Publication 40, Watercraft Industry
Appendix: Component Parts and Taxable Items for Exempt Watercraft

The following lists provide examples of taxable items and nontaxable component parts for exempt watercraft, as defined in previous sections. (The tax exemption for component parts does not apply to parts sold or purchased for vessels that do not qualify for one of the watercraft principal use exemptions.) The lists are intended as a guide and do not include all items you may sell or purchase for exempt watercraft. Categories are listed in alphabetical order.

Basic principles for determining taxability

Some items are taxable in one situation and nontaxable in another, depending on their use or method of attachment. If you have any questions regarding the application of the sale or purchase of a particular item, please contact our Customer Service Center at 1-800-400-7115 (TTY:711) for assistance.

Nontaxable component parts

Sales of items listed as nontaxable component parts (including their parts) are not taxable when the parts are substantially affixed or attached to an exempt watercraft (or to one of its affixed parts) when in use. The parts must become part of the watercraft when it is constructed, repaired, cleaned, altered, or improved. Sales of items purchased for inventory or future use are taxable.

Taxable items

Items listed as taxable are not affixed or attached to an exempt watercraft in a substantial manner when in use. Items that are consumed during normal application, such as solvents or soap, are also subject to tax.

Cleaning materials and gear

Taxable items

  • Acids
  • Ammonia, household
  • Baskets
  • Benzene
  • Bleaches
  • Bricks, grill and range
  • Brooms
  • Brushes
  • Buckets
  • Cans
  • Carpet sweepers, electric or hand
  • Caustic soda
  • Chipping hammers, power
  • Chloride of lime
  • Chore girls
  • Deodorants
  • Disinfectants
  • Drums
  • Dust pans
  • Emery cloth and powder
  • Handles for brooms or brushes
  • Holystones
  • Insecticides
  • Lye
  • Mops and swabs
  • Paint and varnish removers
  • Pails
  • Plumber’s friend (force cup)
  • Pumice stone
  • Rags and cheesecloth
  • Sal soda
  • Sand, scrubbing
  • Sandpaper
  • Sawdust
  • Soaps, solvents, detergents, cleansers
  • Sponges
  • Squeegees
  • Steel wool

Dry goods (miscellaneous)

Nontaxable component parts

  • Awnings
  • Dodgers
  • Filter cloth (used in or as component part of vessel)
  • Flags and pennants (operational only)
  • Hatch tarpaulins
  • Hatch tents (carried on vessel)
  • Sails
  • Signal balls
  • Material for making or repairing any of these items

Dunnage materials

Taxable items

  • Fabrics
  • Lumber (dunnage only)
  • Paper

Environmental and fire control equipment

Nontaxable component parts

  • Aqueous film forming foam (AFFF) systems
  • Carbon dioxide (CO2) systems (including CO2)
  • Fire hoses and nozzles
  • General alarm system
  • Oil spill booms
  • Steam smothering lines and system

Taxable items

  • Portable firefighting equipment, such as fire extinguishers, fire axes, protective clothing, and breathing apparatus.

Fishing gear

Nontaxable component parts

  • Similar types of fishing gear may be classified as nontaxable in one situation and taxable in another, depending on their use or method of attachment. Please contact our Customer Service Center if you are unsure whether an item is taxable.
  • Fishing nets normally attached to the vessel when in use and items that become part of the nets or are attached to them. Examples: drag nets, drift nets, lampara nets, and purse seine nets

Taxable items

  • Bait well nets
  • Crab gear
  • Fish baskets
  • Fish forks, spears, and darts
  • Fish hooks
  • Fishing nets set out on buoys or floats, and parts or attachments
  • Floats for buoying nets and lines
  • Gaff hooks
  • Ice tongs, shavers, and picks
  • Loading chutes
  • Lobster gear
  • Net needles
  • Portable bait tanks
  • Fish lures

Fuels, gases, lubricants, and compounds

Taxable items

  • Bunker fuel
  • Compounds—grinding, boiler, testing, and treating
  • Flux
  • Gases, acetylene
  • Gasoline
  • Glycerine
  • Graphite
  • Greases
  • Ink, instrument
  • Kerosene
  • Oil—cutting, lubricating, storm, fuel
  • Oxygen

Furniture, furnishings, and entertainment equipment

Nontaxable component parts

  • Athletic equipment (fixed)
  • Furniture and furniture parts: beds, benches, bunks, chairs, lockers, springs, stools, tables
  • Hospital and surgical equipment
  • Televisions and VCRs
  • Cassette and CD players
  • Radio receiving sets (household type)
  • Recreational equipment
  • Rugs, carpets, mats, drapes, blinds, curtains, licenses and certificate frames, notices, pictures, shades, signs

Taxable items

  • Athletic equipment (movable), such as medicine balls and horse-billiard sets
  • Bed springs (not affixed)
  • Books
  • Cameras
  • Cots
  • Deck chairs
  • Games, party gear, portable sports equipment, toys
  • Portable stereo, radio, and video equipment
  • Portable benches, chairs, divans, lamps, stands, stools, tables
  • Portable hospital and surgical equipment, including portable first aid kits
  • Stretchers and litters
  • Wheelchairs

Please note: Items that are usually moved from place to place in the watercraft, or stationary but not affixed to the vessel, are taxable.

