Could a licensed fishing-party boat qualify for the watercraft exemption without the operator holding a separate commercial-fisher license?

Plain-English summary

California asked whether an operator licensed for fishing-party-boat operations also needed a commercial-fisher license to claim the watercraft exemption.

The Board treated carrying sportfishers for hire outside California territorial waters as a commercial deep-sea fishing operation. The boat and property becoming its components could therefore qualify even though the operator was not separately licensed as a commercial fisher.

The operational test still mattered: the boat had to be used for that qualifying purpose more than 50 percent of the time outside California territorial waters.

What this means for you

Charter-boat operators, marine suppliers, and tax advisers

Licensing labels were not decisive in this opinion. Keep trip and usage records showing how often the vessel actually carried fishing parties for hire outside state waters.

Common questions

Q: Was a separate commercial-fisher license required?

A: No, under the 1959 opinion.

Q: Did carrying sportfishers for hire count as commercial fishing?

A: Yes, when the operation occurred outside California territorial waters.

Q: What usage threshold applied?

A: More than 50 percent of the boat's actual use for that qualifying purpose had to occur outside state waters.

Citations and references

• California Revenue and Taxation Code § 6368
• California Fish and Game Code §§ 7850 and 7920, as cited in the source
• California Sales and Use Tax Ruling 51.5, as cited in the source

Source

• Annotated Legal Opinions collection: CDTFA Annotated Legal Opinions
• Annotation page: Annotation 600.0160
• Original supporting opinion: 600.0160 PDF

Original ruling text

600.0160

Sacramento
October 26, 1959
Mr.

The question has arisen as to whether persons licensed as Fishing Party Boat Operators under Section 7920 of the Fish and Game Code are required to hold commercial licenses , under Section 7850 of the Fish and Game Code in order to qualify for the Watercraft Exemption provided in Section 6368 of the Sales and Use Tax Law and Ruling 51.5.
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Under Section 6368 and Ruling 51.5 the gross receipts from the sale of watercraft for use in commercial deep sea fishing operations outside the territorial waters of this State, and tangible personal property becoming a component part thereof, are exempt from sales tax. Sales of watercraft and components to persons actually engaged in taking fish for profit and licensed as commercial fishermen under Section 7850 ot' the Fish and Game Code, come within the exemption.

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It is our understanding that owners of boats licensed under Section 7920 of the Fish and Game Code, for fishing party operations, are not required to be licensed under Section 7850.

The Board has determined that the use of watercraft for carrying sport fishermen for hire outside the territorial waters of this State for sportfishing, constitutes a commercial deep sea fishing operation. Therefore, sales of watercraft and property becoming a component part thereof for such use are within the terms of the Watercraft Exemption, notwithstanding the fact that the operators are not licensed under Section 7850 of the Fish and Game Code. Since fishing party boat operators are engaged in commercial fishing operations when they take out fishing parties for hire, they are entitled to elaim the exemption provided in Section 6359b368 and Ruling 51.5, if the boats are actually used for such purpose more than 50% of the time outside the territorial waters of this State.
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