VIRGINIA BEACH, Va. (WAVY) — In response to community feedback, Virginia Beach City Council voted to remove a pleasure boat tax of $1.50 per $100 of assessed value from the FY 2025-26 budget.
From Pungo to Lynnhaven bay, boaters in Virginia Beach love the dynamic waterways in the city.
“You could go in, you know, in the bays, in the inlets,” Eric Frostad described. “You could go out to the bay, off shore. So there’s just a wide variety of places to boat.”
In the city budget was a proposal to reinstate the boat tax to cover the needs of the coastal section. If it had passed, a boat that is 18-feet or longer would have been taxed $1.50 for every $100 of assessed value. It is the same tax rate eliminated from the budget more than 20 years ago, though that tax applied to boats of all sizes.
Frostad said his boat is valued at roughly $40,000, so he would have had to pay about $600 in taxes on his boat with the new boat tax.
“This is just seems like another way to tax us for being boat owners,” he said. “Totally against it. I think the city could find other ways to to get income.”
He is not alone. This has become the talk of the docks. Everyone WAVY spoke with was against the tax.
“I heard about it on Facebook,” Dominic Loper said. “That’s where it first started out. A friend of mine actually shared it, and I was like, well, that’s that’s a little disheartening.”
“I would like to see it reevaluate it,” he added. “You know maybe maybe table it and or lower it or maybe not do it at all.”
As the city budget draft notes, this and all other property taxes are assessed by the Commissioner of Revenue Office. They estimate about $4.3 million would come from the proposed boat tax. Dredging projects and other capital improvement plans would be funded by the boat tax.
The budget had this topic listed on the agenda for the upcoming May 13 city council meeting, but a representative with the city confirmed to WAVY that a week earlier members of city council pulled the boat tax from the budget.
A letter from the City of Virginia Beach dated May 6, 2025, includes the following information on the boat tax:
In response to community feedback, the proposed pleasure boat tax of $1.50 per $100 of assessed value will be removed from the FY 2025-26 Budget. In lieu of the tax, a more affordable annual registration fee will be implemented, tiered based on size of the vessel. Attached to this document is the proposed ordinance outlining the fee. Revenue generated through this fee will be dedicated to the Coastal CIP section to provide a sustainable funding source for future dredging needs. As a result of this change, there is a net reduction in revenue of $1,960,530. The four Capital Improvement Projects enhanced through the additional revenue will be reduced in the aggregate amount of $1,425,000. The remaining $535,530 of lost revenue will be offset by the use of General Fund fund balance.
Excerpt from City of Virginia Beach May 6 Council Reconciliation Letter