What procedures did Texas's Motor Vehicle Rental Tax Guide prescribe for rental businesses beginning September 1, 1977?

Plain-English summary

This 1977 Texas Motor Vehicle Rental Tax Guide established a comprehensive paper-era system for rental businesses.

It defined motor vehicles, rentals, leases, owners, and retailers; required qualifying rental businesses to register and file returns; and described tax-free vehicle registration through a retailer permit and rental certificate.

The guide also covered trade-ins and fair-market-value deductions, vehicle-by-vehicle minimum gross rental receipts tax, taxable and exempt receipts, public-agency and religious rentals, re-rental, bad debts, reimbursement, exemption and verification certificates, retired vehicles, returns, penalties, and recordkeeping.

Its procedures were effective September 1, 1977. The document includes obsolete 4% rates, paper forms, a five-vehicle threshold, historical exemptions and penalties, and numerous former statutory citations. It should not be used as a current compliance guide.

What this means for you

Vehicle rental companies and lessors

This source explains the structure of Texas's 1977 rental-tax administration but not today's obligations.

Fleet accountants and tax researchers

The guide is useful for interpreting same-era rulings that refer to minimum tax, rental certificates, fair-market-value deductions, or verification forms.

Common questions

Q: Is this a taxpayer-specific ruling?

A: No. It is a general tax guide.

Q: Are its rates and forms current?

A: No current status is established, and many are plainly historical.

Q: Why preserve it?

A: It provides the administrative context for Texas rental-tax documents from the late 1970s.

Citations and references

• TEX. TAX-GEN. ANN. arts. 20.01, 6.01(6), 6.05(1), and 1.12 — historical citations in the guide.
• Texas Revised Civil Statutes art. 6686 — historical dealer-license citation.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=MVT
• Opinion: https://star.comptroller.texas.gov/view/7803L2022A02

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN 78774

Motor Vehicle Rental Tax Guide

PREFACE

Introduction

Listed below are terms with specific definitions that must
be understood before the procedure outlined in this Motor
Vehicle Rental Tax Guide can be applied to your motor
vehicle rental business.

Effective Date

The information and procedures in this guide are effective
September 1, 1977. any rental transactions prior to this
date are subject to prior rental procedures.

Motor Vehicle

The term motor vehicle means every self-propelled vehicle in
or by which any person or property is or may be transported
upon a public highway, including trailers and semi-trailers,
and also including house trailers as such term is defined by
the Certificate of Title Act. It shall not mean any device
moved only by human power or used exclusively upon stationary
rails or tracks and shall not include farm machinery or farm
trailers or road-building machinery or any self-propelled
vehicle used exclusively to move any of the three (3) imme-
diately preceding vehicles.

Rental or Renting

The term rental or renting means the agreeing by the owner
to give exclusive use of a motor vehicle to another for a
consideration and for a period of time not to exceed 180
days under any one agreement.

This term also includes

• an agreement by an original manufacturer of motor
  vehicles to give exclusive use of a motor vehicle to
  another for a consideration regardless of the period
  of time covered by the agreement, and

• an agreement to give exclusive use of a motor vehicle
  to another for re-rental regardless of the period of
  time covered by the agreement.

Lease or Leasing

The term lease or leasing is the agreeing by the owner to
give exclusive use of a motor vehicle to another for a con-
sideration and for a period of time exceeding 180 days
under such agreement.

This term does not include

• an agreement by an original manufacturer to give ex-
  clusive use of a motor vehicle to another for a consi-
  deration regardless of the period of time covered by
  the agreement, or

• an agreement to give exclusive use of a motor vehicle
  to another for re-rental regardless of the period of
  time covered by the agreement.

Owner

Owner of a motor vehicle means:

• a person named in the certificate of title of the ve-
  hicle as the owner; or

• a person having the exclusive use of a vehicle by
  reason of a rental and who holds the motor vehicle for
  re-rental.

Person

The term person includes individuals, firms, corporations,
and associations.

