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What are sightseeing day trips?
Day trips for sightseeing purposes are sightseeing trips for educational, instructional, or recreational purposes that last less than twenty-four hours. Examples of day trips for sightseeing purposes include wine tours, scenic tours, culinary tours, educational or nature-related tours, or cultural tours.
Please see the department issued Excise Tax Advisory (ETA) 3212.2019 for more specific details regarding day trips for sightseeing purposes.
How are day trips for sightseeing purposes taxed?
In general, a sale of a day trip for sightseeing purposes to a consumer is considered a retail sale (ETA 3212.2019, RCW 82.04.050.) When a trip provider sells a day trip for sightseeing purposes for resale, then the trip provider is making a wholesale sale subject to documentation requirements in WAC 458-20-102.
Day trips that take place on waterways
Day trips for sightseeing purposes includes sightseeing cruises that last less than twenty-four hours.
Example 1. Lake Washington Sights Co. sells sightseeing yacht trips lasting four hours on Lake Washington, starting from and returning to the same point in Seattle. These cruises are day trips for sightseeing purposes and are subject to the retail sales and retailing business and occupation (B&O) taxes.
During the cruise, Lake Washington Sights Co. may also sell drinks at a no-host bar. Separate retail sales made to the passengers while they are on the sightseeing day cruises, such as drinks, meals, or souvenirs, are also subject to the retail sales and retailing B&O taxes.
Cruise packages
Special event cruise packages
A sale may combine a day trip sightseeing cruise with other goods or services. In general, this does not change the retail treatment of the day trip sightseeing cruise. When a day trip sightseeing cruise and other products are sold for one non-itemized price, this may be a bundled transaction subject to retail sales tax and retailing B&O tax. For additional information on bundled transactions, see RCW 82.08.190 and RCW 82.08.195.
Example 2. PNW Cruises offers four-hour Lake Washington cruises. For the 4th of July weekend, it sells a special evening cruise package that includes a barbeque dinner and refreshments for one non-itemized price. The entire charge is subject to retail sales tax and retailing B&O tax as a bundled transaction.
Private event cruise packages
Package cruises may include private event cruises.
Example 3. PNW Cruises offers corporate event cruise packages on Lake Chelan that include the four-hour day trip sightseeing cruise, a private meeting room and catered meals, for one non-itemized price. The entire charge is subject to retail sales tax and retailing B&O tax as a bundled transaction.
Other private event cruise packages may include wedding cruise packages consisting of a private deck for the wedding ceremony and the reception, with catered food, drinks, music and the four-hour day trip sightseeing cruise as a part of entertainment.
Private event on a vessel (not a package purchase)
Some private events may take place on a cruise where the vessel is used as a venue for the private non-sightseeing event. The seller may offer these cruises for weddings, funerals or meetings, where the primary purpose of the private event is clearly something other than sightseeing. In such cases, the separately stated charge for the use of the vessel is subject to B&O tax under the appropriate classification for the private event, such as the service and other activities classification.
Example 4. Return to the Sea LLC offers burial at sea services whereby the Captain and crew will assist with the service, and provide a memorial certificate. In this case, the private event is using the vessel as a venue, where the service, and not sightseeing is the primary purpose. The charge for the burial at sea service is subject to service & other B&O tax.
Example 5. Same as example 4, except the cruise also includes a post-event reception. If the burial at sea service and the reception are separately itemized, then they are each taxed according to the appropriate tax classification, the burial at sea service subject to the service & other B&O tax, and the reception subject to the retailing B&O and retail sales tax. If the burial at sea service and the reception are sold under one non-itemized price, then the entire charge is generally subject to retail sales tax and retailing B&O tax as a bundled transaction.
Example 6. Weddings on the Lake, LLC holds weddings on its yacht on Lake Chelan in the summer. It advertises these lake cruises as a great location for a wedding. If sold as a venue for a wedding alone, it would be subject to the Service B&O tax. As in example 5 above, if the wedding cruise is bundled with retail items and services, such as catered dinners and drinks, the entire charge would be subject to the retail tax.
Other private event cruises
Day cruises are presumptively a retailing activity. If a seller of day cruises is uncertain as to the proper tax classification for a special type of cruise not addressed in this notice, it can request a binding ruling.
Surcharges
Cruise businesses may include a surcharge to their passengers for vessel fuel or port usage. These charges are costs or expenses of the seller, and are taxable in the same manner as the cruise. For example, fuel or port charges added to a sightseeing day cruise would be subject to the retail sales tax and retailing B&O tax, the same as the charge for the sightseeing day cruise, even if these extra charges are stated separately on the passenger’s bill or invoice.
Other boating related business activities
The Department of Revenue’s website has additional information on the taxation of other watercraft business activities including:
- the charter boat industry
- fishing, including charters
- public utility tax and watercraft transportation
- travel agents and tour operators
