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Rhode Island: Paddleboards are Tax Exempt

  • Oct 13, 2014 | Gail Cole

 Where to?

New and used boats are generally exempt from Rhode Island sales and use tax. However, Rhode Island sales and use tax generally applies to boats and watercraft without a hull or a hull identification number. Last time I looked, paddle boards don’t have a hull. Why then, does a newsletter recently published by the Rhode Island Division of Taxation state that paddleboards are now exempt from sales tax?

It turns out that the United States Coast Guard “considers a stand-up paddleboard to be a vessel when the paddleboard is used beyond the narrow limits of a swimming, surfing, or bathing area.” When a paddleboard is “used to travel long distances, for point-to-point travel,” it is “deemed to be a vessel.”

The sales and use tax exemption took effect on July 1, 2014. Anyone who paid sales tax on the purchase of a paddleboard in Rhode Island on or after July 1 may apply for a sales tax refund. The Division of Taxation advises taxpayers to ask the retailer for a refund: “The retailer may then claim a credit on the retailer’s sales and use tax return.”

Paddling auditors?

Will the exemption apply to the sale of all paddleboards, even if they are purchased for use solely within the narrow limits of a swimming area ? It’s difficult to say. The Division of Taxation newsletter states that “in almost all cases, the sale of a paddleboard is now exempt from Rhode Island sales and use tax.”

“Almost all cases.”

Perhaps auditors will take to the water to question paddleboarders, or follow them to see where they paddle.

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.