Indiana boat buyers pay two different charges that people mix up. Sales or use tax is 7% of consideration after cash discounts and like-kind watercraft trade-ins. On a $20,000 private purchase that use tax is $1,400 at the BMV. On a $12,000 dealer boat with a $500 dealer discount, a $4,000 like-kind trade, and a $1,000 manufacturer rebate, taxable consideration is $7,500 and 7% tax is $525 — the rebate does not come off. Separately, Indiana charges an annual boat excise tax by MSRP class and age, plus a registration fee that combines a length fee and an excise-class fee. Those excise and length dollars live on the BMV watercraft fee tables; this page does not copy an unofficial class amount. A boat in storage with a qualifying contract pays a flat $12 storage excise and gets no decals. The Department of Revenue sets sales and use tax. The BMV collects use tax at title and registration and bills excise and registration.
How much is Indiana boat sales tax and registration?
A dealer collects 7% and issues Form ST-108. A private buyer pays 7% use tax at the BMV on the bill of sale unless an ST-108E exemption reason actually fits. Non-motorized canoes, rowboats, and paddleboats (not sailboats) are exempt from registration. Titles typically start at 12 feet. Excise and length fees still come from the live BMV table.
| Deal | 7% sales/use | Excise / registration |
|---|---|---|
| $20,000 private purchase | $1,400 | BMV length + excise-class table |
| $12,000 − $500 dealer discount − $4,000 like-kind trade ($1,000 rebate ignored) | $525 | BMV table |
| $15,000 boat, $800 tax paid to another state | $250 | BMV table |
| Stored boat with qualifying contract | sales/use as the purchase requires | $12 storage excise; no decals |
Example: Private $20,000 purchase at the BMV
Scenario: Indiana resident buys a used 18-foot boat from a neighbor for $20,000. No like-kind trade. No ST-108E exemption. You title and register at the BMV.
The $1,400 is sales/use tax, not the annual excise. Budget both.
Example: Dealer deal with discount, like-kind trade, and a rebate
Scenario: List $12,000. Dealer discount $500. Like-kind watercraft trade-in $4,000. Manufacturer rebate $1,000. Dealer collects 7% and issues ST-108.
If you subtracted the $1,000 rebate, taxable would look like $6,500 and tax like $455. That understates tax by $70. Leave the rebate in.
- Indiana DOR, Sales Tax Information Bulletin #28WC (May 2026)
- Indiana BMV, Boat Fees and Taxes
- IC 6-2.5-2-2 (7% rate)
The tax rule: 7% sales/use plus a separate boat excise
Indiana’s 7% is ordinary sales tax when a dealer sells the boat and use tax when you register a private or out-of-state purchase at the BMV. The base is actual consideration after cash discounts and like-kind trade-in allowances. Manufacturer rebates are not deductible. Dealer discounts and manufacturer price reductions are.
Annual boat excise tax is not a second 7%. It is a statewide schedule by MSRP class and age on the BMV site. You can owe 7% once on the purchase and then owe excise every year you keep Indiana decals. A Coast Guard–documented vessel still owes Indiana use tax at the BMV. Documentation does not skip Bulletin #28WC.
Example: Out-of-state tax credit against the 7%
Scenario: You paid $800 sales tax to another state on a $15,000 boat. You now title it in Indiana. Indiana 7% on $15,000 is $1,050.
If the other state had charged $1,200, Indiana use tax due would be $0, not a refund of the extra $150 through this credit.
Example: Documented cruiser still pays 7%
Scenario: You bring a Coast Guard–documented 36-foot boat into Indiana. Purchase price $40,000. No other-state credit. You visit the BMV.
A federal document is not an Indiana 7% holiday.
- Bulletin #28WC — sales/use, documented vessels, out-of-state credit
- BMV Boat Fees and Taxes — excise class/age; storage $12
Like-kind trade-ins, rebates, dealer vs private
Only a like-kind watercraft trade-in reduces the 7% base: watercraft for watercraft of the same kind and character. A boat traded toward a trailer is not like-kind. A boat traded toward a personal watercraft is not like-kind. Bulletin #28WC draws those lines. Private sales still pay 7% at the BMV; they are not a casual-sale holiday.
Dealer discounts and manufacturer price reductions come off consideration. Manufacturer rebates do not. If the invoice buries a rebate in a “discount” line, ask the dealer to split them the way DOR does.
Example: Boat traded for a trailer — no reduction
Scenario: You buy a $20,000 boat. The dealer takes your trailer for $3,000. Someone subtracts the trailer from the boat price before tax.
