RBAW Member Communication
RBAW Member Communication
Member Communication
Hello RBAW Members,
Because we are moving closer to the June time-frame when Washington State vessel registration renewals are due, we wanted to remind you of the impact from a Depreciation Schedule update done by the state Department of Revenue (DOR) back in October 2021.
Under the revised schedule, which took effect January 1, 2022, some boat owners are likely to see an increase in their 2022 excise tax bill. Those most likely to see increases are sailboat owners who are now in their own category, as well as powerboats that have been owned for over 10 years.
Here is a link to the current DOR depreciation schedule so that you can see the rates DOR uses to calculate your Watercraft Excise Tax. It all pivots off the price at which you purchased your vessel – in the year you purchased your vessel.
And for a little clarification – this is unrelated to the attempted doubling of the excise tax rate that was proposed during the 2021 Session of the Washington State Legislature. Through advocacy work and an action campaign RBAW helped lead, that proposal ended up being removed from consideration.
History
In Summer 2021, DOR exercised statutory authority provided under RCW 82.49.040 (“the department of revenue shall prepare at least once each year a depreciation schedule for use in the determination of fair market value for the purposes of this chapter”) to update a Depreciation Schedule that had been unchanged since July 1, 2010. RBAW participated actively in the DOR’s public process for the Depreciation Schedule update, objecting to preliminary rule-makings and successfully getting adjustments to the schedule that resulted in much fairer depreciation percentages for vessels purchased over the last 10 years.
That said, RBAW felt strongly that the DOR’s rule-making for the depreciation of longer-held vessels (bought fourteen years or more ago) was disproportionately high and urged adjustments to the DOR’s model. When that did not occur, RBAW organized a petition by several organizations to challenge the new schedule and submitted supporting data that had been compiled pro bono by the firm of BTS Associates. DOR rejected the petition – though we will have the chance to remake our case later this year when the next Depreciation Schedule update process begins, see below for an update.
On Tuesday, April 12, DOR responded to an RBAW request and communicated the schedule for the next update of the Depreciation Schedule. The DOR’s plan is to begin rulemaking activities in late April/early May which will include public meetings on the draft rule occurring in late July or early August. Prior to those meetings, DOR will review the latest vessel sales and registration data from the DOL to determine whether adjustments to the depreciation schedule are necessary – and they will share that information with RBAW, and others. If any changes are proposed, the Department’s goal is to incorporate them into a revised, final rule in Fall 2022.
RBAW has a seat at the table for this update process and we and our partners will keep fighting for a Depreciation Schedule that we believe is fairer to recreational boaters.
Please feel free to reach out if you have any questions,
Thank you,
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