Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2014
 

Sales and Use Tax Annotations


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W

600.0000 WATERCRAFT—Regulation 1594

Annotation 600.0120

(b) USE IN INTERSTATE OR FOREIGN COMMERCE

600.0120 Tugboat and Barge Operations.

1. Water-taxi used in transportation of pilots, longshoremen and ship crews from a point on shore to a vessel engaged in interstate or foreign commerce while operating on navigable water or vice versa.

Watercraft used for these purposes are not used in interstate or foreign commerce and are not, therefore, within the exempt category except in the case of watercraft transporting so-called harbor pilots to or from vessels, these pilots actually navigating or aiding in the navigation of the vessels in the completion or commencement of their voyages from or to a point outside this state.

2. Tugboats engaged in towing or assisting vessels principally used for the transportation of passengers or cargoes in interstate or foreign commerce.

This use, if in aid of the actual movement of vessels carrying cargo or passengers, qualifies the tugboats for the exemption.

3. Tugboats and barges engaged in the delivery of bunker fuel to vessels principally used for the transportation of passengers or cargoes in interstate or foreign commerce.

This use does not qualify the tugboats and barges for the exemption. The delivery of bunker fuel from a point in this state to vessels in this state is not a use in interstate or foreign commerce even if the vessels are engaged in interstate or foreign commerce.

4. Tugboats and barges engaged in transporting cargoes moving in interstate or foreign commerce.

This use qualifies the tugboats and barges for the exemption.

5. Tugboats and barges engaged in the delivery of ships' stores to vessels principally used for the transportation of passengers or cargoes in interstate or foreign commerce.

This use does not qualify the tugboats and barges for the exemption. As in the case of bunker fuel, the delivery of ships' stores from a point in this state to vessels in this state is not a use in interstate or foreign commerce.

6. All lifting, handling, assisting, loading and unloading cargo or property to or from vessels in interstate or foreign commerce.

This is a use qualifying the watercraft for exemption to the extent that the property involved constitutes cargo.

If the property carried is other than cargo, e.g., fuel, ships' stores, etc., the transportation of such property is not a use in interstate or foreign commerce.

7. All testing of booms, davits, lifeboats or other services rendered to certificate or otherwise assist vessels in interstate or foreign commerce to conform to maritime regulations.

This is not an exempt use of the watercraft, as it does not involve transportation in interstate or foreign commerce.

8. All aid, assistance, or salvage of distressed, stranded or sunken vessels in interstate or foreign commerce or commercial deep sea fishing boats. To the extent that watercraft are used in aiding a vessel to continue its movement to a point in this state from a point outside this state or vice versa, or the cargo of such vessel, the use is an exempt use in interstate or foreign commerce.

9. All services rendered to vessels in interstate or foreign commerce at dockside or in the stream, such as:

(1) Remove or replace and/or handle radar mast and antenna.

(2) Remove or replace and/or handle deck gear and equipment.

(3) Remove or replace and/or handle tail shafts, propellers and rudders.

(4) Remove, replace and/or handle any and all engine room equipment and machinery.

None of these services constitute a use in interstate or foreign commerce of watercraft transporting the workers or materials to or from the vessels.

The basic distinction running through all of the above answers is whether or not the use is in the transportation of either the vessel or its cargo or passengers in interstate or foreign commerce. The transportation of fuel, ships' stores, repair parts, and the like, to and from vessels is not a use in interstate or foreign commerce. We believe that these distinctions between what is considered a use in interstate and foreign commerce and a use other than in interstate or foreign commerce are in accordance with the law as determined by decisions of both Federal and State courts. 3/3/55.