REGISTERING AS A RETAILER

Introduction

A person renting a motor vehicle must register as a re-
tailer with the State Comptroller by completing a Motor Ve-
hicle Rental Tax Application.

Registering as a Retailer

Registering as a retailer applies to:

• a person who gives exclusive use of a motor vehicle to
  another for a consideration and for a period not to
  exceed 180 days,

• an original manufacturer of motor vehicles giving ex-
  clusive use of a motor vehicle to another for a consi-
  deration regardless of the period of time covered by
  the agreement, and

• a person giving exclusive use of a motor vehicle to
  another for re-rental regardless of the period of time
  covered by the agreement.

NOTE: This applies to leases for more than 180 days
when the vehicle is used for rental purposes.

Requirements of a Retailer

A person renting motor vehicles must:

• register as a retailer with the State Comptroller by
  completing the Motor Vehicle Rental Tax Application,

• collect gross rental receipts tax when renting a motor
  vehicle, and

• file Motor Vehicle Rental Tax Returns with the State
  Comptroller.

Qualifying for the Permit

The qualifications for a Motor Vehicle Retailer's Permit
are:

• be an authorized Texas Automobile Dealer licensed pur-
  suant to the provisions of Article 6686, Revised Civil
  Statutes of Texas, 1925, as amended, or

• be the title owner of at least five (5) different
  motor vehicles that will be rented within the next
  twelve (12) month period.

Procedure

If... Then...

you qualify * the Motor Vehicle Retailer's Permit
will be issued at no charge and

• you may register motor vehicles tax
  free for rental by completing the
  Motor Vehicle Rental Certificate,
  Form 2C00-2.10.

you do not * the Motor Vehicle Retailer's Permit
qualify will not be issued,

• you cannot register motor vehicles tax
  free for rental purposes, and

• the Motor Vehicle Retailer's Permit
  will be issued upon reapplying and
  qualifying at a later date.

Use of a Permit

The Motor Vehicle Retailer's Permit allows tax free regis-
tration of motor vehicles for rental purposes.

Direct Pay Permits

Direct pay permits held under TEX. TAX.-GEN. ANN., Art.
20.01 of the Limited Sales, Excise and Use Tax Act, may not
be used to pay Motor Vehicle Rental Tax under Chapter 6,
the Motor Vehicle Retail Sales and Use Tax Law.

TAX FREE REGISTRATION

Introduction

Upon qualifying for a Motor Retailer's Permit, you
are allowed to register motor vehicles tax free for rental
purposes.

How to Register Tax Free

Furnish the Tax Assessor-Collector a completed Motor Vehicle
Rental Certificate, Form 2C00-2.10, when making application
for a Texas title.

Joint Affidavit

The Motor Vehicle Rental Certificate has been combined with
the purchaser-seller joint affidavit which complies with
the statutory obligation of submitting a purchaser-seller
joint affidavit. Do NOT supply the Seller, Donor, or Trader's
Affidavit if using a Motor Vehicle Rental Certificate.

Penalty Article 6.05(1)

Any person who signs the joint affidavit knowing that it is
false in any material fact is guilty of a felony and upon
conviction is punishable by imprisonment for not more than
five (5) years nor less than two (2) years or by a fine of
not more than One Thousand Dollars ($1,000) or by both a
fine and imprisonment.

Rule

The Motor Vehicle Rental Certificate must be completed in
every detail including notarized signatures of purchaser and
seller.

Minimum Tax Liability

When the Motor Vehicle Rental Certificate is completed, the
minimum gross rental receipts tax liability is established
for the vehicle being registered. (See page 10.)

Rental Certificate

The Motor Vehicle Rental Certificate is supplied by the
Comptroller's Department and distributed through the County
Tax Assessor-Collector's Office.

Instructions

Detailed instructions for completion of the Motor Vehicle
Rental Certificate are on the reverse side of the form.

TRADE-IN OR REPLACED VEHICLE

Introduction

The tax liability on a motor vehicle being purchased for
rental may be reduced by

(a) the value of a trade-in vehicle or

(b) the fair market value of a replaced vehicle.

