It is possible that nearly one in 10 boats plying Kansas lakes and waterways is actually registered in other states, the Kansas Department of Wildlife, Parks and Tourism reports.
State officials believe this is due in part to how the Sunflower State taxes watercraft. So, to help boat owners and to capture some of this lost revenue, they are considering some changes to the tax structure.
On Nov. 6, Kansans will have an opportunity to vote on a constitutional amendment that would allow the Legislature to change the way watercraft are taxed, said Barton County Treasurer Kevin Wondra. The amendment would allow lawmakers – after January 2013 – to classify and tax watercraft on a basis different from other property.
“The vote doesn’t affect local boat owners at all right now; that would depend on what changes the Legislature might make down the road,” Wondra said. It is merely the first step before lawmakers can make any alterations.
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 would not allow the change.
One possibility, should the amendment pass, would be for the Legislature to change the formula to lower taxes. This might help reduce this hemorrhaging.
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, Wondra said. 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, oars or sail (including canoes and jet skis) must be registered with KDWPT. Registrations and renewals cost $32.50, and are valid for three years.
But, according to the Barton County Appraiser’s Office, registering a watercraft isn’t the same as paying county property taxes on it. KDWPT sends its list of registered watercraft to county appraisers.
A boat owner must also register their boat with their local appraiser’s office, which then forwards the information to the treasurer. The treasurer then sends out the tax statements.
It is uncertain, county officials said, just how many boats are in Barton County. The appraiser is in the process now of sending out notices to boat owners on county rolls.
To lower their property tax burden, an estimated 10,000 Kansans register (and often store) their boats in other states, information from KDWPT notes. 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 the department.
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, said Robin Jennison, KDWPT secretary. There are about 85,000 watercraft listed 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 promoting safety, law enforcement, promotion and facility development.
“Property taxes on watercraft in Kansas are so high that they impede boat ownership, limiting families’ opportunity for wholesome water recreation,” Jennison said. He addressed his support of the measure in an open letter to state media.
“The Legislature showed bipartisan, overwhelming support – 121 to 2 in the House and 40 to 0 in the Senate – for placing this amendment on the ballot,” he said. However, the amendment may be difficult to understand because the ballot includes the entire article of the constitution that is affected, not just the change.
The only change is the addition of the words “and watercraft,” Jennison said. “Adding just those two words will give the legislature the opportunity to create a fairer tax treatment of watercraft.”
Boating registration information is available on the KDWPT website at ksoutdoors.com/Boating.