Who owed Florida's rental car surcharge, battery fee, and waste tire fee when a dealer originated a vehicle lease and assigned it to a leasing company?

Plain-English summary

Florida made the originating automobile dealer responsible for the first 30-day rental car surcharge and the initial battery and waste tire fees.

The customer negotiated and signed the lease at the dealership and paid the first month's rent there before the leasing company decided whether to accept assignment. Because the surcharge became due with that first rent payment, the dealer owed a full 30-day surcharge even when the first month was shorter than 30 days.

The dealer also owed the lead-acid battery and waste tire fees when it first leased the vehicle. On the later sale and assignment to the leasing company, the tires were no longer new, so no second tire fee applied. The company could avoid a second battery fee by giving the dealer a resale certificate covering the battery.

What this means for you

• Liability followed the transaction occurring when each fee became due.
• The first month's rental car surcharge belonged to the originating dealer.
• Used tires did not trigger another new-tire fee on assignment.
• A resale certificate prevented a second battery fee on the vehicle sale to the assignee.

Common questions

Q: Who owed the rental car surcharge?
A: The originating dealer, for 30 days.

Q: Who owed the first battery and tire fees?
A: The dealer that first leased the vehicle to the customer.

Q: Did the leasing company owe those fees again?
A: No second tire fee applied, and no second battery fee applied if the company gave a resale certificate.

Citations and references

• Fla. Stat. § 212.0606(1) — rental car surcharge
• Fla. Stat. § 403.718(1) — waste tire fee
• Fla. Stat. § 403.7185(1) — lead-acid battery fee
• Fla. Admin. Code r. 12A-12.001 — waste tire fee
• Fla. Admin. Code r. 12A-12.0011 — lead-acid battery fee
• Fla. Admin. Code r. 12A-16.002 — rental car surcharge
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 96A-032

Original ruling text

Apr 30, 1996

Re: TAA 96A-032
Sales and Use Tax; Leased Vehicles; Rental Car Surcharge;
Solid Waste Fees.
Sections 212.0606(1), 403.718(1), and 403.7185(1), Florida
Statutes.
Rules 12A-12.001, 12A-12.0011, and 12A-16.002, Florida
Administrative Code

Dear :

This is a response to your letter dated September 13, 1995,
in which you requested a Technical Assistance Advisement (TAA)
regarding the application of the rental car surcharge and solid
waste disposal fees to leased vehicles. Your initial letter did
not provide enough information for the issuance of a TAA.
However, your letter of November 20, 1995, provided the
additional information needed. Thus, this response to your
request constitutes a Technical Assistance Advisement under
Chapter 12-11, Florida Administrative Code, and is issued to you
under the authority of Section 213.22, Florida Statutes.

FACTS

In your letter you state that the transaction in question
begins when a potential customer contacts an independent Florida
automobile dealer about leasing a vehicle. Negotiations between
the parties are held at the dealership. The related paperwork
is signed at the dealership, and the customer makes the initial
payment there. You have stated that the initial payment
includes the first month's rent and security deposit as well as
the title and registration fees. This payment is made directly
to the dealer.

After the lease has been formed, the dealer contacts your
company, XXXX (hereinafter "Company"), to assign the lease.
Company reviews the lease, and if it accepts the assignment,

remits payment for the vehicle to the dealership.

REQUESTED ADVISEMENT

You ask whether the dealership or Company is responsible
for remitting the rental car surcharge, lead-acid battery and
waste tire fees to the State of Florida.

APPLICABLE AUTHORITY

Section 212.0606(1), Florida Statutes, provides:

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.

Section 403.718(1), F.S., provides in part:

For the privilege of engaging in business, a fee for each
new motor vehicle tire sold at retail is imposed on any
person engaging in the business of making retail sales of
new motor vehicle tires within this state.... The fee
imposed under this section shall be stated separately on
the invoice to the purchaser. Beginning January 1, 1990,
and thereafter, such fee shall be imposed at the rate of $1
for each new tire sold.... For purposes of this section, a
motor vehicle tire sold at retail includes such tires when
sold as a component part of a motor vehicle....

Section 403.7185(1), F.S., provides in part:

For the privilege of engaging in business, a fee for each
lead-acid battery sold at retail is imposed on any person
engaging in the business of making retail sales of leadacid batteries within this state. Beginning October 1,
1989, and thereafter, such fee shall be imposed at the rate

of $1.50 for each lead-acid battery sold....

