State Sales Tax Paid On A Boat Purchase Can Be Deducted On Form 1040

A Reminder to Boat Dealers

Because a lot has been written about the newly passed Stimulus Law where a deduction can now be taken for sales tax paid on the purchase of vehicles like cars and RVs, MRAA wants to remind boat dealers that on October 22, 2004, then President George W, Bush signed the American Jobs Creation Act into law giving a special federal deduction for state and local sales tax paid on the purchase of recreational boats. The law allows the option for an individual claiming itemized deductions to include general sales tax or in the case of a major purchase, like a boat, the entire amount of the tax paid. MRAA also strongly encourages dealers to suggest customers consult with their tax accountants on the application of the sales tax deduction.

The law allowing the sales tax deduction has been re-newed several times by Congress with the most recent authorization set to expire in 2010. MRAA has long supported each re-authorization and several bills, which were written, to make the special sales tax deduction permanent.

"MRAA has informed boat dealers about this very important tax savings several times over the past few years, because we believe it is an important factor in the selling process. It is even more important today to sell this income savings in these very hard times," said Ed Lofgren, MRAA Chairman.

For more information, please contact Larry Innis, MRAA Washington Representative at 301-858-7149 or LarryInnis@aol.com