Definitions

(a) Trade-in vehicle is a motor vehicle that is traded to a
seller when purchasing a replacement vehicle.

(b) Replaced vehicle is a motor vehicle that is

• titled in the rental company name,
• retired from business or personal use, and
• offered for sale prior to being used as a fair
  market value deduction.

Rental Companies

• The fair market value deduction can be used by a person
  renting motor vehicles who holds a Motor Vehicle Retailer's
  Permit.

• The fair market value deduction cannot be used by a
  person renting motor vehicles who does not hold a Motor
  Vehicle Retailer's Permit.

Minimum Tax Liability

The minimum gross rental receipts tax liability is computed
on the difference between the purchase price and the trade-
in or fair market value deduction of the replaced vehicle.

FAIR MARKET VALUE

Introduction

Any person engaging in the business of making sales, rentals,
or leases of motor vehicles may deduct the fair market value
of a replaced vehicle from the total purchase price of a
replacement vehicle.

To Qualify - Rent or Lease

A rental or leasing company using the fair market value de-
duction of a replaced vehicle must:

• be regularly and actively engaged in renting or leasing
  motor vehicles as a primary function of his business and

• rent or lease at least five (5) different motor vehicles
  within any given twelve (12) month period.

Rental Companies

• The fair market value deduction can be used by a person
  renting motor vehicles who holds a Motor Vehicle Retailer's
  Permit.

• The fair market value deduction cannot be used by a person
  renting motor vehicles who does not hold a Motor Vehicle
  Retailer's Permit.

To Qualify - Sell

A seller of motor vehicles using the fair market value de-
duction of a replaced vehicle must:

• be regularly and actively engaged in selling motor
  vehicles as a primary function of his business and

• sell at least five (5) different motor vehicles acquired
  for the exclusive purpose of resale and not for use within
  any given twelve (12) month period.

Requirements of Vehicles

The replaced vehicle must be:

• titled in the name of the rental company, leasing
  company or seller,
• retired from business or personal use, and
• offered for sale prior to being used as a fair market
  value deduction.

The replacement vehicle must be:

• titled in the name of the rental company, leasing
  company, or seller and
• purchased for business or personal use.

Definition

Fair market value is the price a willing buyer who is under
no compulsion to purchase would pay a willing seller who is
under no compulsion to sell.

Determining Fair Market Value

If... Then...
a person qualifies for the fair market value is the
the fair market value price the willing seller
deduction and has sold received from the willing
the replaced vehicle buyer.
prior to the purchase
of the new vehicle,

a person qualifies for the fair market value of the
the fair market value replaced vehicle is the book
deduction and has not value of the vehicle on the
sold the replaced ve- title owner's books at the
hicle prior to the time the vehicle is retired
purchase of the new from business or personal use
vehicle, provided the owner's book
value is based on accepted
accounting principles.

Depreciated Value

If the State Comptroller of Public Accounts determines that
the owner's book value is not based on accepted accounting
principles, the fair market value shall be the total purchase
price of the vehicle, less depreciation at the rate of 2%
per month for the first 36 months from the date of purchase,
then at a rate of 1% per month for the remainder of the
depreciable life of the vehicle.

Computation Example of Depreciated Value

Purchase Price of Replacement Vehicle $6,000
Fair Market Value of Replaced Vehicle 4,400
(Original purchase price $5,000.
In service for 6 months at 2% per month.
$5,000 x 12% = $600
$5,000 - $600 = $4,400 Fair Market Value
of Replaced Vehicle.

Total Consideration of Replacement Vehicle $1,600

MINIMUM GROSS RENTAL RECEIPTS TAX

Introduction

A person holding a Motor Vehicle Retailer's Permit may
register rental vehicles tax free by completing the Motor
Vehicle Rental Certificate, Form 2C00-2.10. A portion of
this form contains the computation of the minimum gross
rental receipts tax.

Definition of Minimum Gross Rental Receipts Tax

The minimum gross rental receipts tax is the minimum tax
owed by the title owner of a rental vehicle which equals the
sales or use tax that would have been due if the vehicle
had not been registered tax free for rental purposes.

