Must a peer-to-peer car-sharing platform collect Texas motor vehicle gross rental receipts tax on vehicles owned by its hosts?

Plain-English summary

The Texas Comptroller ruled that a peer-to-peer car-sharing platform did not have to collect or remit motor vehicle gross rental receipts tax for cars listed by individual hosts.

The platform provided the technology, took the guest's payment, and distributed proceeds to the host after the sharing period, but it owned none of the vehicles. Under Chapter 152, the tax-collection duty belonged to the motor vehicle's owner. Because the platform was not named on the certificates of title and did not hold the vehicles for re-rental, it was not the statutory owner.

The tax did not disappear. Each host who owned a vehicle rented in Texas had to obtain a Texas Motor Vehicle Rental Permit and collect and remit gross rental receipts tax on that vehicle's rental.

What this means for you

Peer-to-peer car-sharing platforms

On these facts, processing payment and matching hosts with guests did not make the platform the vehicle owner responsible for Chapter 152 tax. The title and re-rental definitions controlled.

Vehicle owners listing cars

The ruling places the compliance obligation on you as the titled owner: obtain the rental permit and collect and remit tax on rentals in Texas, even when a platform handles booking and payment.

Accountants and tax professionals

Separate the platform's service role from statutory vehicle ownership. Section 152.001(9) covers the person named on title and a person with exclusive use under a rental who holds the vehicle for re-rental.

Common questions

Q: Did the platform's receipt of the guest's payment make it liable?

A: No. The ruling focused on ownership. The platform accepted payment and paid the host, but it was not named on the vehicle title and owned none of the listed cars.

Q: Who must collect the tax?

A: The host who owns the vehicle must obtain a Texas Motor Vehicle Rental Permit and collect and remit gross rental receipts tax.

Q: How long can an agreement last and still be a "rental" under the cited definition?

A: Section 152.001(5) includes an owner's agreement to make a vehicle available to another person for up to 180 days.

Q: Can another platform rely on this ruling?

A: No. This private letter ruling binds the Comptroller only for the requesting taxpayer and stated facts. A platform that owns vehicles or holds them for re-rental may have a different result.

Citations and references

• Tex. Tax Code §§ 152.001(5), (9), 152.045
• Tex. Tax Code ch. 152
• 34 Tex. Admin. Code Rules 3.1 and 3.10

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=MVT
• Opinion: https://star.comptroller.texas.gov/view/202207023L

Original ruling text

July 15, 2022

RE: Private Letter Ruling No. PLR20220524125452

Dear **:

We issue this private letter ruling in accordance with Rule 3.1, Private Letter Rulings and General Information Letters. [ENDNOTE 1] We are responding to your request dated May 20, 2022. Detrimental reliance relief is provided in accordance with Rule 3.10, Taxpayer Bill of Rights.

You requested guidance on whether COMPANY A (Taxpayer) is responsible for collecting and remitting motor vehicle gross rental receipts tax imposed by Texas Tax Code Chapter 152 (Tax on Sale, Rental, and Use of Motor Vehicles).

Facts Presented

Taxpayer is a peer-to-peer car sharing platform headquartered in CITY, California.

Taxpayer operates a technology platform that enables vehicle owners (“hosts”) to list their personal vehicles as available for sharing. Those interested in temporarily using a vehicle (“guests”) can use the platform to identify available vehicles. The host and guest then agree on a daily price for the use of the car and set a fixed period for the use of the car (“car sharing period”). Taxpayer accepts payment from the guest and distributes proceeds to hosts after the conclusion of the car sharing period.

Taxpayer does not own any vehicles that appear on its platform.

Question

Is Taxpayer responsible for collecting and remitting the gross rental receipts tax imposed by Texas Tax Code Chapter 152?

Ruling

Taxpayer is not responsible for collecting and remitting the gross rental receipts tax imposed by Texas Tax Code Chapter 152. However, the owner of the motor vehicle is required to obtain a Texas Motor Vehicle Rental Permit and remit gross rental receipts tax on the rental of any motor vehicle rented in Texas.

Analysis

A tax is imposed on the gross receipts from a rental of a rented motor vehicle. The owner of the motor vehicle is subject to collecting and remitting the tax.

Section 152.001(5) (Definitions) defines “rental” to mean an agreement by the owner of the motor vehicle to make the vehicle available to another for a period of up to 180 days; an agreement by the original manufacturer of a motor vehicle to give exclusive use of the motor vehicle to another for consideration; or an agreement to give exclusive use of a motor vehicle to another for re-rental purposes.

Section 152.001(9) defines “owner of a motor vehicle” to mean a person named on the certificate of title as the owner of the vehicle or a person who has the exclusive use of a motor vehicle by reason of a rental and holds the vehicle for re-rental.

Taxpayer is not named on the certificate of title; therefore, Taxpayer is not the owner of any of the vehicles available on the platform and is not required to collect and remit gross rental receipts tax under Section 152.045 (Collection of Tax on Gross Rental Receipts).

The hosts are the owners of the motor vehicles listed on the platform and are required to collect and remit tax on gross rental receipts received for the rental of a motor vehicle, as required by Section 152.045.

The Texas Tax Code and Texas Administrative Code are accessible at: www.comptroller.texas.gov/taxes/.

If you have questions about this private letter ruling, please email us through our website at https://comptroller.texas.gov/web-forms/tax-help/ and reference Private Letter Ruling No. PLR20220524125452

Sincerely,

Tax Policy Division –Indirect Taxes

Texas Comptroller of Public Accounts

ENDNOTE

1. Unless otherwise indicated, all references to “Section” are to the Texas Tax Code, and all references to “Rule” are to Title 34 of the Texas Administrative Code.