Michigan taxes watercraft at a flat 6%. A Michigan watercraft dealer collects sales tax and remits it to Treasury. A private or out-of-state purchase is 6% use tax at the Secretary of State unless an exemption or credit applies. On a $23,500 dealer boat with an $8,000 titled watercraft trade-in, tax is $930. A 22-foot inboard then adds a $5 title and $115 for a three-year registration in the 21-to-under-28-foot row. There is no county boat sales-tax overlay. Confirm current fees on the SOS watercraft page and use-tax rules with Treasury before you pay.
- How much is boat sales tax and registration in Michigan?
- The tax rule: 6% sales or use, statewide
- Trade-in, dealer vs private
- No local overlay
- Title rules and SOS registration by type and length
- Family, gifts, out-of-state, documented vessels
- How to calculate Michigan boat tax
- What this page does not estimate
- Two complete buying examples
- FAQ
- Before you sign
How much is boat sales tax and registration in Michigan?
The 6% is the same number whether the boat is new or used. What changes is who collects it. A Michigan watercraft dealer, including a dealer brokering a used boat as the seller, remits sales tax to Treasury. You should see “Purchased from Michigan dealer” and a tax number on the registration application. Do not expect SOS to collect that dealer sales tax a second time. A private-party purchase is use tax at SOS unless you prove tax already paid or you qualify for a family exemption.
Registration lasts three years and expires March 31 of the third year. SOS publishes a chart by craft type and length, with separate columns for an original or three-year renewal, a transfer with two years left, and a transfer with one year left. This page uses the original / three-year renewal column unless you are in a mid-cycle transfer. Historic watercraft that are at least 30 years old and restricted in use pay one-third of the normal registration fee.
You must register most motorboats used on Michigan waters. SOS carves out boats 16 feet or less propelled only by oars or paddles that are not rental or commercial; nonmotorized canoes and kayaks that are not rental or commercial; rafts; surfboards; sailboards; and swim floats. A motorized canoe is not in that free group — it has its own $14 three-year row. Commercial hand-powered craft (except canoes) and commercial canoes/kayaks have their own rows too. Do not assume every canoe is free of numbering.
| Item | Official figure | Who bills it |
|---|---|---|
| Sales tax (Michigan watercraft dealer) | 6% | Dealer → Treasury |
| Use tax (private / out-of-state) | 6% | SOS at title/registration |
| Local boat sales-tax add-on | None | Statewide 6% |
| Watercraft title | $5 | SOS, when a MI title is required |
| Instant title | $5 additional | SOS |
| Registration term | 3 years (expires March 31 of third year) | SOS |
Example 1: Dealer $23,500 with $8,000 titled watercraft trade-in
Scenario: Michigan watercraft dealer. Price $23,500. Agreed value of a titled watercraft trade-in is $8,000, separately stated. This is the dealer-manual style example.
Nine hundred thirty dollars is 6% of the difference. Michigan does not cap that watercraft trade-in the way some auto trade-in rules phase out.
Example 2: Private $20,000 — use tax at SOS
Scenario: You buy from a private owner for $20,000. No family exemption. No proof of tax already paid.
The private path is 6% of the full price at SOS. A side sale of your old boat does not create a dealer trade-in exclusion.
- Michigan SOS — Recreational vehicles and watercraft (fees, title rules, 6% note)
- Michigan Treasury — Use Tax (6%; watercraft paid at SOS)
- SOS Watercraft Dealer Manual BFS-88 — dealer remits to Treasury; trade-in example
The tax rule: 6% sales or use, statewide
Michigan’s general sales and use tax statutes set 6% of sales price or purchase price. Dealers tax the full purchase price including accessories. There is no annual statewide boat luxury tax or personal-property tax in the SOS watercraft materials beyond the registration cycle. Equalization tax can interact with use tax on transfers; exemptions that apply to use tax generally apply there too (RAB 2018-5). This page estimates the 6% sales or use tax plus SOS title and registration. It does not add a separate luxury line.
Out-of-state purchases are use tax at registration, minus a credit for sales tax paid to another state. If you paid 5% elsewhere on a $30,000 boat, Michigan’s 6% is $1,800, the credit is $1,500, and net use tax is $300. If you already paid 6% or more, additional Michigan use tax can be $0. Keep the other state’s receipt.
A Coast Guard documented vessel still owes sales or use tax on a taxable purchase. Michigan does not require a state title for a documented boat, but Michigan registration is still required when the numbering rules apply. Certificate of Documentation is proof of ownership, not a tax holiday.
