Bulletin Number
VTB 87-5
Tax Type
Watercraft Sales and Use Tax
Description
Watercraft Sales and Use Tax: Maximum Tax Limitation
Topic
Basis of Tax
Date Issued
06-01-1987
Virginia Code § 58.1-1402 imposes a tax of two percent (2%) on the sale price of every "watercraft' as defined in § 58.1-1401 of the Code.
New Law
Generally. Senate Bill 391 (Chapter 516) amends Va. Code § 58.1-1402, effective July 1, 1987, to provide a $1,000 maximum tax limitation on the sale of watercraft subject to the Watercraft Sales and Use Tax. This maximum tax limitation effects watercraft with a sale price or market value in excess of $50,000. The maximum limitation is set to expire on July 1, 1992.
Application of Limitation to Nondealer (Individual) Sales of Watercraft. The $1,000 maximum tax limitation applies to the sale or transfer of watercraft between private individuals. The date when the watercraft is required to be titled will determine the application of the $1,000 maximum limitation. For example, if a watercraft is purchased from a private individual for more than $50,000 prior to July 1, 1987, but is not required to be titled until on or after July 1, 1987, the maximum tax limitation will apply to this transaction.
Application of Limitation to Leases, Charters and Other Uses. The maximum tax limitation does not apply to leases, charters or other uses of watercraft subject to the Watercraft Sales and Use Tax.
Watercraft Purchased Outside Virginia. The $1,000 limitation applies to watercraft purchased outside Virginia but required to be titled in Virginia. The date when the watercraft is required to be titled will determine the application of the $1,000 maximum limitation. For example, if a watercraft is purchased outside Virginia for more than $50,000 prior to July 1, 1987, but is not required to be titled in Virginia until on or after July 1, 1987, the $1,000 limitation will apply to this transaction.
Application of the 4|1/2% General Retail Sales and Use Tax. Vessels and boats not defined as watercraft remain fully subject to the 4|1/2% retail sales and use tax.
Tax Bulletins