Did Florida's daily rental-car surcharge restart every 30 days when a customer signed one addendum for a specific rental longer than 30 days?

Plain-English summary

The daily rental-car surcharge applied only to the first 30 days of the stated long-term rental.

At the start of the rental, the customer signed both the ordinary rental agreement and an addendum specifying the total number of weeks for the same vehicle. The addendum also made the customer's signature effective for the later rental agreements needed to complete that term.

Because the addendum established one specific continuous duration, the later agreements were part of the original agreement rather than renewals that restarted the surcharge.

For prior overcollections, the customer first had to receive a refund or credit from the rental company. The company could then seek a Department refund or take a credit on a later return within 36 months of remitting the surcharge.

What this means for you

The result depended on executing the term-setting addendum at inception for the specific vehicle. A true later renewal or a different documentation pattern could restart the 30-day surcharge period.

Common questions

Q: Did the surcharge continue after day 30? A: No, for the specific continuous term established by the addendum.

Q: Did each later rental agreement count as a renewal? A: No. The ruling treated those agreements as parts of the initial agreement.

Q: Could the rental company credit an overpayment immediately? A: It first had to refund or credit the customer.

Q: What was the stated deadline for the dealer's credit? A: Within 36 months after the dealer remitted the surcharge.

Citations and references

• Fla. Stat. § 212.0606(1) — rental-car surcharge
• Fla. Admin. Code rr. 12A-16.001 and 12A-16.002(1)(b) — surcharge administration and 30-day limit
• Fla. Admin. Code r. 12A-1.014(4), (6), and (7) — customer refund and dealer credit
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 95A-024

Original ruling text

Jun 23, 1995

Re: TAA 95A-024
Rental Car Surcharge
Section 212.0606(1), F.S.
Rules 12A-16.001, 12A-16.002(1)(b), and 12A-1.014, F.A.C.

Dear :

This is in response to your letter dated May 3, 1995, in which you request a Technical Assistance Advisement (TAA) on behalf of your client, XXXXX (hereinafter "Taxpayer") on the application of the rental car surcharge under Taxpayer's "Consecutive Rental Agreement."

FACTS

"DESCRIPTION OF THE TRANSACTION

"... [Taxpayer] provides rental car services to customers from locations, generally in and around airports and other business centers. These customers enter into rental contracts with [Taxpayer] to rent the subject vehicles. Under normal' circumstances, renters execute a rental agreement, a sample copy of which is attached hereto as ExhibitA.'

"Specifically, [Taxpayer] has developed a program whereby when a renter indicates its intention to rent a vehicle for an extended period of time, greater than 30 days,
[Taxpayer] requires that the renter execute a Consecutive Rental Agreement' in addition to the regular contract. A copy of that document is attached hereto as ExhibitB.' The intended purpose of the document is to allow the renter to indicate its intended duration of rental and sign only one additional document at inception. The document is necessary to [Taxpayer] for the proper submission of credit card charges, as well as for planning the allocation of

[Taxpayer]'s vehicles.

"In the past, [Taxpayer] has interpreted this program to encompass a series of renewed 30-day rental agreements and thus has collected and remitted the rental car surcharge for all days of rental. However, [Taxpayer] has now been made aware of the Department's TAA 93A-029, and believes that its Consecutive Rental Agreement' program is substantially similar to themini-lease' program in that instance.

"III. ISSUES AND PROPOSED DETERMINATION

"A. Issue
"1. Whether, in the future, [Taxpayer] should collect the
$2.00 per day rental car surcharge beyond the initial 30 days for vehicles rented by [Taxpayer] to customers under
[Taxpayer]'s `Consecutive Rentals Addendum' for consecutive rentals of more than 30 days.

"2. Whether the `Consecutive Rentals Addendum' constitutes separate rental contracts subject to the surcharge.

"3. If the answer to question 1 above is no, whether, if a previous customer under a `Consecutive Rentals Addendum' who can document that he or she paid the car rental surcharge beyond the initial 30 day period seeks a refund,
[Taxpayer] may refund such amount to the customer and take a credit for the amount of such refund on a subsequent automobile surcharge return filed with the Department within 36 months, pursuant to Rule 12A-1.014, Florida Administrative Code.

"B. Proposed Determination

"1. The $2.00 per day rental car surcharge is imposed upon vehicles rented by [Taxpayer] to customers under
[Taxpayer]'s `Consecutive Rentals Addendum' only for the first thirty one (sic) days of the term.

"2. The `Consecutive Rentals Addendum' does not constitute

separate rental contracts subject to the surcharge.