Sell the trailer separately if you want a clean boat number. Do not net it against the hull for Indiana 7%.
Example: Boat traded for a PWC — no reduction
Scenario: You buy a $12,000 personal watercraft. The dealer credits $4,000 for your 18-foot fishing boat.
Like-kind means the same kind of watercraft, not “anything that floats.” Two similar boats can qualify; a boat and a PWC do not.
- Bulletin #28WC — like-kind definition; boat-trailer; boat-PWC; rebates vs dealer discounts
No county sales tax on the 7%
Indiana does not layer a county sales tax on the 7% watercraft sales or use tax. Marion County and Lake County buyers use the same 7% state rate as a Brown County buyer. What does change by boat — not by county sales-tax add-on — is the statewide excise class and the length fee on the BMV chart.
Home-rule locals and other local bills can still appear in a real life closing. This page does not add a county percentage to the 7%. If a clerk quotes a local sales-tax extra on the hull, ask them to show the DOR watercraft rule that supports it.
Example: Same $20,000 private boat in two counties
Scenario: Bill of sale $20,000. One buyer registers in a large county. One registers in a small county.
The 7% line should match. The excise line matches the boat’s class and age, not a county sales-tax overlay.
Example: Do not copy a county CAGIT or food-tax habit onto a boat
Scenario: A $15,000 dealer boat. The buyer adds a remembered 1% county rate “because everything is 8% here.”
If the invoice shows only 7% plus BMV excise and registration, that is the Bulletin #28WC pattern.
- Bulletin #28WC — state 7%; no county sales-tax layer on watercraft sales
- BMV statewide excise schedule
BMV registration, title, excise, and $12 storage
The BMV registers boats that need numbering. Non-motorized canoes, rowboats, and paddleboats are exempt from registration; sailboats are not in that exemption. Titles typically apply at 12 feet and up. Registration cost is a length fee plus an excise-class fee. Annual boat excise tax follows the BMV class-and-age table. This page does not print those table dollars because they sit on the BMV site and change with class and age. Open the fee page for your hull.
If the boat is in storage under a qualifying contract, excise is a flat $12 and the BMV issues no decals. That $12 is not a substitute for 7% sales or use tax on a purchase. AIS stamps and other add-ons may apply; ask BMV whether an AIS stamp is due on your application rather than assuming a dollar.
Example: Stored boat with a contract versus a boat you will run
Scenario A: Qualifying storage contract, you will not put decals on this year. Scenario B: Same hull will be on the water; you need registration and excise.
Do not pay $12 and assume the 7% went away. Do not pay 7% and assume excise went away.
Example: 10-foot jon boat versus a 14-foot sailboat
Scenario: Two private purchases at $3,000 each. One is a non-motorized jon boat (rowboat). One is a 14-foot sailboat.
Tax and numbering are different switches. A registration exemption does not zero the 7%.
- BMV Boat Registration
- BMV Boat Fees and Taxes (storage $12; class/age; length)
Gifts, military, out-of-state credit, and documented vessels
A gift, family transfer, or inheritance is exempt from the 7% only when an ST-108E reason applies. Indiana does not publish a blanket “immediate family = $0” wipe in the materials used for this guide. If ST-108E lists your reason, tax can be $0; if it does not, budget 7% on consideration. Title and registration fees may still apply. Military buyers do not get a blanket boat exemption. Use ST-108E listed reasons only — ask DOR or the BMV which codes exist on the current form.
New residents bringing a boat in get a credit for sales or use tax correctly paid to another state, capped at the Indiana 7% liability. Documented vessels still pay use tax at the BMV. Resale and government exemptions need the proper certificates; this page does not auto-zero those without the form.
Example: Family “gift” without an ST-108E reason
Scenario: A parent transfers a $20,000 boat to an adult child. No ST-108E reason is completed. The child titles at the BMV.
Bring the form, not a rumor from another state that lists cousins or parents as automatic casual exemptions.
Example: Military buyer using ST-108E versus assuming $0
Scenario: A service member stationed in Indiana buys a $20,000 boat to keep on a local lake. No ST-108E reason is on the paperwork.
Orders alone do not replace ST-108E. Read the current exemption reasons on the form.
- Bulletin #28WC; ST-108 / ST-108E paths
- BMV boat registration (who must register)
How to calculate the tax you will owe
- Start with selling price. Subtract dealer discounts and manufacturer price reductions. Subtract a like-kind watercraft trade-in only. Leave manufacturer rebates in.
- Multiply by 7%. No county sales-tax add-on.
- Subtract other-state sales or use tax actually paid, not more than the Indiana 7%.
- Apply $0 only for a completed ST-108E reason.
