Giving a boat or trailer to a person
Transferring ownership of a boat or trailer to another person or entity is generally subject to tax, but certain gifts are exempt. A boat or trailer qualifies as an exempt gift if all of the following apply:
- You, as the giver, don’t receive services or anything of value for the boat or trailer.
- Your relationship with the recipient supports the basis for a gift.
- The recipient doesn’t assume any of your debts or liabilities.
- Neither you nor the recipient owes money on the boat or trailer.
Notes
- If you transfer a boat or trailer to someone else and allow them to “take over payments,” the recipient has assumed a debt. The transfer isn’t a gift, and the buyer owes tax on the value of the remaining payments.
- You might be required to provide more information if you have a business relationship with the recipient.
When you give away a boat or trailer that qualifies as an exempt gift, give the recipient a completed Form ST-133GT – Use Tax Exemption Certificate – Gift Transfer Affidavit, with your signature. The recipient also must sign the form.
Giving a boat or trailer as a donation or prize
- You must pay sales or use tax if you buy (or remove from inventory) a boat or trailer specifically to donate or give away as a prize.
- You don’t owe use tax if you donate a boat or trailer you already own and have paid tax on.
Examples:
- You buy a paddleboard from a dealer to donate for a school raffle. You must pay tax when you buy the paddleboard.
- You buy a boat from your neighbor to donate to a church youth group. Before donating it to the church, you must title the boat in your name and pay use tax on the amount you paid your neighbor.
- You donate a trailer you already own to a nonprofit group that does wilderness activities. You paid tax when you bought the trailer, so you don’t owe use tax when you donate it.
- You remove a kayak from your inventory and give it away as a prize for a student’s school achievement. You owe use tax on the cost of the vehicle you provided as a prize. The winner can’t be held responsible for the tax you owe.
- The recipient isn’t performing any services to get the donation.
- The recipient isn’t giving you anything of value for the donation.
- The recipient isn’t assuming any of your debts.
Note: You might be required to provide more information if you have a business relationship with the recipient.
When you give away a boat or trailer that qualifies as an exempt gift:- Give the recipient a completed Form ST-133GT – Use Tax Exemption Certificate – Gift Transfer Affidavit, with your signature.
- The recipient also must sign the form and present it when he or she registers or titles the boat or trailer.
Receiving a boat or trailer as a gift or prize
You don’t owe use tax when you receive a boat or trailer that qualifies as a gift or is a prize.
- Your uncle gives you a Jet Ski® for your high school graduation.
- You win a fishing boat in a raffle.
You and the donor must complete and sign a Form ST-133GT – Use Tax Exemption Certificate – Gift Transfer Affidavit.
- Present the completed Form ST-133GT when you register the boat or trailer.
- If the donor can’t sign the affidavit, you can do one of the following.
- Provide a signed letter from the donor stating that the boat or trailer is a gift.
- The donor can sign and mark the title as a gift.
Prize winnings are subject to income tax even if they qualify for a use tax exemption.