"3. Based on the above, if a previous customer under a
`Consecutive Rentals Addendum' who can document that he or she paid the car rental surcharge beyond the initial 30 day period seeks a refund, [Taxpayer] may refund such amount to the customer and take a credit for the amount of such refund on a subsequent automobile surcharge return filed with the Department within 36 months, pursuant to Rule 12A1.014, Florida Administrative Code.

"IV. DISCUSSION

A. Section 212.0606, Florida Statutes, entitled `Rental car surcharge' states, in part:

"(1) A surcharge of $2.00 per day or any part of a day is imposed upon the lease or rental of a motor vehicle licensed for hire and designed to carry less than nine passengers regardless of whether such motor vehicle is licensed in Florida. The surcharge applies to only the first 30 days of the term of any lease or rental. The surcharge is subject to all applicable taxes imposed by this part.

"B. Rule 12A-16.001, Florida Administrative Code, states, in part:

"For the purpose of administering the Rental Car Surcharge
... all rules relating to Sales and Use Tax (Chapter 12A-1, Florida Administrative Code) shall apply to the surcharge, except in those situations where rules relating to the surcharge have been issued to clarify specific statutory provisions.

"C. Rule 12A-16.002, Florida Administrative Code, entitled
`Imposition and Payment of the Surcharge' states, in part:

"(b) The surcharge applies to each lease or rental of a for hire passenger motor vehicle, specified in the lease or rental agreement, on the first thirty (30) days the vehicle

is continuously leased or rented to one lessee or renter.

"1. If a for hire passenger motor vehicle is leased or rented to one lessee or renter under an agreement for thirty (30) continuous days or fewer, or for an unspecified continuous duration, the surcharge shall be collected and remitted on the lease or rental payments due up to the first thirty (30) days. If the lease or rental agreement is renewed at any time for an additional period, the renewal constitutes a new lease or rental and, therefore, the surcharge is due until thirty (30) continuous days is reached on the renewed lease or rental agreement.

"2. If a for hire passenger motor vehicle is leased or rented to one lessee or renter under an agreement for a specific duration, in excess of thirty (30) continuous days, the surcharge shall be collected and remitted on lease or rental payments due for thirty (30) continuous days. If the lease or rental agreement is renewed for an additional period, the renewal constitutes a new lease or rental and, therefore, the surcharge is due until the thirty (30) continuous day maximum is reached on the renewed lease or rental agreement.

"D. Rule 12A-1.014, Florida Administrative Code, states, in part:

"(4)(b) Any dealer who is entitled to a refund of taxes paid to the Department of Revenue may, in lieu of applying to the Department for a refund, take credit for such amount on any subsequent report filed within 36 months of the date on which the dealer remitted the tax to the state...

"(6) Whenever a dealer credits a customer... for tax erroneously collected, he must refund such tax to his customer before this claim to the State for credit or refund will be approved.

"(7) A taxpayer who has overpaid tax to a dealer, or who has paid tax to a dealer when no tax is due, must secure a refund of the tax from the dealer and not from the

Department of Revenue...

"E. In order for customers of [Taxpayer] to be allowed to rent vehicles for more than 30 days from [Taxpayer], they are required to execute a Consecutive Rentals Addendum' at the time they take possession of the vehicle. In doing so, they are required to set forth the specific duration of time, beyond 30 days, that they agree to rent the vehicle. They also acknowledge, by their signature, that they agree to be bound by subsequent rental agreements which are necessary to complete the desired term of rental. Essentially, the executedConsecutive Rentals Addendum' indicates the customer intent to rent the vehicle for a specific duration, and also serves to incorporate the specific other terms contained in the standard rental agreement for the length of that duration.

"F. Even though the Consecutive Rentals Addendum' states that the successive consecutive rentals are covered by the terms contained in subsequent rental agreements, it is theConsecutive Rentals Addendum' which sets forth the duration of the rental period. Therefore, the subsequent rental agreements may not constitute separate rental contracts, and per [subparagraph] 2[.] of Rule 12A16.002(b), the surcharge should only be collected on the first thirty days of rental.

"G. On May 10, 1993, the Department of Revenue reached a similar conclusion in TAA 93A-029, when presented with similar facts. In that case, the rental car company used a
mini-lease' in conjunction with its regular contract when customers desired to rent vehicles for longer than thirty days. In that instance, the Department determined that, because the mini-lease, rather than the monthly rental agreement, set forth the duration of the rental period, the mere execution of monthly rental agreements did not subject the transaction to the surcharge beyond the initial 30 days, unless the mini-lease itself was renewed. In this case, it is [Taxpayer's]Consecutive Rentals Addendum,' rather than the rental contracts, that sets forth the duration of the rental period, and therefore Taxpayer's

rentals in excess of 30 days under the `Consecutive Rentals Addendum' should not be subject to the surcharge after 30 days."

