(a)
Definitions. The following words and terms, when used in this
section, have the following meanings, unless the context clearly indicates
otherwise:
Licensing and title fees-Licensing and
title fees imposed by
75 Pa.C.S. §§
1912,
1916(a), 1920 and 1952(a)
and collected by the Department of Transportation. The term does not include
encumbrance fees.
Local sales or use tax-Sales or Use Tax
imposed by a county of this Commonwealth or the city of Philadelphia and
administered by the Department.
PTA-The Public Transportation Assistance
Fund created by Article XXIII of the TRC (72 P. S. §
9301).
Purchaser-A person who acquires, for
money or other consideration, the custody or possession of a rental vehicle
under a rental contract.
Rental contract-A contract between a
purchaser and a vehicle rental company for the use of a rental vehicle for 29
or fewer consecutive days. If a rental vehicle is rented for 29 or fewer
consecutive days, and the use of the rental vehicle extends beyond a 29-day
period without entering into a new written contract, the transaction remains a
rental unless the parties enter into a written lease agreement.
Rental payment-Full consideration paid
or delivered or promised to be paid or delivered to the vehicle rental company
under a rental contract, excluding charges for local sales or use tax, State
Sales or Use Tax and PTA fees.
Rental vehicle-A motor vehicle designed
to transport 15 or fewer passengers or a truck, trailer or semitrailer used in
the transportation of property other than commercial freight, that is rented
without a driver. The term does not include a motorcycle, motor-driven cycle,
school bus, hearse, motor home, camper or mobile home.
State Sales or Use Tax
-Sales or Use Tax imposed by Article II of the TRC (72 P. S. §§
7201-7281.2).
VRT-Vehicle Rental Tax-The tax
authorized under Article XVI-A of the TRC (72 P. S. §§
8601-A-8604-A).
Vehicle rental company-A business entity
engaged in the business of renting five or more rental vehicles in this
Commonwealth.
(b)
General provisions.
(1)
General. This section is promulgated to administer Article
XVI-A of the TRC relating to the VRT.
(2)
Registration. A vehicle
rental company renting rental vehicles that are subject to the VRT shall
register with the Department.
(3)
Returns. A vehicle rental company shall report the VRT on a
return prescribed by the Department. The return is due on a quarterly
basis.
(4)
Payment. A vehicle rental company shall make payment with the
return.
(5)
Direct payment
permit. A purchaser cannot use a direct payment permit issued under
§
34.4 (relating to direct payment
permit) in conjunction with the VRT because the vehicle rental company may be
entitled to a refund of the tax collected.
(6)
Applicability of TRC.
Article II of the TRC and regulations promulgated thereunder apply to the
VRT.
(c)
Scope.
(1)
General. With respect to rental contracts involving motor
vehicles designed to transport 15 or fewer passengers, a tax of 2% is imposed
upon the rental payments. With respect to rental contracts involving trucks,
trailers and semitrailers used in the transportation of property other than
commercial freight, entered into on or after July 1, 1997, a tax of 2% is
imposed upon the rental payments made on or after July 1, 1997. If the vehicle
rental company fails to collect the applicable tax, the purchaser shall pay the
tax directly to the Department on a form prescribed by the
Department.
(2)
Examples.
(i) The following
are examples of transactions that are subject to the VRT:
(A) "A" rents a rental vehicle from a vehicle
rental company for 14 days. Due to circumstances unforeseen at the commencement
of the rental, "A," without entering into a new contract, continues to use the
car on a day by day basis and eventually returns the car on the 36th day.
Because the transaction continues to be governed by the rental contract for the
entire 36-day period, the rental payment is subject to the VRT.
(B) "B" rents a rental vehicle from a vehicle
rental company for 10 days. The rental contract provides for an additional
charge for excess mileage as well as a pick up and drop off fee. In addition,
under the rental contract, "B" elects to obtain a vehicle damage waiver, a
child's car seat and a car top carrier. Because the charges for excess mileage,
a pick up and drop off fee, a vehicle damage waiver, a child's car seat and a
car top carrier are all part of the rental payment, the cost of these items is
subject to the VRT.