Rule 12A-12.001, F.A.C., provides in part:

(1) For the privilege of engaging in business, a fee for
each new motor vehicle tire sold at retail in this state is
imposed at the rate of 50 cents for each new tire sold
during 1989 and at the rate of $1 for each new tire sold
during 1990 and subsequent years.

(2) The fee is imposed upon the dealer selling the tire and
not upon the purchaser.

(3) The fee is required to be stated separately on the
sales invoice or other tangible evidence of sale given to
the purchaser.

(4) The fee is to be included in the price upon which sales
or use tax or any other tax imposed by part I of chapter
212, Florida Statutes, is computed, even though the fee is
listed as a separate item on the invoice.

(5) For purposes of this rule:

(a) "Tire" means a continuous solid or pneumatic rubber
covering encircling the wheel of a motor vehicle.
(b) "Vehicle" means a mechanism or device in, upon, or by
which a person or property is or may be transported....

(d) "New tire" is one that has never been used in the
movement of a motor vehicle, regardless of the time that
has elapsed since it was manufactured, offered for sale,
sold, or the time during which it was used as a spare tire.
A tire is not "new" for purposes of this rule if it has
been so used, including a tire that has been used but has
been recapped or retreaded.

(e) The terms "sold at retail" and "retail sales" include
the sale of a new motor vehicle tire as a separate item or
the sale of the tire as a component part of a new or used
motor vehicle that is sold at retail. However, they do not

include the sale of new motor vehicle tires to a person
solely for the purpose of resale, as provided in subsection
(6)....

Rule 12A-12.0011, F.A.C., provides in part:

(1)(a) For the privilege of engaging in business, a fee at
the rate of $1.50 for each lead-acid battery sold at retail
in this state is imposed on each person engaging in the
business of making retail sales of lead-acid batteries
within this state.

(b) The fee is payable on such a sale whether the battery
is new, used, or remanufactured.

(c) The fee is payable if the battery is sold as a
component part of a motor vehicle, vessel, or aircraft or
other property.

(d) Notwithstanding paragraphs (a) and (b), the fee is not
payable if the battery is sold to recycle components.

(2) The fee is imposed upon the dealer selling the battery
and not upon the purchaser....

(6) For purposes of this rule:

(a) A "lead-acid battery" is a storage or secondary battery
containing lead plates that will function as a battery when
the electrolyte is added, and that is designed for use in
motor vehicles, vessels, and aircraft.

(b) "Motor vehicle" means an automobile....

(c) The term "sale" means and includes any transfer of
title or possession, or both, exchange, barter, license,
lease, or rental, conditional or otherwise, in any manner
or by any means whatsoever, of a lead-acid battery for a
consideration.

(d) The term "sold at retail" includes the sale of a lead-

acid battery as a separate item or as a component part of a
new or used motor vehicle, vessel, aircraft, or other
machinery or equipment that contains a battery designed for
use in a motor vehicle, vessel, or aircraft. The terms
"sold at retail" does not include the sale of a lead-acid
battery to a person solely for the purpose of resale, as
provided in subsection (7), or the sale of a lead-acid
battery for the purpose of recycling its component
parts....

(7)(a) The sale of a lead-acid battery to a person solely
for the purpose of resale is not a "sale at retail", as
defined in paragraph (6)(d), provided the seller shall have
taken from the purchaser a sales tax resale certificate to
the effect that the battery was purchased for resale. A
resale certificate given to the seller for sales tax
purposes will also be sufficient evidence that the sale was
not a retail sale for purposes of the fee....

(c) A sale to a leasing company of a lead-acid battery or
vehicle or machinery of which the lead-acid battery is a
component part is not a retail sale for purposes of the
fee, if the purchaser gives the seller a sales tax resale
certificate. Instead, the fee is payable by the leasing
company when it first puts the vehicle into use in this
state....

Rule 12A-16.002, F.A.C., provides in part:

(1)(a)1. The lease or rental in Florida of a for hire
passenger motor vehicle is subject to a surcharge of $2.00
per day, or any part thereof, regardless of whether the
vehicle is licensed in Florida. For the purposes of this
rule, one day is defined as 24 consecutive hours.

