Boat owners, marinas and tourism businesses tell council proposed boat tax would drive boats and business away

At the April 16, 2025 special session public hearing, multiple residents, marina operators and tourism business owners strongly opposed a proposed tax on pleasure boats and watercraft, saying it would drive boats and associated economic activity out of Virginia Beach.

Ryan Davidson, a lifelong Virginia Beach resident who said he keeps a 22-foot Boston Whaler on a private lift, told council “a $1.50 per 100 boat tax means a $225 bill” on his $15,000 assessment and asked the council to drop the proposal. He said many waterfront properties receive no city dredging support and that private dredging costs can be thousands of dollars.

Russ Costinas, representing the Mid Atlantic Sports and Boat Show, said the boat tax had been eliminated in 2002 after similar actions pushed boats to neighboring cities. “If you take a $300,000 boat, that’s gonna be $4,500,” Costinas said, and he said dealers and marina operators have already reported inquiries about moving slips to Hampton and other nearby localities.

John Pritchard and others who said they run boat repair or charter businesses warned that slips are hard to find and that boat owners can and will relocate slips and service to nearby cities with lower or no taxes. William Pappas, who said he operates a charter boat business, said boats and charters provide tourism revenue and that a steep tax would threaten his ability to operate. “These boats are gonna cost…$300,000. Now you’re looking at a $4,500 tax every year,” Pappas said.

Phil Kellum, who identified himself as the administrator of several local taxes, told council it is “not a practical way to raise revenue” and warned that imposing a higher boat tax would risk losing revenue as larger boats relocate to other jurisdictions. Kellum said a nominal fee might be more practical than the proposed rate.

Speakers repeatedly linked the boat tax to dredging funding: some said they would accept fees tied narrowly to dredging; others said the tax would fall disproportionately on midrange boat owners and charter operators and would harm related businesses, restaurants and marinas. Several speakers said neighboring jurisdictions such as Hampton, Portsmouth and Chesapeake have lower or no boat tax and could attract Virginia Beach boat owners.

The mayor’s public-notice opening referenced “pleasure boats and watercraft in excess of 15 feet used for recreational purposes” as part of the items for public input during the FY2025 budget and CIP hearing. The transcript of public comment does not show a council vote; speakers urged the council to reject or revise the proposal.