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.
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 to rent/loan, the registration must be accompanied by a Rental Vehicle Tax Exemption form (VD-039).
All sections of the registration application 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 the registration application 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, transfer ownership must occur. To transfer to another entity you may own, you must have a separate FEID number and/or separate location.
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, 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.