On November 6, Kansans will have an opportunity to vote on a constitutional amendment that would allow the Kansas Legislature to change the way watercraft are taxed. For tax purposes, a watercraft is any boat powered by gasoline, diesel, electric, oars or sail, including sailboards, personal watercraft (jet skis), kayaks, and canoes.
The amendment would allow lawmakers – after January 2013 – to classify and tax watercraft on a basis different from other property. The amendment would not directly change how watercraft are taxed; rather, it is a required first step before legislators can make changes in the future.
A YES vote for the proposition would allow the legislature to separately classify and tax watercraft or to exempt watercraft from property taxes. A NO vote on the proposition would not change the way watercraft are taxed.
For county property tax purposes, watercraft are taxed using a formula that multiplies 30 percent of a vessel’s value by the county mill levy, resulting in a tax rate higher than in many other states. The watercraft tax formula is set by the Kansas constitution, which is why an amendment is necessary to allow lawmakers to consider classification and tax rate changes. Three neighboring states – Oklahoma, Nebraska and Missouri – do not have a property tax on watercraft, and neither do Texas and Iowa.
Watercraft powered by gasoline, diesel, electric, or sail must be registered with the Kansas Department of Wildlife, Parks and Tourism (KDWPT). Registrations and renewals cost $32.50 each, and are valid for three years from the registration date. Registering a watercraft isn’t the same as paying county property taxes on it; however, KDWPT annually sends the list of registered watercraft to county appraisers.
To lower their property tax burden, some owners unlawfully register their vessels in neighboring states. The only way county appraisers know if a resident owns a watercraft is for the owner to declare it for property tax purposes or through watercraft registration records provided by KDWPT. When owners go out of state to register their boats and avoid paying property taxes, the state loses registration revenue and the counties lose property tax revenue. An estimated 10,000 Kansas residents register their boats in other states to avoid paying higher property taxes in Kansas. There are about 85,000 watercraft registered with KDWPT.
KDWPT does not receive the property tax revenues. Each county is responsible for how it uses its portion of the property tax receipts. KDWPT uses registration revenues along with matching federal funds – the amount of which is determined by the number of registered watercraft – to support boating-related programs such as: developing, improving, and maintaining docks, boat ramps, toilet facilities; inspecting marinas; enforcing vessel operation, sanitation, sound muffling and boating under the influence laws; investigating boating accidents and marine thefts; officer training; search and rescue operations; administering boating education and water safety programs; publishing boating information; and appearing at fairs and boat shows.
Boating registration information is available on the KDWPT website at ksoutdoors.com/Boating
Image courtesy Kansas Department of Wildlife, Parks and Tourism