If you are considering purchasing a boat, car, or personal aircraft, you may want to close your transaction before the new WA State additional excise tax takes effect in 2026. The additional excise tax (considered as a luxury tax) will be imposed on the sale of boats, vehicles, and private aircraft beginning in 2026, this is in addition to the sales tax imposed on all three modes of transportation.
Boats and Watercraft. Beginning July 1, 2026, a new additional 0.5% tax will apply to watercraft defined as “every watercraft used or capable of being used as a means of transportation on the water, other than a seaplane.” Other regulations remain, including the requirement to register the vessel to pay the State’s annual excise tax imposed on the fair-market value. A vessel traded in as partial payment does not reduce the amount the tax applies to. Vessels not subject to this additional 0.5% tax include government vessels, vessels without propulsion (rowboats, canoes, kayaks.), vessels primarily engaged in commerce, and vessels held for resale by a licensed dealer. Boats used exclusively for commercial fishing and vessels owned by nonprofit organizations are also exempt from this additional tax.
Motor Vehicles. Effective January 1, 2026, buyers of most non-commercial vehicles priced at over $100,000 will pay an 8% tax on the amount exceeding $100,000. This is in addition to the regular sales tax rate. Trade-in vehicles that reduce the out-of-pocket purchase price, does not affect the amount subject to the tax. Off-road vehicles for recreational purposes used on trails and natural terrain are exempt. School buses and vehicles transporting more than 16 people are generally exempt. Vehicles with a gross weight of over 10,000 pounds are exempt from the tax. Motorhomes are not exempt from the tax.
Private Aircraft. Washington State is imposing a new 10% tax on non-commercial aircraft sales over $500,000 and leased aircraft with a fair market value over $500,000 effective April 1, 2026. As with motor vehicles and boats, the tax is based on the sales price. Aircraft not subject to this tax include government owned and operated aircraft, aircraft registered in another country or state, aircraft primarily involved in interstate or foreign commerce, as well as any airplane designed to carry a certain number of people with a range over 7200 miles and a certain level fuel efficiency.
Those planning a boat, car, or private aircraft purchase in Washington State with questions regarding this change to the state sales tax law, may want to contact their local tax advisor.
Image: WA State Dept. of Revenue