Example 1: Dealer $50,000, no trade
Scenario: Michigan dealer, $50,000, accessories already in the price, no watercraft trade-in.
Three thousand dollars is the tax line before SOS fees. Length changes registration, not the 6%.
Example 2: Out-of-state $30,000, 5% already paid
Scenario: You buy out of state for $30,000, pay $1,500 (5%) there, then title or register in Michigan.
The credit cannot turn Michigan into a refund mill on this page. It only offsets the 6% use tax, and only with proof Treasury and SOS accept.
- MCL 205.52 and 205.93 — 6% sales and use tax
- Treasury Use Tax page — credit for tax paid to another state
- SOS watercraft page — documented vessels still register; no MI title when USCG documented
Trade-in, dealer vs private
Michigan’s “tax on the difference” for watercraft is specific. The agreed value of a titled watercraft used as partial payment toward a new or used titled watercraft from a watercraft dealer is excluded from the sales price. There is no dollar cap on that watercraft trade-in. It must be separately stated. USCG-documented trades can qualify in the documented-to-title situations the dealer manual describes. Trading a car for a boat does not qualify. A lease or rental does not get the trade-in exclusion. A private-party purchase does not get it.
An 18-foot outboard often does not need a Michigan title (under 20 feet, no permanent inboard). If that old boat was never titled, it may not support the titled-watercraft trade-in exclusion unless you voluntarily titled it as the bulletin requires. Do not assume every trade at a dealer is automatically subtracted.
Example 1: Qualifying titled trade — uncapped
Scenario: Dealer price $23,500. Titled watercraft trade-in $8,000. Same official difference example.
If someone applies a motor-vehicle trade-in cap to this $8,000, they are using the wrong rule.
Example 2: 18-foot untitled outboard offered as a trade
Scenario: You buy a $23,500 titled boat from a dealer and try to trade an 18-foot outboard that was never titled. The bulletin requires a titled (or qualifying documented) watercraft trade.
Title status of the boat you are giving up is part of the tax math, not paperwork trivia.
- RAB 2022-17 — tax on the difference; titled watercraft; uncapped; not for leases
- BFS-88 — dealer trade-in example; brokers treated as sellers; documented trades
No local overlay
Michigan watercraft sales and use tax is a flat statewide 6%. SOS and Treasury do not add a county or city percentage on the vessel transaction. Detroit, Grand Rapids, and a Lake Michigan township all use 6% on the boat. A trailer you plate separately can have its own tax and fees; that is not a local boat-tax rate on the hull.
Example 1: Same $20,000 private boat, two Michigan counties
Scenario: Private $20,000 purchase, two different Michigan counties of use.
The county name does not change the 6% line.
Example 2: $50,000 dealer boat still 6% with no city extra
Scenario: Dealer $50,000, no trade, sold in any Michigan city.
Do not copy a local meals or lodging tax onto a boat bill of sale.
- SOS watercraft page and Treasury Use Tax — statewide 6%, no county add-on on the vessel
Title rules and SOS registration by type and length
Michigan title is required for watercraft 20 feet or longer, or any length with a permanently affixed inboard. Title fee is $5. Instant title is $5 more. USCG documented vessels do not take a Michigan title; they still register when numbering applies. An 18-foot outboard is often registration-only unless you title it voluntarily.
Registration fees below are SOS original / three-year renewal amounts. Transfers mid-cycle use smaller SOS amounts on the same chart. Nonresidents may use an out-of-state registered craft on Michigan waters up to 60 days; after that, Michigan registration is required if the boat is stored or anchored and used exclusively on Michigan waters beyond 60 days.
| Category | Original / 3-year |
|---|---|
| Non-motorized sailboats*; hand-powered over 16 ft (noncommercial canoes/kayaks exempt); commercial hand-powered except canoes | $9 |
| Non-motorized canoes/kayaks used commercially | $5 |
| Motorized canoes (all sizes) | $14 |
| Motorboats under 12 ft | $14 |
| Motorboats 12–under 16 ft | $17 |
| Motorboats 16–under 21 ft | $42 |
| Motorboats 21–under 28 ft | $115 |
| Motorboats 28–under 35 ft | $168 |
| Motorboats 35–under 42 ft | $244 |
| Motorboats 42–under 50 ft | $280 |
| Motorboats 50 ft and over | $448 |
| Pontoon (any size) | $23 |
| Commercial fishing (licensed; not sport trollers) | $15 |
| Passenger/freight licensed | $45 |
A pontoon uses the $23 row even if it is large. Do not drop a pontoon into the motorboat length rows. Historic restricted-use craft 30 years or older pay one-third of the normal fee. Ask SOS which row your hull is on if it could be called both a pontoon and a motorboat — use SOS’s category, not a guess.