Galley and stewards’ equipment

Nontaxable component parts

  • Coffee urns
  • Dishwashing machinery
  • Griddles
  • Mixing, grinding, and slicing equipment
  • Ovens
  • Steam kettles
  • Steam tables
  • Stoves
  • Toasters

Taxable items

  • Appliances (portable)
  • Bath mats
  • Bed sheets, spreads, and blankets
  • Chinaware
  • Crockery
  • Crocks, bowls, bottles
  • Electric irons
  • Galley knives, forks, and spoons
  • Glassware
  • Laundry bags
  • Lining paper
  • Matches
  • Mattresses and covers
  • Metalware
  • Mixing and grinding machines (portable)
  • Napkins
  • Paper bags, towels, napkins, cups
  • Percolators/coffee makers (portable)
  • Pillows and pillowcases
  • Pots and pans
  • Steamtable inserts
  • Tablecloths
  • Table knives, forks, and spoons
  • Toasters (portable)
  • Toilet paper
  • Toothpicks
  • Towels
  • Uniforms

Ground tackle and mooring equipment

Nontaxable component parts

  • Anchors
  • Anchor chains, links, and shackles
  • Bumpers or fenders
  • Chocks
  • Cleats
  • Mooring lines—chain, wire, fiber

Hardware and accessories

Nontaxable component parts

  • Bolts
  • Brads
  • Glass—window, port
  • Joiners hardware
  • Metal rods, sheets, rolls, bars, shapes
  • Nails
  • Nuts
  • Padlocks
  • Pins
  • Rivets
  • Screws
  • Spikes
  • Staples
  • Tacks
  • Washers
  • Wire cloth
  • Wire screen

Lifesaving equipment

Nontaxable component parts

  • Lifeboats and equipment (first aid kits, water containers, flashlights, and so on)
  • Life rafts and equipment

Taxable items

  • Portable lifesaving equipment such as ring buoys, life jackets, distress signals, flares, and rockets, when not part of a lifeboat or life raft.

Nontaxable component parts

  • Batteries
  • Electric wire and cable
  • Lanterns—if affixed
  • Lights—if affixed

Taxable items

  • Lights and lanterns used intermittently at various locations and for various purposes in the ship, such as flashlights, battle lanterns, oil lamps, and portable electric lights with extension cords.

Lumber and lumber products

Nontaxable component parts

  • Hatch boards
  • Plugs
  • Scupper splash boards
  • Sign boards

Taxable items

  • Lumber used for dunnage and other temporary, nonaffixed uses

Nontaxable component parts

  • Boilers
  • Capstan and warping engine
  • Cargo winches
  • Compressors
  • Condensers
  • Davits and lifeboat winches
  • Firebrick, boiler cement, firebrick facing (example: chrome ore)
  • Generators
  • Temperature control systems and equipment
  • Lighting systems and equipment
  • Main engine
  • Motors
  • Pipe and plumbing fittings
  • Propellers
  • Pumps
  • Refrigeration equipment (including refrigerants)
  • Sanitary systems and equipment
  • Steering engine
  • Tail shaft and shafting
  • Topping lift winches valves
  • Ventilating systems and equipment
  • Windlasses