Establishing Minimum Tax

The minimum gross rental receipts tax liability is established
on a rental vehicle at the time the Motor Vehicle Rental
Certificate is completed and the vehicle is registered tax
free.

Computation of Minimum Tax

Original Purchase Price of Rental Vehicle $6,000

Less Trade-in or Fair Market Value
of Replaced Vehicle 4,400

Total Consideration $1,600

4% Sales or Use Tax Due $ 64
Less Sales or Use Tax paid to the
State of -0-

Total Tax Due if Rental Certificate had not been
furnished (MINIMUM GROSS RENTAL RECEIPTS TAX) $ 64

Responsibility

• The minimum gross rental receipts tax is the responsi-
  bility of the title owner and

• must be satisfied when the title owner ceases to use
  the vehicle for rental purposes.

GROSS RENTAL RECEIPTS

Introduction

Tax is collected on the gross rental receipts received from
the rental of a motor vehicle and reported to the State
Comptroller.

Definition of Gross Rental Receipts

Gross rental receipts is money or the value of property re-
ceived or promised as consideration to the owner of a motor
vehicle for the rental of the vehicle.

Tax Imposed

A 4% tax is imposed by Article 6.01(6) on the gross rental
receipts collected from the rental of a motor vehicle.

NOTE: City sales tax does not apply to motor vehicles
under the Motor Vehicle Tax Statutes.

Non-Taxable

Gross receipts tax is not due on:

• separately stated fees or charges for insurance,

• assessments for damages to the rental vehicle
  occurring during a rental agreement period,

• receipts for motor fuel sold by the owner of the
  vehicle if the receipts from motor fuel sales are
  separately stated as motor fuel receipts, and

• discounts.

Comment

All gross rental receipts reviewed are reported on line 6
as Gross Rental Receipts of the Motor Vehicle Rental Tax
Return filed with the State Comptroller and includes

• taxable rentals,

• tax free rentals (such as public agency, church,
  religious society, or a rent for re-rental), and

• gross receipts received when reimbursement is being
  made for a sales or use tax paid at registration.

Direct Pay Permits

Direct pay permits held under TEX. TAX.-GEN. ANN., Art.
20.01 of the Limited Sales, Excise and Use Tax Act, may not
be used to pay Motor Vehicle Rental Tax under Chapter 6,
the Motor Vehicle Retail Sales and Use Tax Law.

DEDUCTIONS

Introduction

The Motor Vehicle Rental Tax Return allows for exempt
rentals and reimbursement gross rentals in the Deductions
section.

Definition of Deduction

In the case of motor vehicle gross rental receipts, a
deduction is an amount that may be subtracted.

Public Agency

Rentals to a public agency are not subject to tax.

• A public agency is a:
• department
• commission
• board
• office
• institution
• agency
• of the State of Texas

or of a

• county
• city
• town
• school district
• hospital district
• water district
• special district or authority
• political subdivision
• created by or pursuant to the constitution
  or the statutes of this State.

or

• the unincorporated agencies and instrumentalities
  of the United States of America.

• The gross rental receipts received would be included in
  Gross Rental Receipts and also in Deductions, Exemptions,
  on line 6 of the return. (See Exemption Certificate, page 15.)

• The exempt tax on a rental to a public agency can be used
  as a credit toward satisfying the minimum gross rental
  receipts tax for the vehicle being rented.

Church or Religious Society

Rentals to a church or religious society are not subject to
tax so long as the vehicle being rented is:

(a) designed to carry more than six (6) passengers,
(b) has at least three (3) seats as wide as the interior of
the vehicle, and
(c) primarily used for providing transportation to and from
church or religious services or meetings. (Primary use
means use of a motor vehicle for at least 80% of the
vehicle's operating time.)

NOTE: This exemption does not apply to a vehicle registered
for the personal or official use of a minister.

• A church or religious society is a regularly organized
  group of people associating for the sole purpose of
  holding, conducting, and sponsoring, according to the
  rites of the sect, religious worship.

