Bulletin Number
VTB 81-22-A
Tax Type
Watercraft Sales and Use Tax
Description
Watercraft Sales and Use Tax Act
Topic
Taxability of Persons and Transactions
Date Issued
11-09-1981
The text of Department of Taxation Bulletin 81-22A, concerning the 2% watercraft tax imposed on purchasers of watercraft, is reproduced below.
The Virginia Watercraft Sales and Use Tax Act imposes a 2% sales tax on purchasers of all watercraft sold in Virginia on or after January 1, 1982 which are at least 15 feet in length and which have a gross weight in excess of 400 pounds unless such watercraft have valid marine documentation issued by the United States Coast Guard. All such watercraft are subject to the 2% tax whether purchased new or used and whether purchased from a watercraft dealer or from an individual casual seller. The tax is based upon the sale price.
The Act imposes a comparable 2% use tax on the user of any such watercraft not sold in Virginia but required to be titled in Virginia on or after January 1, 1982. The use tax is based upon the original sale price of the watercraft or upon the current market value if purchased six months or more before required to be titled for use in Virginia.
An exemption from Virginia Retail Sales and Use Tax (4% Sales Tax) is provided for all transactions subject to the Watercraft Sales and Use Tax. While no transaction will be subject to both taxes, every transaction on or after January 1, 1982 will be subject to either Watercraft Sales and Use Tax or to Virginia Retail Sales and Use Tax, unless specifically exempted by law. A credit will be allowed for a similar tax paid on watercraft purchased in another state.
Dealers in the regular business of selling watercraft are exempt from tax on purchases of watercraft for resale. However, they must register with the Department of Taxation as watercraft dealers in order to be exempt. Dealers purchasing watercraft for lease, charter or other use for compensation are exempt from tax on such purchases, but are subject to a tax of 2% of the gross receipts from lease, charter or other use, payable monthly. Furthermore, by agreement with the Department of Taxation, dealers may collect and remit watercraft tax on behalf of their customers. Monthly reporting forms will be available from the Department of Taxation.
The watercraft tax may be paid by individual purchasers at any of the offices of the Department of Taxation or the Commission of Game and Inland Fisheries or, if watercraft is purchased from a dealer authorized by agreement to collect the tax, it may be paid to the dealer. Dealers must remit tax direct to the Department of Taxation.
An information package will be sent to all known watercraft dealers in November, 1981. The package will include instructions and registration forms.
If you have any questions, please feel free to contact the Department of Taxation, Watercraft Tax, P. O. Box 2185, Richmond, Virginia 23217-2185 telephone (804) 257-8037.
Tax Bulletins