Sales Tax and Boat Purchases
This section was created to explain boat and trailer sales tax rules for retailers in Minnesota. Common questions are answered like: Do I have to pay sales tax on a boat purchased in Minnesota? What is the tax rate on a boat purchase in Minnesota? Do I get credit for sales tax paid to another state? Please continue to read on for more information.
General Sales Tax Overview
The State of Minnesota requires sales tax to be collected by businesses selling boats. Minnesota Sales tax rate on boats is 8.125%. Boat Trailers are taxed at 6.875%. Minnesota Residents are required to pay sales tax and registration to Used Boat World for purchases of boats and trailers.
Link to State of Minnesota DNR: Sales & Use Tax info MN DNR
Link to Minnesota Motor Vehicle (trailer) guide: Minnesota Motor Vehicle Transfer Guide
What sales are tax exempt?
Resale and Special Use
Sales tax will not be collected if the purchasing party provides a valid sales tax exemption form including a registered state sales tax identification number. Sales tax exemption is typically used by businesses purchasing for resale. Sales tax exemption certificates are accepted from all states included in the United States of America.
Trailer and Vehicle Sales to out of state residents
Minnesota State Sales tax will not be collected on trailers and automobiles if the purchasing party provides valid identification showing residency in a state outside of Minnesota. Title or registration will be given to the purchaser upon completion of the sale at Used Boat World. All taxes and registration fees will be the responsibility of the purchaser in their respective state.
Online Purchases
Minnesota State Sales tax will not be collected from out of state residents by Used Boat World if the product is shipped out of state and the sale occurs through:
- Phone purchase
- Mail purchase
- Wire purchase
Shipping out of state must be completed by a known common carrier. A bill of lading must be provided to Used Boat World before the unit is released.
Note: If you live outside of Minnesota and want to drive your boat and trailer home from Used Boat World, you will be charged applicable
Wisconsin Residents
Wisconsin residents who visit Used Boat World in person will have to pay Minnesota Sales Tax if purchasing a boat or pontoon. Sales Tax paid to Minnesota will be credited toward Wisconsin Sales Tax when you register your boat.
If you live in Wisconsin and purchase a Trailer or Automobile from Used Boat World, you will not be charged Minnesota Sales Tax. Wisconsin residents will be required to pay the Wisconsin DMV all taxes and fees due at the time of trailer or automobile registration.
If you live in Wisconsin and purchase a boat or pontoon from Used Boat World by mail, wire, or by phone, you will only pay sales tax in your state. You must have the boat shipped by a common carrier out of Minnesota, otherwise sales tax will be charged in Minnesota. A common carrier must be an established entity in the business of shipping or towing and be able to provide a bill of lading to Used Boat World. Used Boat World will not release the boat or pontoon without a qualifying bill of lading from the shipping company. If your shipping arrangements fall through, Boat World will require payment in full of Minnesota Sales Tax before releasing the boat.
Please visit this link to Wisconsin's DNR to verify current regulations on taxation and registration:
Registration for boats and off-highway recreational vehicles
Registration information Notes from Wisconsin DNR:
Proof of sales tax payment is required for all sales transactions. Sales tax paid to another state on the boat may be claimed as a credit to reduce the tax payable. Any county tax or similar tax paid in the other state may be claimed as a credit to reduce county tax payable.
You must have a Wisconsin Certificate of Number (i.e. registration) and expiration decals to legally operate a recreational vessel legally. Exceptions to the requirement to register a recreational vessel include: sailboats 12 feet of length or less and not equipped with a motor sailboards manually propelled vessels that are not equipped with a motor or sail vessels registered in another state and using Wisconsin waters for less than 60 consecutive days. Titles A boat title is similar to a car title. A boat title is a legal document proving ownership.
South Dakota Residents
South Dakota residents who visit Used Boat World in person will have to pay Minnesota Sales tax if purchasing a boat or pontoon. Sales tax paid to Minnesota will be credited toward South Dakota State Sales & excise tax when you register your boat. SD tax is less than Minnesota, so you will pay only the Minnesota Rate. Additional registration fees will apply and be the responsibility of the purchaser. See links at the bottom of this section for more about boats and South Dakota registration.
If you live in South Dakota and purchase a Trailer or Automobile from Used Boat World, you will not be charged Minnesota sales tax. SD residents will be required to pay the SD DMV all taxes and fees due at the time of trailer or automobile registration.
If you live in South Dakota and purchase a boat or pontoon from Used Boat World by mail, wire, or by phone, you will only pay sales tax in Your state. You must have the boat shipped by a common carrier out of Minnesota, otherwise sales tax will be charged in Minnesota. A common carrier must be an established entity in the business of shipping or towing and be able to provide a bill of lading to Used Boat World. Used Boat World will not release the boat or pontoon without a qualifying bill of lading from the shipping company. If your shipping arrangements fall through, Boat World will require payment in full of Minnesota sales tax before releasing the boat.