Supporting and encouraging religion as an incidental
purpose or the general purpose of furthering religious
work or instilling its membership with a religious
understanding is not sufficient to qualify an organi-
zation as a church or religious society.

• The gross rental receipts received would be included in
  Gross Rental Receipts and also in Deductions, Exemptions,
  on line 6 of the return. (See Exemption Certificate,
  page 15.)

• The exempt tax on a rental to a church or religious
  society can be used as a credit toward satisfying the
  minimum gross rental receipts tax for the vehicle being
  rented.

Rent for Re-rental

Rent for re-rental is not subject to tax.

• The amount received from the first rental of the vehicle
  would be included in Gross Rental Receipts and in Deductions,
  Exemptions, on line 6 of the return. (See Exemption Certifi-
  cate, page 15.)

• The tax is collected on the second rental (re-rental)
  of the vehicle.

• The title owner of a vehicle may credit the gross rental
  receipts tax collected and remitted to the State
  Comptroller on the re-rental of the vehicle against
  his minimum gross rental receipts tax liability. (See
  Verification Certificate, page 16.)

Bad Debts

• Any monies promised as payment of gross rental receipts
  on a rental contract are taxable and must be reported and
  remitted to the State Comptroller.

• There is no provision allowing for a deduction of gross
  rental receipts when an item is uncollectable.

Reimbursement Gross Rentals

A. Owned vehicles used for rental.

• When a motor vehicle upon which the motor vehicle
  sales and use tax has been paid is used for rental,
  the title owner may reimburse himself for the tax
  paid from the gross rental receipts tax received
  from renting the vehicle.

• The gross rental receipts received would be included
  in Gross Rental Receipts and also in Deductions,
  Reimbursement Gross Rentals, on line 6 of the return.

B. Rented or Leased vehicles used for rental.

• A person who rents or leases a motor vehicle for
  rental purposes and has contracted with and reimbursed
  the title owner for the sales and use tax paid at
  registration, may reimburse himself for the tax paid
  from the gross rental receipts tax collected.

• The gross rental receipts received would be included
  in Gross Rental Receipts and also in Deductions,
  Reimbursement Gross Rentals, on line 6 of the return.

NOTE: See Verification Certificate and Records for
additional information.

Verification Certificate

A title owner may contract for and receive reimbursement for
Motor Vehicle Sales and Use Tax paid at registration on a
rental vehicle. The total reimbursement may not exceed the
amount of sales and use tax paid.

• The Motor Vehicle Verification Certificate for Rental
  Tax may be completed by the title owner and furnished
  the renter for his records.

EXEMPTION CERTIFICATE

Introduction

The Motor Vehicle Rental Exemption Certificate is a document
to validate a tax exempt rental.

Requirements

The exemption certificate must be:

• signed by an authorized representative of a
• public agency,
• church or religious society, or

• renter renting for re-rental and

• attached to the rental contract.

Exemption Certificate

An example of the exemption certificate is furnished by the
State Comptroller for duplication by the user.

Burden of Proof

If the exemption certificate is not used, the burden of
proving the rental was exempt rests with the owner.

Rule

The exemption certificate cannot be used to register a
motor vehicle tax free.

VERIFICATION CERTIFICATE

Introduction

The Motor Vehicle Verification Certificate for Rental Tax is
a three section document to validate a claim for credit.

Example Section I

Rent for Re-Rental: Verification of Gross Rental Receipts
Tax Collected in Texas

SECTION I:RENT FOR RE-RENTAL: VERIFICATION OF GROSS RENTAL RECEIPTS TAX
COLLECTED IN TEXAS
to be completed by renter re-renting a motor vehicle and furnished title
owner of motor
vehicle. Indicate the total amount of gross rental receipts tax collected
and remitted to
the State Comptroller. The amount can be used as a credit toward
satisfying the minimum
gross rental receipts tax liability of the title owner. THIS CERTIFICATE
IS RETAINED BY
TITLE OWNER.
Make of Vehicle Motor or Vehicle
Identification No.
Year Model Body Style License
No.
I certify that I collected and remitted gross rental receipts tax in the
amount of $ to the State Comptroller of Texas on the re-rental of
the motor vehicle
described above for the period through
.

