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What do I file if I recently purchased a boat?

Answer #746 -- ( Published 09/08/2008 12:09 PM | Updated 07/12/2017 10:39 AM )

I recently acquired a boat. What do I need to fill out and how much tax do I need to pay?

You must use Form RUT-75, Aircraft/Watercraft Use Tax Transaction Return, if you acquire the watercraft from a person or business that is not in the business of selling watercraft at retail. You must pay tax on the watercraft's purchase price. If the watercraft's purchase price is less than the fair market value, you must pay tax on the watercraft's fair market value on the date acquired or the date brought into Illinois, whichever is later. If you acquire a share of a watercraft, tax is based on the purchase price or fair market value of the share acquired. There is no provision for a trade-in allowance under Watercraft Use Tax. The tax rate is 6.25 percent of the purchase price or fair market value, whichever is greater.

If you purchase a watercraft from a registered dealer, the dealer will collect and remit the tax for you using Form ST-556, Sales Tax Transaction Return. The tax is based on the purchase price, and the tax rate is determined by the location of the dealership. Note that some local governments also may impose a separate local use tax on the transaction. If the boat is part of a lease transaction, the dealer will collect and remit the tax using Form ST-556-LSE, Transaction Return for Leases, instead.

If you purchase a watercraft from an unregistered or out-of-state dealer or retailer, you must file and pay the tax using Form RUT-25, Vehicle Use Tax Return. The tax is based on the watercraft's purchase price. The tax rate is 6.25 percent of the purchase price, and the tax rate is determined by the address at which the watercraft will be registered or titled in Illinois. Again, note that some local governments also may impose a separate local use tax on the transaction. If the boat is part of a lease transaction, you must use Form RUT-25-LSE, Use Tax Return for Lease Transactions, instead.

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