Donating or Giving Away a Boat or Trailer

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 pdf 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 on the purchase of any boat or trailer, even if you intend to give it away. You can’t advertise or require that “the winner is responsible for all taxes.”
  • 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.
Donations like those in the examples above might be a gift if all of the following apply.
  • 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:

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.

You and the donor must complete and sign a pdf 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.