A new tax on luxury goods such as yachts, personal aircraft, and cars would take effect on January 1, 2022.
The tax would be applied to cars and personal aircraft that retail over $100,000; boats for personal use retailed over $250,000. If the budget passes, the tax will come into effect on January 1, 2022.
The tax is calculated at the lesser of:
- 20 percent of the value above threshold ($100,000 for cars and personal aircraft; $250,000 for boats); or
- 10 percent of the total value of the luxury car, boat, or personal airplane.
The tax would affect all new passenger vehicles, including sports cars, coupes, sedans, station wagons, SUVs, passenger pick-up trucks, and passenger vans and minivans that seat less than 10 people.
Motorcycles and certain off-road vehicles such as ATVs and snowmobiles, racing cars (used solely for on-track or off-road racing) and RVs are exempt from the luxury tax. Also exempt are off-road, construction and farm vehicles; certain commercial vehicles such as some trucks and cargo vans; and public sector vehicles such as buses, police cars, ambulances, and hearses.
New aircraft affected include airplanes, helicopters and gliders. Commercial aircraft and aircraft equipped to carry more than 39 passengers are exempt.
Boats affected include yachts, recreational motorboats, and sailboats, although smaller personal watercraft, such as water scooters, are exempt. Cruise ships, ferries, commercial fishing vessels, and floating homes will not be affected by the tax, either.