How do I know if I owe sales tax on the boat I just purchased?
Isolated or Casual Sales:
Currently, there is no state sales tax due on isolated or a casual sale.
Boats that are sold by individuals may be considered an isolated or occasion sale if the seller is not engaged in the business of selling boats. If the seller is selling a boat that he no longer uses and he sells to another individual, this transaction would be classified as an isolated sale. However, if the seller periodically buys a boat to resell, then this seller would be considered a “dealer” under Louisiana sales tax laws.
Retail Sales
Retail sales are taxed at the current sales tax rate. In the case of boats purchased from a Louisiana dealer or builder, any sales taxes due must be paid to the dealer or builder for payment to LDR.
Consignment sales and auction sales are considered sales by dealers.
Brokered Sales
The use of a broker will not necessarily disqualify a transaction from qualifying as an isolated or occasional sale as long as the seller meets the following criteria:
the seller does not hold him/herself out to be engaged in the business of selling boats or vessels;
the seller does not have a history of frequent, regular and repeated sales of boats or vessels;
the seller maintains title, if the boat or vessel is titled, or possession, if the boat or vessel is not titled; and
the seller purchased the boat or vessel for his/her own use. Further, to qualify a transaction as an isolated or occasional sale under the provisions of La. R.S. 47:301(10)(c)(ii)(bb), a buyer must submit documentation, such as a canceled check from the seller to buyer and a bill of sale indicating title is being transferred or the prior owner’s certificate of registration showing his or her transfer of ownership to the buyer.
(Answer revised July 9, 2024)