(C) "P" rents a
rental vehicle for 7 days from "R." "R" owns two and leases 28 of the 30 rental
vehicles that it rents to others. Because "R" has five or more rental vehicles
available for rental, "R" is a vehicle rental company, and the rental payment
made by "P" is subject to the VRT.
(D) "R" rents a truck to transport a used
living room set to "R's" hunting camp. The rental payments are subject to VRT
as the living room set does not qualify as commercial freight.
(ii) The following are examples of
transactions that are not subject to the VRT:
(A) "Y" rents a rental vehicle from "E"
vehicle rental company for 28 days. Due to circumstances unforeseen at the
commencement of the rental, "Y" wishes to use the car for a longer period of
time. After using the car for 28 days, "Y" returns the car to "E," and pays the
VRT on the rental payment, and the parties terminate the rental contract. They
then enter into a lease agreement under which "Y" leases the same car from "E"
for 2 years. Because the second transaction is a lease agreement and not a
rental, the lease payments are not subject to the VRT.
(B) "Z" rents a rental vehicle from "D" car
dealership, which has only three rental vehicles available for rental. Because
"D" has fewer than five rental vehicles available for rental, "D" is not a
vehicle rental company and the rental payment is not subject to the
VRT.
(C) "M" manufacturer rents a
truck used exclusively to deliver "M's" own manufactured products to "M's"
customers. The rental payments are not subject to VRT as "M's" products qualify
as commercial freight.
(d)
Exclusions. If the
rental of a rental vehicle is exempt from State Sales or Use Tax, the rental is
also exempt from the VRT. A purchaser shall support a claim for exemption from
the VRT by submitting a completed Pennsylvania exemption certificate setting
forth a valid basis for exemption. A purchaser may use the same exemption
certificate used to claim an exemption from State sales or use tax, but the
exemption certificate shall clearly indicate that the purchaser is claiming an
exemption from the VRT. The purchaser shall make that indication either by
checking the appropriate blocks for the VRT on the exemption certificate form
or by checking the paragraph labeled "other" on the older exemption certificate
form and explaining that an exemption is being claimed from the VRT.
(e)
Annual reconciliation
reports.
(1)
General. A vehicle rental company that has remitted the VRT
and is claiming a refund shall file an annual reconciliation report. An annual
reconciliation report shall be on a form prescribed by the Department. An
annual reconciliation report is not required if the vehicle rental company is
not claiming a refund. An annual reconciliation report shall be filed on or
before February 15 of the subsequent calendar year.
(2)
Date of filing. The
United States Postal Service postmark date will be used to determine the date
of filing of an annual reconciliation report. When the envelope containing the
report does not reflect a United States Postal Service postmark date, the date
of receipt by the Department shall determine the date of filing.
(3)
Contents. An annual
reconciliation report shall set forth the amount of both:
(i) The VRT remitted during the previous
calendar year.
(ii) The total
amount of licensing and title fees imposed by the Commonwealth on a vehicle
rental company's rental vehicles and paid to the Department of Transportation
by the vehicle rental company in the previous calendar year.
(4)
Refund. The
Department will refund to a vehicle rental company that has remitted the VRT an
amount, not including interest or penalties that may have been paid by the
vehicle rental company, equal to the total amount of licensing and title fees
paid to the Department of Transportation on the rental vehicles. The amount of
refund cannot exceed the amount of the VRT remitted by the vehicle rental
company in the previous calendar year.
(5)
Example. "R" owns a
vehicle rental company that "R" sells to "S" on July 30, 1995. Prior to the
sale, "R" pays licensing and title fees on a portion of its fleet of vehicles.
"R" also files tax returns and remits the VRT on January 20, April 20 and July
20, 1995. Under paragraph (4), "R" may claim a refund up to the amount of the
VRT remitted by "R" with the three tax returns. After acquiring ownership of
the vehicle rental company, "S" pays the licensing and title fees due between
August 1 and December 31, 1995, on the other vehicles in the fleet, and remits
the VRT for the third quarter on October 20, 1995. "S" may claim a refund of
the licensing and title fees paid from August to December. The amount of the
refund to "S" may not exceed the amount of the VRT "S" remitted in October. To
claim a refund, both "R" and "S" shall file their respective annual
reconciliation reports on or before February 15, 1996.