2. The term "for hire passenger motor vehicle" means any
   automobile designed to carry fewer than nine (9) passengers
   let or rented to another for consideration; offered for
   lease or rent as a means of transportation for
   compensation; advertised; or generally held out as being
   for lease or rent. The term "for hire passenger motor

vehicle" does not include any motorcycle, moped, truck,
truck trailer, travel trailer, camping trailer,
recreational vehicle with living facilities, or van
conversion.

(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....

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....

(3)(a) Each person engaged in the business of leasing or
renting for hire passenger motor vehicles is required to
collect and remit the surcharge.

(b) The surcharge is due and payable when the lease or
rental payments are to be made by the lessee or renter as
they accrue under the terms of the lease or rental
agreement....

(d)1. When the term of a lease or rental is for twelve (12)
months or more and the vehicle is leased or rented in
Florida, the surcharge is due and payable when the vehicle
is registered, licensed, or titled in this state,
regardless of where the vehicle is to be used.

2. When the term of a lease or rental is for twelve (12)
   months or more and the vehicle is leased or rented from a
   person outside this state, it is presumed subject to the
   surcharge if it is registered, licensed, or titled in this

state. This presumption may be rebutted only by
documentary evidence that the vehicle was used outside this
state continuously for thirty (30) days or more before it
was brought into this state....

DISCUSSION

Under Section 212.0606(1), Florida Statutes, the rental car
surcharge applies to only the first 30 days on any subject lease
or rental. Rule 12A-16.002(3)(b), Florida Administrative Code,
states that the surcharge is due and payable when the rental
payment from the lessee or renter is due.

Under the facts you presented, the first month's rent
(which is assumed to be the first 30 days' rent) is paid
directly to the dealership before Company is even offered the
opportunity to assume the lease. Thus, it is the dealership, as
the lessor of the vehicle at the time the rental car surcharge
becomes due, which is responsible for remitting the surcharge.
Since the first month's rent is assumed to cover a thirty day
period, the dealer is responsible for remitting a surcharge
which covers 30 days, even if the first month's rent covers less
than thirty days. That is, even if the lease is entered into
during the month of February, the dealer is responsible for
remitting the full 30 days surcharge.

The lead-acid battery fee applies to each sale of a leadacid battery, even if the battery is "used". Rule 12A12.0011(1)(b), F.A.C. "The term `sale' means and includes any
transfer of title or possession, or both, exchange, barter,
license, lease, or rental...." Rule 12A-12.0011(6)(c), F.A.C.
Thus, when the dealership first leases the battery to the
customer as a component part of the motor vehicle, the
dealership will need to remit the lead-acid battery fee. When
the car is subsequently sold to Company, as part of the
transaction involving the assumption of the lease, Company
should issue a resale certificate covering the lead-acid battery
fee to dealership as provided for in Rule 12A-12.0011(7), F.A.C.
Since the lead-acid battery fee will have already been remitted
on the lease of the entire vehicle to customer, Company will not
need to remit the lead-acid battery fee on the assumed lease.

Section 403.718(1), F.S., only imposes a fee on the sale of
new tires. Rule 12A-12.001(5)(d), F.A.C., states that a new
tire is one which "has never been used in the movement of a
motor vehicle." Thus, when dealership first leases the car to
the customer it must remit the waste tire fee on the tires
included as component parts of that vehicle. When the car is
subsequently sold to Company, as part of the transaction
involving the assumption of the lease, the tires have already
been used by the customer. Thus, they are no longer "new" tires
and the waste tire fee will not apply to that transaction.
Thus, the waste tire fee should be remitted only once by the
dealership upon the leasing of the vehicle to customer.

CONCLUSION

Under the facts presented, the dealership is responsible
for remitting the rental car surcharge on the first month's
lease of the vehicle. The dealership is also responsible for
remitting the lead-acid battery fee and waste tire fee due on
the lease to the customer. Finally, unless the dealership has
received a certificate of resale from Company covering the leadacid battery, a second lead-acid battery fee will need to be
charged on the sale of the vehicle to Company.

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 confidential
information, we request you notify the undersigned in writing
within 15 days of any deletions you wish made to the request or
this response.

Sincerely,

Kama Schultz
Senior Tax Specialist

KDS
Control No. 24051