Though an industry coalition successfully thwarted a more significant luxury tax proposal on boat sales in 2025, a smaller but more broadly applied tax on recreational boat sales took effect July 1.

The following details about this new tax are courtesy of Northwest Marine Trade Association (NMTA): 

Starting July 1, 2026, an additional tax of 0.5% applies to each retail sale of a recreational vessel in Washington State. The tax is due at the time of purchase or at the time of first use in Washington. 

This new tax is the result of legislation adopted in 2025 after lawmakers sought additional revenue for the state’s transportation budget. However, it also represents a significant advocacy victory for NMTA as lawmakers had originally proposed a 10% luxury tax on new and used recreational vessels valued at more than $500,000 with Senate Bill 5801. Had it passed, the tax would have had extremely serious consequences across the region’s entire marine industry. 

Working alongside partners at Recreational Boating Association of Washington (RBAW) and Northwest Yacht Brokers Association (NYBA), the coordinated effort successfully defeated the luxury tax. However, we did not emerge without some additional tax burden in the form of this new 0.5% tax.

Visit the Department of Revenue New Recreational Vessel Tax page for more information.

www.dor.wa.gov

Header background photo by Joe Cline.