Notes from SD on Boat excise (sales) tax: If you have already paid tax on the vehicle to another state, and that tax is equal to or greater than South Dakota's 3% excise tax, you will owe no tax. If the tax already paid is less than South Dakota's, you will receive credit for the tax previously paid and will be assessed tax up to the 3%. Further proof that you paid the tax, other than the title in your name, may be required. If sufficient proof of previous tax paid by the applicant cannot be furnished, the county treasurer will collect the 3% motor vehicle excise tax on the retail value of the motor vehicle listed in the National Automobile Dealers Used Car Guide (NADA). For more information about titling procedures or buying and selling vehicles in South Dakota, contact your local county treasurer's office or the Titling and Registration Section of the Division of Motor Vehicles in Pierre.
Click on the link and choose "Title application requirements for a vehicle previously titled and licensed in another state": SD Department of revenue Tax rules
Link shows boat registration form for SD: SD Boat Registration Form
Link shows boat registration and tax outline: SD Boat registration charges
Link shows SD boat fees by size: SD Boat Registration fee by size link
Link is a verification of sales tax paid form for SD. Used Boat World can fill this out for you upon purchase. SD Verification of Tax Assessment out of state
Iowa Residents
Iowa residents will be charged Minnesota sales tax on a boat or pontoon purchase in Minnesota when buying from a dealer. Any sales tax payment over 6% will be credit toward Iowa tax due at the time of registration. Used Boat World is located in Anoka County, Minnesota. Tax rate for boats is 8.125%. Iowa residents will not have to pay any state sales tax to Iowa when registering the boat.
Iowa residents will not be charged sales tax on the trailer. Used Boat World will invoice trailers on a separate line apart from your boat and motor. Iowa residents will pay 5% tax on the trailer in Iowa.
If you live in Iowa and purchase a boat or pontoon from Used Boat World by mail, wire, or by phone, you will only pay sales tax in Your state. You must have the boat shipped by a common carrier out of Minnesota, otherwise sales tax will be charged in Minnesota. A common carrier must be an established entity in the business of shipping or towing and be able to provide a bill of lading to Used Boat World. Used Boat World will not release the boat or pontoon without a qualifying bill of lading from the shipping company. If your shipping arrangements fall through, Boat World will require payment in full of Minnesota sales tax before releasing the boat.
Local county sales taxes in Iowa may not be reduced by showing state sales tax paid to Minnesota. Local sales taxes are typically 0-1%.
Link to Iowa Boat Registration: Iowa Boat Registration Form
North Dakota Residents
North Dakota Residents will be charged sales tax on boat sales from Used Boat World. ND residents will not have to pay any sales tax upon registration of the boat or pontoon. ND residents must show proof of sales tax paid to Minnesota. Sales invoices from Used Boat World will show sales tax paid of 8.125% on the boat.
Link to North Dakota Boat Registration
North Dakota residents will not be charged sales tax on a trailer or automobile. Used Boat World will invoice trailers on a separate line apart from your boat and motor. ND residents will be required pay ND state sales on the trailer upon registration in ND. Boat World does not collect the trailer sales tax for North Dakota.
If you live in North Dakota and purchase a boat or pontoon from Used Boat World by mail, wire, or by phone, you will only pay sales tax in Your state. You must have the boat shipped by a common carrier out of Minnesota, otherwise sales tax will be charged in Minnesota. A common carrier must be an established entity in the business of shipping or towing and be able to provide a bill of lading to Used Boat World. Used Boat World will not release the boat or pontoon without a qualifying bill of lading from the shipping company. If your shipping arrangements fall through, Boat World will require payment in full of Minnesota sales tax before releasing the boat.
Canadian Residents
If you live in Canada and purchase a boat, pontoon or trailer from Used Boat World, you will be charged Sales Tax. Minnesota State Law requires 8.125% sales tax on tangible property including boats and pontoons sold to Canada. Sales tax of 6.5% will be charged on trailers sold to Canadian residents.
Used Boat World will not make exceptions for the required Minnesota state sales tax. All Canadians must pay Minnesota sales tax, even if you represent a licensed Canadian business.
Verify with your local authorities all taxation and registration requirements before completing any purchases. This web page was created for informational purposes only. This page is not legal advise. Laws and regulations may change at anytime. Information on this site is not a promise or guarantee of charges to be paid in your state. Users of this information, including but not limited to customers of Used Boat World accept all risk for sales tax and registration to be paid outside of Minnesota. If you purchase a product from Used Boat World, Used Boat World will not pay any taxes or registration to any state other than Minnesota. If taxes and fees are due to Minnesota you will be charged for them on your sales invoice. Used Boat World will not issue any refunds, rebates or returns for taxes or registration due and not collect at the time of sale.