Machine shop equipment, tools, and miscellaneous equipment

Nontaxable component parts

  • Anvils
  • Drill presses
  • Grinders
  • Lathes
  • Shapers
  • Vises

Taxable items

  • Adzes
  • Awls
  • Axes
  • Bars—boring, chisel, claw, crimping, pinch, punch, slice, wrecking
  • Bellows (portable)
  • Bevels
  • Bits for portable drills
  • Blades—knife and saw
  • Blowtorches
  • Boiler testing apparatus
  • Braziers
  • Brushes, paint
  • Calipers
  • Chain, measuring
  • Chisels—cold, pneumatic, wood
  • Clamps, wood
  • Cutters—bolt, boiler tube, cable, gasket (portable), glass, pipe, wire
  • Detectors, leak
  • Die nuts
  • Dies—pipe and bolt
  • Dividers
  • Drills (portable)
  • Fids—metal and wood
  • Figures, steel stamping
  • Files
  • Forklift trucks
  • Funnels
  • Gauges—depth, thickness, and so on
  • Gloves—leather, rubber
  • Goggles—chipping, welding
  • Guns—air, grease, oil, soot remover, paint spray
  • Hammers, pneumatic
  • Handles—composition, metal, wood
  • Hatchets
  • Hoists (portable)
  • Hooks, hand
  • Irons, caulking
  • Irons, soldering
  • Jacks
  • Keys, door and lock
  • Knives—drawer, jack, linoleum, putty
  • Ladders, step
  • Levels
  • Machines, deck scrubbing and polishing
  • Mallets
  • Measure—bulk, liquid
  • Meters (portable)
  • Needles
  • Oil cans
  • Packing tools
  • Palms, leather
  • Picks
  • Pitch payers
  • Planes
  • Pliers
  • Plumb bob
  • Pots—babbitt, glue, melting
  • Prickers, sail makers
  • Pump, barrel (portable)
  • Punches—arch, center, and so on (portable)
  • Ratchet, drilling
  • Reamers
  • Rules—folding, steel, tape
  • Saw frames
  • Saws
  • Scales—spring balance, platform (portable)
  • Scissors
  • Scoops
  • Scrapers
  • Screw drivers
  • Shears
  • Shovels
  • Snake, plumber’s
  • Snips
  • Sounding rod
  • Squares
  • Stencils
  • Straddle carriers
  • Surgical instruments
  • Tap and die sets
  • Tape, masking
  • Tape, measuring
  • Tightener, chain
  • Tongs, blacksmith
  • Tool kit
  • Traps, rat and rodent
  • Trowel
  • Welding set (portable)
  • Wrenches

Miscellaneous

Nontaxable component parts

  • Belting
  • Cargo nets and slings
  • Caulking materials
  • Cement
  • Container lift spreader
  • Flexible ladders
  • Gangways, accommodation ladders
  • Gaskets
  • Glue
  • Insulation material
  • Packing
  • Putty, plastic wood
  • Save-alls (nets)
  • Sealing compounds
  • Solder
  • Tapes—friction, linen, pipe wrapping, rubber

Taxable items

  • Alcohol
  • Dryers
  • Thinners
  • Turpentine

Nontaxable component parts

  • Barometers
  • Buzzer signal systems
  • Clocks
  • Compasses
  • Computerized navigation aids
  • Fluids for gauges or instruments
  • Gauges
  • GPS—global positioning systems
  • Gyrocompasses
  • Indicators
  • Loran
  • Meters
  • Phone systems, cellular phones
  • Public address systems
  • Radar
  • Radios
  • Radio direction finder
  • Recording instruments
  • Satellite communication systems, INMARSAT
  • Sounding machines (automatic or manual)
  • Taffrail logs
  • Thermometers

Taxable items

  • Ammunition
  • Battery acid
  • Binoculars
  • Blinkers (portable)
  • Books
  • Bosun’s chairs
  • Chart reading glasses
  • Charts
  • Chronometers
  • Distilled battery water
  • Dividers
  • Firearms
  • Flags, decorative and house
  • Fluorescent tubes
  • Handcuffs
  • Horns, hand (portable)
  • Light bulbs
  • Maps
  • Megaphones
  • Powder charges for line throwing guns
  • Radios—portable, hand
  • Rat guards
  • Rulers, parallel
  • Rules
  • Safety belts
  • Sailing directions
  • Sextants
  • Signal rockets and flares
  • Stop watches
  • Tide tables
  • Typewriters (portable)

Office supplies

Taxable items

  • Blotters
  • Books—composition, memo
  • Calculators (portable)
  • Crayons
  • Carbon paper
  • Chalk
  • Computers
  • Envelopes
  • Erasers
  • Ink, ink eradicator
  • Paper
  • Paper clips
  • Pencils
  • Pen points
  • Printers
  • Printing supplies
  • Rubber bands
  • Rulers
  • Scotch tape
  • Staple removers
  • Staplers
  • Staples
  • Stamp pads
  • Stamp, rubber
  • Stencils
  • Thumb tacks

Running gear, rigging, rigging fittings, and lashing equipment

Nontaxable component parts

  • Batten bars
  • Battens
  • Blocks
  • Booms
  • Chain
  • Clamps
  • Fiber rope and lines
  • Hooks
  • Links and rings
  • Masts
  • Pulleys
  • Shackles
  • Spars
  • Thimbles (eyes for rope or wire ends)
  • Turnbuckles
  • Wire rope

Taxable items

  • Wire rope, chain, or fiber rope or lines not principally used for running gear, mooring, lashing or rigging, such as hand-held lines, heaving lines, and lines and chain used for miscellaneous purposes.

Revision July 2026