I UNDERSTAND THAT ALL INFORMATION PROVIDED BY ME ON THIS CERTIFICATE IS
SUBJECT TO THE FRAUDULENT REPORT PROVISIONS OF TEX. TAX.-GEN. ANN. art. 1.12
(1969). A VIOLATION OF WHICH CONSTITUTES A FELONY.
Renter for Re-rental (Name) sign
here
Address (Street and Number or P.O. Box)

City, State, Zip Code

• Renter signs Section I of the verification certificate for title
  owner's re-
  cords documenting the amount of gross rental receipts tax collected and
  remitted
  to the Comptroller on the re-rental of the motor vehicle.

• When this section is furnished, the title owner can credit the gross
  rental
  receipts tax collected and remitted to the State Comptroller against the
  minimum
  gross rental receipts tax liability for the vehicle.

• The credit is applied when the title owner ceases to use the vehicle
  for rental
  purposes, and the vehicle is listed on the Supplement to Motor Vehicle
  Rental
  Tax Return.

Example Section II

Reimbursement of Sales or Use Tax Verification

SECTION II. REIMBURSEMENT OF SALES OR USE TAX VERIFICATION

To be completed by title owner when a vehicle is rented for re-rental and
the renter
reimburses the owner for the sales or use tax paid at registration. THIS
CERTIFICATE IS
RETAINED BY THE RENTER.
Make of Vehicle Motor or Vehicle Identification
no.
Year Model Body Style
License No.
I certify that I paid sales or use tax in the amount of $
at the time of
registration on the above described motor vehicle, that I have collected
gross rental
receipts tax in the amount of $ on the gross rental receipts
received from
renting the above described motor vehicle, and that I have contracted and
received
reimbursement in the amount of $ from
Renter Address (Street & NO., City, State, Zip
Code)

I UNDERSTAND THAT ALL INFORMATION PROVIDED BY ME ON THIS CERTIFICATE IS
SUBJECT TO THE
FRAUDULENT REPORT PROVISIONS OF TEX. TAX.-GEN.ANN. art. 1.12 (1969), A
VIOLATION OF WHICH
CONSTITUTES A FELONY.
Vehicle Owner sign
here
Address (Street and Number or P.O. Box)

City, State, Zip Code

• Section II documents renter's records and is furnished renter by the
  title
  owner.

• The title owner may contract with the renter for reimbursement of motor
  vehicle
  sales and use tax paid at registration. The total reimbursement may not
  exceed
  the amount of sales and use tax paid.

• The contract must show:

• the sales or use tax paid at registration,

• the gross rental receipts tax collected on rental of the vehicle, and

• the amount received as reimbursement from the renter.

• When the verification certificate is used to document reimbursement for
  sales
  and use tax paid at registration, then the renter can reimburse himself
  for the
  sales and use tax paid to the title owner from the gross rental receipts
  tax
  collected from the re-rental of the motor vehicle.

Example Verification of Rental Tax Collected and
Remitted to Another
Section III State

SECTION III. VERIFICATION OF RENTAL TAX COLLECTED AND REMITTED TO ANOTHER
STATE
To be completed by the title owner or authorized agent when a motor
vehicle subject to the minimum gross rental receipts tax liability has been
used for rental purposes in another state. The rental tax collected and
remitted to another state can be used as a credit toward satisfying the minimum
tax liability in Texas. THIS CERTIFICATE IS RETAINED BY THE TITLE OWNER.
Make of Vehicle Motor or Vehicle
Identification No.
Year Model Body Style
License No.
I certify that I collected and remitted state rental tax in the amount of
$ to the
state of on the rental of the motor vehicle
described above for the period
of through .

