Fuel Tax Refunds Possible For Boaters

Boating Fuel Tax Refund

Fuel is one of the largest cost factors when fishing out of a boat.

When fuel prices go up, fewer fishermen hit the water, and the economic repercussions can be seen throughout the entire fishing industry.

Now, some relief is in sight.

Recreational boaters who purchase fuel for use in their boats may be eligible for a full or partial refund of the taxes paid on the fuel.

These fuel taxes are most often used to repair highway damage caused by the wear and tear of automobiles. Because boats do not cause this damage, many states apply the tax on marine fuel to boating programs through the Aquatic Resources Trust Fund. In states where the money is not applied to these programs, however, it is usually put into the highway improvement fund.

Now, a number of states—recognizing that it’s unfair to use boaters’ tax dollars for highway improvement— are offering refunds on marine fuel taxes. Procedures and qualifications vary by state, but typically, boaters will need to save their fuel receipts as well as complete some paperwork, which is often available online.

In Alaska, for example, highway gasoline is taxed at a rate of 8¢/gallon, while marine gas is taxed at 5¢/gallon. If a boater uses taxed highway gasoline for marine purposes, he or she can claim a refund for the 3¢ difference for gas purchased within the past year.

boating fuel tax refund

Some incentives are even larger. Virginia’s Department of Motor Vehicles provides a complete refund of the 17.5¢/gallon for gasoline and the 16¢/gallon for diesel purchased in Virginia when used in a recreational or pleasure boat or ship. Each receipt must be for at least five gallons, and the claim must be filed within 12 months from the date the fuel was purchased. Similarly, Texas will refund the state’s 20¢/gallon fuel tax while factoring in a 2% distributor’s tax.

California offers a similar refund on diesel fuel taxes if the fuel was used for nontaxable purposes, such as “a boat, ship, barge or other watercraft.”

To find out if you are eligible for tax refunds on marine fuel, look for more information on your state’s official government website or contact your representative.