23 Va. Admin. Code § 10-230-120
Example 1. A moved his residence to Virginia and brought with him a watercraft purchased two years before in the state of his former residence. The watercraft was originally purchased for $20,000 and sales tax was paid in the amount of $600 to the state of his former residence. The published pricing guide value of the watercraft when moved into Virginia was $16,000. Since the watercraft was not required to be titled in Virginia until six months or more after its acquisition, the Virginia watercraft use tax will be 2.0% of its current market value, or $320. The credit for a similar tax paid to another state completely offsets the Virginia watercraft tax.
Example 2. X purchased a watercraft in State A which imposed no tax on the purchase; the watercraft was used in State C and a use tax was imposed by State C in the amount of $200. X then moved the watercraft to Virginia for use in this Commonwealth and the Virginia watercraft use tax based on the lower of original cost or current market value was $320. X required to pay $120 Virginia watercraft use tax ($320 tax liability less $200 credit for a similar tax paid to another state.)
Example 3. Y purchased parts and materials and built a watercraft valued at $12,000 when completed and required to be titled in Virginia. The watercraft use tax liability was $240 and Y sought credit for $200 Virginia retail sales tax which he paid on parts and materials purchased to construct the watercraft. No credit was allowable because no similar tax was paid to Virginia or to another state on the watercraft. The tax paid on parts and materials is not considered a similar tax paid on the purchase or use of the watercraft.
23 Va. Admin. Code § 10-230-120
Statutory Authority
§ 58.1-203 of the Code of Virginia.