Example 1: 22-foot inboard — title plus the $115 row
Scenario: 22-foot inboard (permanent inboard). Title required. Motorboat 21–under 28 feet. Purchase $20,000 private, 6% use tax.
The inboard is why title is required even if some 22-foot outboards might already be at the 20-foot title line anyway. The $115 is the three-year motorboat row, not a pontoon row.
Example 2: Pontoon, any size — $23 registration plus tax
Scenario: Pontoon purchase $20,000 from a Michigan dealer, no trade. Any length. Three-year registration.
The $23 pontoon fee is easy to miss if you only look at length. SOS wrote a separate row on purpose.
- Michigan SOS — Recreational vehicles and watercraft (fee chart, title thresholds, 60-day nonresident use, historic one-third fee)
Family, gifts, out-of-state, documented vessels
Treasury’s use-tax family list covers transfers between spouse, mother, father, brother, sister, child, stepparent, stepchild, stepbrother, stepsister, grandparent, grandchild, legal ward, or legally appointed guardian (with a certified letter where Treasury requires it). A 2014 law extended certain in-law exemptions to watercraft; RAB 2018-5 is the bulletin to read for which in-law facts qualify. If your relationship is on that Treasury list, use tax can be $0. If it is not, budget 6%. Registration and title fees can still apply.
Inheritance is not a separate SOS “estate = $0” watercraft tax line. Some heir transfers fit the family exemption. Others involve consideration and look like a purchase. Bring the bill of sale and court papers to SOS and Treasury. This page does not auto-zero an estate transfer that Treasury would tax. Military service is not a special $0 boat sales-tax rate on the SOS watercraft page. Nonresidents get up to 60 days on an out-of-state registration, then Michigan numbering if the storage and exclusive-use tests are met.
Example 1: Parent gifts a boat to a child
Scenario: Parent transfers a watercraft to a child. No purchase price. Relationship is on Treasury’s list.
The exemption is the relationship, not the word “gift” on a sticky note. Cousins and friends are not on that list.
Example 2: Documented boat — tax still 6%, no Michigan title
Scenario: Taxable $50,000 purchase of a USCG documented vessel, no family exemption, Michigan numbering required.
Skipping Michigan title is not skipping the $3,000. Bring the Certificate of Documentation to SOS when you register.
- Treasury Use Tax page and RAB 2018-5 — family and in-law use-tax exemptions
- SOS watercraft page — documented vessels, 60-day temporary use
How to calculate Michigan boat tax
Start with channel. Michigan watercraft dealer: 6% sales tax on price including accessories, minus a separately stated titled or qualifying documented watercraft trade-in, with no cap. Private: 6% use tax on price unless a listed family exemption applies. Out-of-state: 6% minus credit for tax paid to the other state. Then add SOS registration from the type and length chart (pontoon row if SOS classes it as a pontoon; one-third if historic restricted-use). Add $5 title if the boat is 20 feet or longer or has a permanently affixed inboard, and skip Michigan title if it is USCG documented. Add $5 more only if you buy an instant title. Dealers remit to Treasury; private buyers pay at SOS.
Walkthrough 1: Dealer 22-foot inboard, titled trade, August closing
Scenario: Dealer $23,500, titled watercraft trade $8,000, 22-foot inboard, three-year registration, standard title (not instant).
This stacks the official trade-in example with the official 22-foot inboard fee pair.
Walkthrough 2: Private 18-foot outboard, $20,000
Scenario: Private $20,000, 18-foot outboard, no permanent inboard, not family, Michigan resident.
The 18-foot outboard is the classic “register yes, title maybe not” file. Tax is still $1,200.
- RAB 2022-17 — dealer titled-watercraft difference
- SOS fee chart — $42, $115, $23 pontoon, $5 title
What this page does not estimate
This page does not apply auto trade-in caps to boats. It does not add a county boat sales tax. It does not collect dealer sales tax at SOS. It does not zero an estate transfer unless it fits Treasury’s family (or covered in-law) rules. It does not create a military $0 boat rate. It does not price a lease’s sales tax beyond noting that the trade-in exclusion does not apply. It does not pick a registration row when SOS could class the hull as either a pontoon or a motorboat — ask SOS. Trailer plates are a separate bill. Mid-cycle transfer fees ($6, $3, $9, and the rest of the SOS transfer columns) apply when you buy a boat that already has time left on a Michigan registration; use the SOS transfer column for that file rather than the original $ amounts on this page if you are not buying a fresh three-year term.
