MRAA joins regional and national groups challenging new proposal

The Marine Retailers Association of the Americas (MRAA) has submitted comments to the Washington State Department of Revenue (DOR) in opposition to a proposed increase in the Watercraft Excise Tax depreciation schedule.

Currently, an annual tax of 0.5% of the boat’s fair market value applies to all registered boats in Washington state that are 16ft or longer or equipped with a motor larger than 10hp. The DOR is proposing to update the depreciation schedule which will ultimately result in boat owners paying more.

“We hope that [the DOR] can understand the burden this change will put on boat owners throughout the state,” said Chad Tokowicz, government relations manager at the MRAA. “Boat owners in the state already pay their fair share through registration and other fees and, according to 2019 data, 61% of boat owners in America earn $70,000 a year or less.”

The proposed rule would create depreciation categories for powerboats, personal watercraft, and sailboats, and are much lower compared to depreciation data from the National Marine Manufacturers Association (NMMA). The proposed rule holds Year-1 depreciation rate of either 2% or 3% while data compiled by the NMMA shows 10% for Year-1 and 5%-10% for each year thereafter.

In short, Washington state is calculating depreciation at a lower rate than the national average.

Unlike private planes and RV owners, boaters are the only recreational user group to pay this percentage-based excise-tax in Washington state, and MRAA points out that Washington state boaters support and buy-in to programs like the Washington Department of Fish and Wildlife’s Aquatic Invasive Species program and the Department of Natural Resources Derelict Vessel Removal Program.

MRAA joined regional and national groups challenging this proposal such as BoatUS, Recreational Boating Association of Washington, Northwest Marine Trade Association, Washington Retail Association, and Washington Maritime Federation.