Rhode Island levies no sales tax, no property tax and no use tax on boats
The term “tax haven” and “Rhode Island” are rarely uttered in the same breath. When it comes to boat ownership, however, RI is one of the boat-tax-friendliest states in the country with no sales tax, no use tax, and no property tax on boats. Add to that the awesome scenery of Narragansett Bay, and you’ve got a boater’s paradise perfect for a coastal summer home.
You can register your boat in Rhode Island even if you are not a RI resident. In fact, RI’s Department of Environmental Management advises if your boat is in RI for more than 90 days a year, it should be registered here.
To learn more read these FAQs for registering your boat in RI.
Rhode Island Has No Tax on Boating Services
That’s right: Zip. Zero. Nada!
Not only does RI forego boat sales taxes and boat property taxes, it also levies NO taxes on boating services. Dockage, retrofits, repairs and mooring fees are not taxed in Rhode Island. This policy has allowed RI to develop world-class yachting facilities, boat-building services, and technical talent. We’re a sea-faring people, and we know our boats.
The no-tax standard applies to new or used, big or small, power or sailboats. If you purchased your boat after July 23, 1993, you’re good to go. In addition, all those other marine-related things you will buy along with your vessel? They are part of the sale and free from RI sales tax.
Rhode Island Has No Property Taxes on Boats, Either
Unlike federal taxes, which do not apply to boats (at least at this writing), state and local boat taxes are in play in most states along the eastern seaboard. Where applicable, sales taxes are due upon purchase and personal property taxes are due annually on property kept in state. If you’re buying a large boat, the tax liability can really add up.
Rhode Island Ranks #1 in New England for Boaters
Among the New England states, Rhode Island has the most favorable tax structure for boat owners. Here is a summary of neighboring states’ boat taxes (Note: Rates are subject to change. Please confirm current tax structures if you are considering a boat purchase.)
Connecticut: 6% sales tax.
Massachusetts: 5% sales tax and annual property taxes.
New Hampshire: Variable sales tax depending on size and propulsion.
Maine: 5% sales tax and annual property taxes.
Rules and Regulations on Docks in Rhode Island
While boaters get a free pass on taxes, there could be other challenges owners may run up against. For example, docks for sailboats with deep, long keels are a scarce commodity. If this is something you’re looking for, this post on deep water docks could help you understand your options.
Before you hit the bay, keep in mind that there is a mandatory in-state boating education certification requirement that’s been in place since 2002 for anyone born after January 1, 1986. You can read more on this in our post about boating license requirements in Rhode Island.
Savvy Sailors are Moving to RI
Considering a vacation home purchase? If you’re a boat owner looking for some of the best cruising waters on the east coast AND a favorable tax environment, you owe it to yourself to consider Rhode Island. Give us a call. We’d love to help.
ABOUT HOGAN ASSOCIATES
Hogan Associates is an independent Rhode Island brokerage founded by Leslie Hogan and Matt Hadfield, two of Rhode Island’s most experienced agents, each with a strong track record of success in the Greater Newport real estate market. Hogan Associates’ 36 sales agents work on behalf of buyers and sellers of fine properties in the coastal communities of southern RI. The firm has offices in Newport and Middletown and is a member of Who’s Who in Luxury Real Estate, an elite broker network with more than 130,000 sales professionals located in approximately 880 offices in 70 countries and territories. In 2020 & 2021 Hogan Associates received Newport Life Magazine’s Best of Newport County award. For more information, visit HoganRI.com.