Maryland does not apply its general sales tax on boats. Instead, the state charges a 5% vessel excise tax on the fair market value of any boat titled in Maryland or used primarily on Maryland waters. The tax is capped at $16,000 through June 30, 2026, and rises to $16,100 on July 1, 2026, with the ceiling climbing by $100 every July 1 after that. The Department of Natural Resources collects it, not the Comptroller.
How the Taxable Value Is Calculated
The 5% applies to fair market value, and how that value is set depends on who you’re buying from.1Maryland General Assembly. Maryland Code Natural Resources 8-716
Buying From a Licensed Dealer
The taxable value is the total purchase price certified by the dealer. That figure includes the boat, any motors purchased at the same time, sails, spars, and accessories. It does not include the trailer. If you trade in another vessel, the dealer’s trade-in allowance reduces the taxable amount, though the credit cannot exceed the value listed in the national used-vessel pricing guide the Department has adopted.
Buying From a Private Seller
If you hand over a certified bill of sale showing the actual price paid, the Department uses that number. Without one, the Department falls back on its adopted pricing guide. Either way, the taxable value cannot drop below $100, and the minimum tax owed is $5.2Library of Maryland Regulations. COMAR 08.04.10.02 – Taxable Value of Vessels The trade-in deduction is only available through licensed dealers, so a private buyer pays tax on the full price with no offset for a vessel sold separately.
Trailers and Later-Purchased Motors
Trailers are carved out of the vessel tax entirely and are titled and taxed instead through the Motor Vehicle Administration. A motor bought at the same time as the boat is folded into the excise calculation. A motor bought later, on its own, falls outside the vessel transaction and is subject to the state’s regular 6% sales and use tax.
Bringing a Boat From Another State: The 90-Day Rule
You can keep a boat registered elsewhere in Maryland waters for up to 90 days per calendar year without owing the excise tax.3Legal Information Institute. Maryland Code of Regulations 08.04.10.02 – Taxable Value of Vessels Cross that line and the state treats the boat as principally used in Maryland, and the full 5% is due.
There is one exception. Even past 90 days, no tax is owed if the vessel spends a greater portion of the year in a single other jurisdiction. If you split time between Maryland and, say, Florida, keep careful logs. The burden of proving principal use elsewhere sits with the owner.
Exemptions
Immediate Family Transfers
Transferring a titled Maryland vessel between immediate family members owes no excise tax, not even the $5 minimum.4Maryland Department of Natural Resources. Certification of Family Transfer The definition is broader than most people expect: spouses, parents, children, siblings, grandparents, grandchildren, in-laws (mother-, father-, son-, and daughter-in-law), half-siblings, stepparents, stepchildren, and relationships created by adoption. The boat has to already be titled in Maryland, or, if it came from out of state, previously titled here by the family member transferring it.
Other Exempt Transactions
The statute also exempts:1Maryland General Assembly. Maryland Code Natural Resources 8-716
- Vessels transferred to a licensed dealer for resale, rental, or leasing (tax is deferred until the end buyer).
- Purchases by the State of Maryland or any political subdivision.
- Purchases by nonprofit organizations approved by the Secretary of Natural Resources.
- Vessels that spend 90 days or fewer in state waters, or that are principally used in another single jurisdiction.
Credit for Taxes Paid to Another State
If you already paid a sales or excise tax on the boat in another state, Maryland allows a credit against the excise tax owed here. The credit is not automatic. You need a validated receipt proving the other state’s tax was paid, and that state must offer an equivalent credit or exemption for Maryland’s excise tax.5Maryland Department of Natural Resources. Boat Registration If the other state’s rate was lower than 5%, you owe the difference. Equal or higher, you owe nothing.
Watercraft That Aren’t Taxed at All
Not every watercraft counts as a “vessel” under the State Boat Act. The statute excludes lifeboats, boats propelled only by sail, and manually propelled craft like canoes, kayaks, and rowboats.1Maryland General Assembly. Maryland Code Natural Resources 8-716 A pure sailboat with no auxiliary motor is outside the excise tax. Bolt on a small outboard and it becomes taxable.
Deadline and Late Penalties
You have 30 days from the date the tax liability arises to pay. After that, two charges start running: a flat 10% penalty on the excise tax owed, plus 1.5% interest per month (or any fraction of a month) from the due date until you pay.5Maryland Department of Natural Resources. Boat Registration On a $10,000 tax bill, day 31 brings a $1,000 penalty and $150 of interest, and the interest keeps compounding monthly.
Other Fees Due at Titling and Registration
The excise tax is the largest number, but several fixed fees also apply. As of October 2025:5Maryland Department of Natural Resources. Boat Registration
- Title fee: $20 for an original, transfer, duplicate, or corrected certificate of title.
- Registration fee: $70 for all vessels regardless of length or horsepower, valid through December 31 of the year after issuance.
- Documented vessel decal: $70, required for USCG-documented boats in place of state registration.
- Security interest filing: $15 if a lien is recorded on the title.
- Nonmotorized vessel decal: $12, voluntary, valid for two calendar years.
Federal documentation through the U.S. Coast Guard does not replace the excise tax. A documented vessel principally used on Maryland waters still owes the 5% and needs the $70 documented-vessel use decal instead of state registration numbers.