- Add BMV length fee, excise-class fee, and annual excise from the live tables — or $12 storage with proof and no decals.
Example: Walkthrough of the $12,000 dealer invoice
Scenario: $12,000, $500 dealer discount, $4,000 like-kind boat trade, $1,000 rebate, Indiana resident, will register (not storage).
The number you compare to another dealer should keep rebate treatment identical.
Example: Walkthrough of an import with partial credit
Scenario: $15,000 boat, $800 other-state tax, Indiana BMV title, on the water this year.
Bring the other-state receipt. The BMV applies the credit against the 7%, not against next year’s excise.
- Bulletin #28WC; BMV Boat Fees and Taxes
What this page does not estimate
This page estimates the 7% sales or use tax from Bulletin #28WC, including the worked $525, $1,400, and $250 figures. It names the $12 storage excise. It does not print BMV length-band or MSRP-class/age excise dollars. It does not assign an AIS stamp amount. It does not auto-zero gifts, inheritances, or military purchases. It does not skip use tax on documented vessels. It does not treat a trailer or a PWC as a like-kind trade for a boat. It does not add a county sales-tax percent to 7%.
Example: Why this page will not quote your annual excise
Scenario: You know the boat’s MSRP class and age from the BMV chart but this article does not reproduce that chart.
Write the 7% check for tax. Write the second check after you read the table for that hull.
Example: Trailer line still separate
Scenario: Dealer invoice $20,000 boat plus $4,000 trailer. Like-kind boat trade $0.
Ask BMV how the trailer titles. Do not roll it into the hull’s 7% as a trade-in.
Two complete buying examples
Complete example 1: Private lake boat at $20,000
Scenario: Indiana resident, neighbor sale, $20,000, 18-foot outboard, no trade, no ST-108E, will use the boat this season (not storage).
Walk into the BMV with the bill of sale and $1,400 in the tax column of your worksheet, plus whatever the fee page shows for that length and class.
Complete example 2: Dealer like-kind close, then a stored hull
Scenario A: The $12,000 / $500 / $4,000 / $1,000 rebate dealer math. Scenario B: You later keep a different boat in qualifying storage.
Scenario A is why rebates and like-kind rules matter at the dealer. Scenario B is why excise has a storage fork that sales tax does not.
Common questions
Is Indiana boat tax 7%?
Sales and use tax is 7% with no county sales-tax add-on. Annual boat excise is extra, from the BMV class-and-age table.
Does a manufacturer rebate lower the 7%?
No. Dealer discounts and manufacturer price reductions do. Rebates do not.
Can I trade my trailer to cut boat tax?
No. Boat-trailer is not like-kind. Boat-PWC is not like-kind.
Is a private sale tax-free?
No. Expect 7% use tax at the BMV unless ST-108E applies.
Does Coast Guard documentation skip Indiana tax?
No. Use tax is still due at the BMV.
What is the $12 charge?
Flat storage excise when you have qualifying proof of storage and you are not getting decals. It is not the 7% purchase tax.
Example: $40,000 dealer boat, no trade
Scenario: Indiana dealer, $40,000, no discount, no like-kind trade, no rebate, ST-108.
Same 7% a private buyer would pay on a $40,000 bill of sale ($2,800 use tax), collected in a different window.
Example: Credit larger than Indiana tax
Scenario: $15,000 boat. Other-state tax paid $1,200. Indiana 7% is $1,050.
The credit stops at Indiana’s 7%. It does not turn into cash back on this page.
Before you sign
- Compute 7% after dealer discounts and like-kind boat-for-boat trades only.
- Leave manufacturer rebates in the base.
- Do not net a trailer or a PWC against a boat.
- Private buyers should plan on $1,400 per $20,000 at the BMV, not $0.
- Gifts and military claims need an ST-108E reason, not a family rumor.
- Documented boats still pay use tax.
- Open the BMV class/age and length tables for excise and registration. Use $12 only for qualifying storage.
- Keep sales/use and annual excise on two lines so quotes stay comparable.
Official references
- DOR Sales Tax Information Bulletin #28WC (May 2026) — watercraft and trailers; trade-in; OOS; documented vessels
- BMV — Boat Fees and Taxes — registration, excise tables, storage $12
- BMV — Boat Registration — who must register; exemptions
- IC 6-2.5-2-2 — 7% rate
This page estimates Indiana 7% boat sales and use tax and names the $12 storage excise. The Indiana Department of Revenue sets sales and use tax. The Bureau of Motor Vehicles collects use tax at title and registration and sets registration, title, and annual boat excise amounts on its published tables.