Did Florida's rental-car surcharge apply to a membership-based car-sharing service, and how did it apply to multiple trips in one day?

Plain-English summary

The Department concluded that the membership-based car-sharing service rented motor vehicles for consideration. Calling users members, offering unusually short trips, and asserting social or environmental benefits did not remove the transactions from Florida's rental-car surcharge.

The service's members could take multiple trips in a 24-hour period without signing another agreement or requiring additional action from the lessor. All trips for that period appeared on one daily invoice.

Under those facts, the surcharge was due once per member per day, regardless of how many trips the member took during the 24-hour period.

What this means for you

A car-sharing format does not by itself avoid the rental-car surcharge. The agreement and billing mechanics determine whether later vehicle uses are extensions of one rental or separate rentals.

Common questions

Did membership status prevent the surcharge? No.

Did very short trip duration prevent the surcharge? No.

How often was the surcharge imposed for several same-day trips? Once during the 24-hour period under the described agreement and daily invoicing.

Citations and references

• Fla. Stat. §§ 212.0606 and 212.02(10)(g) and Fla. Admin. Code r. 12A-16.002(3)(b), as cited in the advisement.

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 12A-022

Original ruling text

SUMMARY
QUESTION: Whether a member based car-sharing service is subject to the Florida rental car
surcharge?
ANSWER: Rentals of cars to members of a car-sharing service are subject to the rental car
surcharge.

September 17, 2012

XXX
XXX
XXX
Re:

Technical Assistance Advisement 12A-022
Florida Sales and Use Tax
Rental Car Surcharge
Section 212.0606, Florida Statute (F.S.)
Rule 12A-16.002, Florida Administrative Code (F.A.C.)
Petitioner: XXX (“Taxpayer”)

Dear
This letter is a response to your petition dated June 4, 2012, for the Department's issuance of a
Technical Assistance Advisement ("TAA") concerning the above referenced petitioner and
matter. Your petition has been carefully examined and the Department finds it to be in
compliance with the requisite criteria set forth in Chapter 12-11, F.A.C. This response to your
request constitutes a TAA and is issued to you under the authority of Section (s.) 213.22, F.S.
FACTS
Taxpayer offers a member based car-sharing service with a fleet of vehicles available for use by
registered members at any time of the day, seven days a week. A member can reserve a vehicle
before use, or simply locate one and access it. Each use is labeled as a “trip” and can last up to
four consecutive days. A unique feature of Taxpayer’s car-sharing service is members may, and
often do, use a car for a much shorter period of time than typical car rentals. According to
Taxpayer, the typical trip lasts twenty-five to forty minutes, costing between $7 and $10 before
taxes. Members are invoiced daily for all trips that occur and Taxpayer adds the rental car
surcharge and sales tax to this invoice.
REQUESTED ADVISEMENTS

Taxpayer seeks clarification, first, whether the rental car surcharge applies to its product, because
Taxpayer considers its membership based car-sharing service to be unlike the traditional car
rental system. Second, Taxpayer seeks clarification as to how, if the surcharge was applied, it
would be applied to a member who makes multiple trips in a twenty-four hour period.
TAXPAYER’S POSITION
Taxpayer states that its membership based service is not a traditional car rental system, and
therefore its rentals should not be subject to the surcharge. Additionally, Taxpayer asserts that
the surcharge, when combined with other state and local taxes, would place an undue burden on
its members.
Taxpayer asserts that its car-sharing model has numerous social and environmental benefits,
including reducing emissions and traffic congestion, providing cost savings for customers,
encouraging more efficient land use, and increasing mobility options and connectivity among
different transportation modes.
LAW & ANALYSIS
Section 212.0606, F.S., imposes a surcharge of $2.00 per day or any part of a day upon the lease
or rental of a motor vehicle licensed for hire and designed to carry less than nine passengers.
Section 212.02(10)(g), F.S., defines rental as “leasing or rental of tangible personal property and
the possession or use thereof by the lessee or rentee for a consideration, without transfer of the
title of such property . . . .” Although Taxpayer states it is not engaged in the “traditional” rental
of cars, with its membership based car-sharing system, Taxpayer is clearly renting cars. The fact
that customers are “members” does not alter the tax treatment. Further, Taxpayer’s statements
regarding social benefits, cost savings, and combined taxes do not qualify it for an exemption
from tax. Therefore, with regard to Taxpayer’s first question, the rental car surcharge does
apply, because Taxpayer is engaged in the rental of motor vehicles.
Rule 12A-16.002(3)(b), F.A.C., provides:
(b) When the terms of a lease or rental agreement authorize the lessee to extend
the lease or rental beyond the initial lease term without executing an additional
lease or agreement and without any action on the part of the lessor, the extension
period will not be considered a new lease or rental.
Here, members may make multiple trips in one day but are not required to execute any additional
agreement for the additional use. In those instances, no action is required of Taxpayer, the
lessor. Members are charged for every trip that occurs in the same twenty-four hour period on a
single daily invoice. These factors support the conclusion that the surcharge will only apply to
Taxpayer’s members once a day, regardless of the number of trips taken by the member in a
twenty-four hour period.
CONCLUDING STATEMENTS

Taxpayer’s product is subject to the rental car surcharge imposed by s. 212.0606, F.S. The
surcharge is due from Taxpayer’s members once a day, regardless of the number of trips taken
by a member in a twenty-four hour period.
You are further advised that this response, your request, and related backup documents are public
records under Chapter 119, F.S., and are subject to disclosure to the public under the conditions
of s. 213.22, F.S. Confidential information must be deleted before public disclosure. In an effort
to protect confidentiality, we request you provide the undersigned with an edited copy of your
request for Technical Assistance Advisement, the backup material, and this response, deleting
names, addresses, and any other details which might lead to identification of the taxpayer. Your
response should be received by the Department within 10 days of the date of this letter.
If you have any further questions with regard to this matter and wish to discuss them, you may
contact me directly at 850-717-7105.

Respectfully,

George R. McCormick
Senior Attorney
Technical Assistance & Dispute Resolution
Record ID: 126418