau, PO Box 36, Boise ID 83722-0410.

Government agencies, schools, some nonprofit organizations and American Indian tribes

Buyers listed below are exempt from sales tax on everything they buy, including boats and trailers.

  • U.S. federal government agencies
  • Idaho state and political subdivisions (such as cities and counties)
  • Public schools
  • Some nonprofit schools
  • Certain nonprofit and health organizations specifically exempted by Idaho law (e.g., nonprofit hospitals, qualified health organizations)
  • American Indian tribal governments and tribal-owned entities

These agencies and organizations must give you a completed pdf Form ST-101 – Sales Tax Resale or Exemption Certificate>. Keep the exemption certificate for your records. The exemption doesn’t apply to buyers who are employees purchasing an item for personal use and not on behalf of the exempt agency. You could be held liable for the sales tax on taxable purchases if you don’t collect it.

Note: For a complete list of exempt agencies and organizations, see our Exemptions guide.

Members of American Indian tribes

The laws for buying a boat or trailer tax free are different for individual members of American Indian tribes than for the tribes themselves. Tribal members must take delivery of the boat or trailer on a reservation for the sale to be exempt from sales tax.

The buyer must give you, the dealer or retailer, a completed pdf Form ST-133 – Sales Tax Exemption Certificate – Family or American Indian Sales. Keep the form for your records. Your records must clearly show that you delivered the off-highway vehicle to the reservation. Otherwise, you could be held liable for the sales tax.

This chart lists all available vehicle and vessel sales/use tax exemptions including boats and trailerspdf Vehicles & Vessels: Exemption Certificates.

Servicing boats or trailers by dealers and retailers

Repair work for off-highway vehicles takes many forms.

This pdf Vehicles and Vessels: Repairs chart explains how to buy, bill and charge tax on parts used in different types of off-highway vehicle repairs in Idaho, including repairs under warranty.

Read Boat repair, including winterization fees for more information.

Note: You owe tax on the tools and shop supplies you buy for making repairs.