Rental Company License

Rental Vehicles

Pleasure cars being rented for less than one year.  It shall also mean rentals of trailer coaches and trucks having a gross weight of 26,000 pounds or less and trailers or semi-trailers having a gross weight of 3,000 pounds or less.

If a vehicle is rented for less than 30 days in a continuous period of 365 days, or for less than 60 days in a continuous period of 730 days; or the vehicle is no longer used in a short term rental, then the 6% purchase and use tax would be due. 

Loaner Vehicles

A loaner vehicle is a vehicle registered as a rental unit for which vehicles being compensated by the manufacturer for the use of the loaner for warranty work must use the per diem amount to calculate the rental use tax.  If there is no compensation or the loaner does not meet the 30 days in a continuous period of 365 days, then purchase and use tax is due. 

A dealer should make the election at the initial time of registration to pay the purchase and use tax if they know; the vehicle will not be rented or compensated for customer usage.  

It is unlawful for any person to act as a rental company without being licensed as such.

Registration of Rental Vehicle

When registering a vehicle for the purpose of renting/loaning, the registration must be accompanied with a Rental Vehicle Tax Exemption form (VD-039).

All sections of the registration application (VD-119) must be completed. Rental vehicles are exempt from paying the 6% purchase and use tax, but the purchase price must be completed and the tax section left blank.

On registration application (VD-119) in Section 9, leave the tax section blank and attach a copy of the Rental Rental Vehicle Tax Exemption form (VD-039).   

When sending a Dealer Report of Sale form (VD-127), with the registration, this form must also be completed by supplying the purchase price and all other appropriate fees.

When transferring license plates from one vehicle to another, a transfer ownership must occur. In order to transfer to another entity you may own, you must have a separate FEID number and/or separate location.  

Rental Tax

On or before January 1 of each year, an applicant for a rental company license shall file an application furnished by the Commissioner. The application shall not be under oath but shall contain a declaration that it is made under the penalties of perjury.  Upon receipt and review of an application the Commissioner may issue a license to an applicant which will remain in effect for one year or until such time as surrendered or revoked.

There is a use tax imposed on the rental charge of each transaction, in which the renter takes possession of the vehicle in this State, during the life of a pleasure car purchased for use in short-term rentals, which tax is to be collected by the rental company from the renter and remitted to the Commissioner. The amount of the tax shall be nine percent of the rental charge. Rental charge means the total rental charge for the use of the pleasure car, but does not include a separately stated charge for insurance, or recovery of refueling cost, or other separately stated charges which are not for the use of the pleasure car.

Any person registering a pleasure car in this State subject to the tax imposed must pay the tax imposed on a monthly or quarterly basis, as determined by the commissioner.

Contact Information

Related Forms & Information

FAQs

No, if you have more than one location, each location must have its own rental license number, however; one tax return can be filed for all locations.  

Once the registration has been processed the Exemption form will be filed with the Rental Company License and Application for audit purposes

Once licensed as a VT Rental Company you will receive a Rental Company License and Rental Company Tax reports from the Dept of Motor Vehicles.  

The 9% rental tax is remitted to the Department of Motor Vehicles on a monthly basis. 

Any pleasure car being rented in Vermont requires the renter be a licensed Rental Company.

A “Rental Company” is defined as any person offering pleasure cars for rent/loan on a short term basis.

The applicant must complete a Rental Company License application which must include a listing of ALL rental vehicles in the company’s fleet.  A surety bond will be required in the amount determined by the DMV.  The rental company will be issued a Rental License number for each rental location.

The 9% rental tax must be collected on all vehicles being rented on a short term basis.

The license also allows the rental company to be exempt from paying the purchase and use tax.  A 9% rental tax must be collected on all pleasure car rentals and loaners.

Tags: 

Contact Us

Vermont Department of Motor Vehicles
120 State Street
Montpelier, VT 05603-0001

Monday-Friday: 7:45am-4:30pm
Contact us

Connect with us

Twitter icon
Facebook icon
Instagram icon
YouTube icon
RSS icon