Watercraft sales, leases, and rentals; repair and replacement parts; and maintenance materials

# A.

Generally. Sales, leases, and rentals of watercraft are not subject to the retail sales and use tax when the same transactions are subject to the watercraft sales and use tax. See the Watercraft Sales and Use Tax Regulations, 23VAC10-230, for more information on the tax. Watercraft not subject to the watercraft sales and use tax are subject to the retail sales and use tax when sold, leased or rented.

# B.

Repair and replacement parts and accessories.

# 1.

Repair and replacement parts, accessories, attachments, and lubricants installed on a watercraft at the time of sale, or on leased or rented watercraft, that are included in the sales price for computing the watercraft sales and use tax or in gross receipts from a lease or rental are exempt from the retail sales and use tax. Such items may be purchased by a dealer, as defined in § 58.1-1401 of the Code of Virginia, exclusive of the retail sales and use tax when a resale exemption certificate, Form ST-10, is presented at the time of sale. Repair parts purchased by nondealers for installation on watercraft are not exempted from the retail sales and use tax.

# 2.

Boat motors. Boat motors that will be installed on watercraft are subject to the Watercraft Sales and Use Tax. Any boat motors that will not be installed on watercraft are subject to the retail sales and use tax. See 23VAC10-230-40 B for more information on boat motors subject to the Watercraft Sales and Use Tax.

# C.

Maintenance contracts and materials. One-half the charge for maintenance contracts that provide for both repair labor and repair parts is subject to the tax. If a maintenance contract provides only for repair labor, the charge for the contract is tax exempt. Maintenance contracts for replacement parts only are taxable on the full charge for this contract. Maintenance materials such as oil, grease, soaps, cleaners, etc. used on watercraft are subject to the retail sales and use tax. See the Virginia Watercraft Sales and Use Tax Regulations for information relating to the watercraft sales and use tax generally.

Last amended: Historical Notes Derived from VR630-10-111.1; added August 1, 1982; amended, eff. January 1, 1985; Virginia Register Volume 25, Issue 8, eff. March 8, 2009.

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