Example 1: Lease — no trade-in exclusion
Scenario: You lease a $50,000 watercraft and hope to subtract an $8,000 trade as if it were a sale.
The $930 figure on this page is a sale with a titled trade, not a lease.
Example 2: Estate transfer — do not assume $0
Scenario: An estate sells a boat to a non-relative for $20,000, or transfers to an heir who is not on Treasury’s family list.
Heirs who are children or spouses often fit the family exemption. A public estate sale does not.
Two complete buying examples
One dealer difference deal on a 22-foot inboard. One private 16-to-under-21-foot motorboat. Fees are the SOS original three-year column.
Complete example 1: Dealer 22-foot inboard with titled trade
Scenario: Michigan watercraft dealer. $23,500 price. $8,000 titled watercraft trade-in, separately stated. 22-foot inboard. Three-year registration. Standard $5 title. Not documented. Not family.
This is the BFS-88-style tax number plus the SOS 21-under-28-foot inboard extras.
Complete example 2: Private $20,000, 18-foot outboard
Scenario: Private party. $20,000. 18-foot outboard. No family exemption. Michigan resident. Fresh three-year registration. No Michigan title required on the 20-foot / inboard test.
You will pay more than the $42 sticker. The $1,200 use tax is the line people forget until SOS asks.
FAQ
How much is Michigan boat sales tax?
6% statewide. Dealers collect sales tax for Treasury. Private and many out-of-state purchases are use tax at SOS.
Does a trade-in lower Michigan boat tax?
Yes, when a watercraft dealer takes a titled (or qualifying documented) watercraft in trade, separately stated, toward another titled or documented watercraft. There is no dollar cap. Private sales, car-for-boat trades, and leases do not get that exclusion.
Is there local boat tax in Michigan?
Not on this 6% watercraft sales or use tax. No county add-on on the vessel.
How much is a Michigan boat title?
$5, plus $5 more for instant title. Title is required at 20 feet or longer, or any length with a permanently affixed inboard. Documented boats do not take a Michigan title.
How much is registration for a 22-foot motorboat?
$115 for a three-year original or renewal in the 21-to-under-28-foot motorboat row. A pontoon of any size is $23, not that motorboat row.
Do I pay tax on a family gift?
Use tax is exempt for transfers between the relatives Treasury lists (including listed step-relatives, grandparents, grandchildren, and certain guardians). Check RAB 2018-5 for in-law coverage. SOS fees can still apply.
Are documented boats exempt from Michigan tax?
No. Sales or use tax still applies on a taxable purchase. You skip Michigan title, not the 6%. You still register when numbering applies.
How long can a nonresident boat stay in Michigan?
An out-of-state registered craft may use Michigan waters up to 60 days. After that, register in Michigan if it is stored or anchored and used exclusively on Michigan waters beyond 60 days.
Before you sign
Write 6% of the taxable price — full price on a private deal, or price minus a qualifying titled watercraft trade at a dealer. Add the SOS row for your actual category (pontoon $23, 16-under-21 motorboat $42, 21-under-28 $115, and so on). Add $5 if Michigan title is required. If a dealer is collecting tax, that money goes to Treasury; SOS should not charge the same 6% again. If someone caps your boat trade-in like a car, or skips tax because the boat is documented, stop and read the SOS and Treasury pages.
- Michigan SOS — Recreational vehicles and watercraft — https://www.michigan.gov/sos/vehicle/recreational-vehicles-watercraft
- Michigan Treasury — Use Tax — https://www.michigan.gov/taxes/business-taxes/sales-use-tax/use-tax-1
- RAB 2022-17 — Tax on the Difference — https://www.michigan.gov/taxes/rep-legal/rab/2022-revenue-administrative-bulletins/revenue-administrative-bulletin-2022-17
- RAB 2018-5 — Family transfers — https://www.michigan.gov/taxes/rep-legal/rab/2018-revenue-administrative-bulletins/revenue-administrative-bulletin-2018-5
- SOS Watercraft Dealer Manual BFS-88 — https://www.michigan.gov/-/media/Project/Websites/sos/22lawensn/SOS_Watercraft_Dealer_Manual_BFS88.pdf
This page estimates Michigan’s 6% watercraft sales or use tax and published SOS title and registration fees. The Michigan Department of Treasury and the Michigan Secretary of State set the amount you pay.