STATUTORY/REGULATORY AUTHORITY

The provisions of s. 212.0606(1), F.S.; and Rules 12A16.001, 12A-16.002(1)(b), 12A-1.014, F.A.C., will not be requoted since the text of these applicable authorities has been presented under the FACTS section of this letter.

DISCUSSION

Specifically, Taxpayer has requested a determination from the Department regarding the application of the rental car surcharge, imposed under Section 212.0606, F.S., to vehicles rented to customers for successive periods under its consecutive rental program. Under Taxpayer's rental program, a customer enters into a rental agreement for a rental term of a specific number of days. However, if the customer desires to rent a vehicle for an extended period of time greater than 31 days, Taxpayer requires the customer to execute the "Consecutive Rentals Addendum" at the time of the execution of the "Rental Agreement." This requirement is not evident in the Rental Agreement (Exhibit A) executed by the customer, nor do the Terms and Conditions of the Rental Agreement state this requirement. However, the Rental Agreement does provide:

"These Terms and Conditions form a part of the Rental Agreement (`Agreement'), which consists of the following parts: The Terms and Conditions, an individualized Rental document signed by Renter, a Return document with final charges, and any applicable amendments. This agreement is for the rental of the Vehicle described on the Rental document."

The Consecutive Rentals Addendum document, which must be executed by the customer at the time of rental, and which is an amendment to the Rental Agreement, provides:

"You, the customer, have requested consecutive rentals lasting a duration of ______ weeks. The first 31 days of the consecutive rentals will be covered by the above identified Rental Agreement. The balance of the duration of consecutive rentals will be covered by subsequent Rental Agreements. You agree your signature below will constitute your signature for purposes of any subsequent consecutive rentals necessary to complete the duration of weeks identified above in this paragraph."

ADVISEMENT

Under Taxpayer's rental program, a customer must execute a Consecutive Rentals Addendum simultaneously with the execution of the Rental Agreement if the customer intends to rent the specific vehicle described in the Rental Agreement for a term longer than 30 days. The addendum provides for a rental term of a specific number of weeks that the customer desires to rent the specific vehicle described in the Rental Agreement. The addendum further provides that the customer's signature on the addendum constitutes the customer's signature for any subsequent Rental Agreements required to cover subsequent rentals for the weeks identified in the addendum.

Based on the fact that at the inception of the rental of a specific vehicle for a period longer than 30 days, the customer must execute the Consecutive Rentals Addendum, which sets forth the duration of the rental period, simultaneously with the Rental Agreement, it is the position of the Department that the rental car surcharge would apply only to the first 30 days of the rental of the specific vehicle identified in the Rental Agreement. Subsequent rental agreements which become a part of the initial rental agreement in accordance with the conditions of the Consecutive Rentals Addendum do not constitute a renewal for purposes of the imposition of the rental car surcharge.

In accordance with Rule 12A-16.001, F.A.C., the rental car surcharge is administered in accordance with the sales and use tax rules and regulations (Chapter 12A-1, F.A.C.). Specifically, Rule 12A-1.014, F.A.C., provides that in the event a dealer erroneously collects tax from a customer, the customer

must request a refund or credit from the dealer. Once the dealer has credited or refunded the tax to a customer, the dealer is then entitled to request a refund from the Department of Revenue or to take a credit on a subsequent return within 36 months of the date on which the dealer remitted the tax. Therefore, Taxpayer may be allowed a credit of any rental car surcharge credited or refunded to a customer with respect to the rental agreements which are the subject of this TAA and in accordance with Rule 12A-1.014, F.A.C.

This response constitutes a Technical Assistance Advisement under s. 213.22, F.S., which is binding on the Department only under the facts and circumstances described in the request for this advice as specified in s. 213.22, F.S. Our response is predicated on those facts and the specific situation summarized above. You are advised that subsequent statutory or administrative rule changes or judicial interpretations of the statutes or rules upon which this advice is based may subject similar future transactions to a different treatment than expressed in this response.

You are further advised that this response and your request are public records under Chapter 119, F.S., which are subject to disclosure to the public under the conditions of s. 213.22, F.S. Your name, address, and any other details which might lead to identification of the taxpayer must be deleted by the Department before disclosure. In an effort to protect the confidentiality of such information, we request you notify the undersigned in writing within 15 days of any deletions you wish made to the request or the response.

Sincerely,

Sharon Gallops
Senior Tax Specialist

SG/pb
Cont. 21177