VIRGINIA BEACH, Va. — A potential boat tax proposed by Virginia Beach city leaders is being met with criticism by many boat owners.
At Wednesday’s city council meeting, about a dozen speakers voiced concerns about the boat tax included in the city’s proposed budget for FY 2025-26.
The proposed boat tax entails imposing a $1.50 per $100 assessed value on “privately owned pleasure boats” 18 feet and above. The rate is the same boat tax city leaders eliminated in FY 2001-02, except back then, it applied to all boats regardless of size.
The proposal is a sharp increase from the current boat tax rate of $0.000001 per $100 of assessed value. Many boat owners at Wednesday's meeting said the proposed tax coupled with the costs of maintaining a boat isn't a reality for them financially.
The tax at $1.50 amounts to an approximate 149 million percent increase. Practically, that means an owner with a boat valued at $100,000 who currently pays less than 1 cent would now pay $1,500.
"My boat's over 20 years old. Maintaining it fuel repairs cost me plenty already. I don't store it off site. It's on a lift above the water at my place, a $15,000 assessment," Virginia Beach resident Ryan Davidson said at the meeting. "This new $1.50 per 100 boat tax means a $225 bill. That's steep when I'm barely keeping it afloat financially. I know the city wants revenue, but this tax punishes boat ownership."
One speaker highlighted the potential economic impact if the tax drives people to move their boats out of Virginia Beach to neighboring cities with lower tax rates.
"Hampton has [the boat tax rate] you currently have now, which is basically nil... Chesapeake, they're at $0.09. Portsmouth, they're at $0.50," said resident Russ Kostinas. "If these boats leave, the marina operators are certainly going to have empty slips... The folks that leave are not going to eat at your restaurants. Their friends aren't going to come into here at the city, and then all the related boat activities."
The boat tax revenue would generate about $4.3 million, the proposal says. The revenue would support the Coastal section of the city’s Capital Improvement Projects (CIP). These projects include dredging both the Western and Eastern branches of the Lynnhaven River, as well as another project that aims to support dredge maintenance and equipment.
The proposal explains why the tax would apply to boats 18 feet and over, saying, “Larger boats typically draw more water driving more of the necessity for frequent dredgings to maintain navigable waterways.”
The proposed budget will not be finalized until May 13. However, during Tuesday's informal session, city leaders said they were already aware of backlash from the community, and indicated that they may be looking at alternative ways to support the Coastal CIP.