I UNDERSTAND THAT ALL INFORMATION PROVIDED BY ME ON THIS CERTIFICATE IS
SUBJECT TO THE FRAUDULENT REPORT PROVISIONS OF TEX. TAX.-GEN. ANN. art. 1.12
(1969), A VIOLATION OF WHICH CONSTITUTES A FELONY.
Title Owner or Authorized Agent sign
here
Address (Street and Number or P.O. Box)

City, State, Zip Code

• Section III supports title owner's records documenting rental tax paid
  out of
  state on a vehicle subject to minimum gross rental receipts tax.

• When the verification certificate is used to document rental tax paid
  out of
  state

• the title owner can credit the amount of gross rental receipts tax he
  paid
  out of state against his minimum gross rental receipts tax liability.

• The credit is applied when the title owner ceases to use the vehicle
  for
  rental purposes and the vehicle is listed on the Supplement to Motor Ve-
  hicle Rental Tax Return.

Requirements

• Proper section must be completed and signed.

• Must be retained by person claiming credit.

Verification Certificate

An example of the verification certificate is furnished by
the State Comptroller for duplication by the user.

Burden of Proof

If the verification certificate is not used, then the burden
of proof rests with the person claiming credit.

Rule

The verification certificate cannot be used to register a
motor vehicle tax free.

VEHICLES THAT CEASE TO BE USED FOR RENTAL

Introduction

A title owner who ceases to use a motor vehicle for rental
purposes must list the vehicle on the Supplement to Motor
Vehicle Rental Tax Return. The supplement is attached to
the next Motor Vehicle Rental Tax Return required to be
filed.

Minimum Gross Rental Receipts Tax

The minimum gross rental receipts tax liability is the re-
sponsibility of and must be satisfied by the title owner
for each vehicle listed on the supplement.

Credit

• Credit is not transferable to other vehicles.

• Credit amount would never be shown in column 11 of
  the supplement.

Total Due

The amount due on the supplement is carried forward to
line 16 of the Motor Vehicle Rental Tax Return.

Instructions

Detailed instructions are on the reverse side of the Supple-
ment to Motor Vehicle Rental Tax Return.

SATISFYING MINIMUM GROSS RENTAL RECEIPTS TAX

Procedure for Satisfying Minimum Gross Rental Receipts Tax

Step Procedure
List all vehicles you own that cease to be used
1 for rental on the Supplement to Motor Vehicle
Rental Tax Return, Form 2C00-2.99.

Enter the amount of minimum gross rental
2 receipts tax for each vehicle listed, column 9.

Enter the amount of gross rental receipts tax
3 collected and remitted to the Comptroller on
the rental of the vehicle, column 10. (See
"Gross Rental Receipts Tax Consists of:" and
"Computation of Rental Tax Collected", page 22.)

4 If... Then...
the gross rental re- the minimum gross
ceipts tax collected rental receipts tax
and remitted to the liability has been
Comptroller is equal satisfied, and no ad-
to or greater than ditional tax is due
the minimum gross on the vehicle. En-
rental receipts tax, ter zero (0) in
column 11 of the
supplement.

the gross rental re- the difference is en-
ceipts tax collected tered in column 11 of
and remitted to the the supplement. The
Comptroller is less difference is the un-
than the minimum remitted portion of
gross rental minimum gross rental
receipts tax, receipts tax.

Total column 11 and enter the total on line 16
5 of the Motor Vehicle Rental Tax Return.

When the computation section of the return has
6 been completed, the supplement and remittance
attached to the return and all three forwarded
to the State Comptroller, the minimum gross
rental receipts tax liability has been satisfied.

Exceptions
If... Then...
tax was paid on the (1) identify the vehicle in
rental vehicle at columns 4, 5, and 6 of the
registration Supplement,
(2) enter the amount of tax paid
in column 8, and
(3) enter zero (0) in columns
9 and 11.

a rental vehicle is (1) identify the vehicle in
destroyed or stolen columns 4, 5, and 6 of the
and not recovered Supplement,
(2) enter zero (0) in columns
9 and 11, and
(3) enter "destroyed" or "stolen"
in column 12.

the required sales (1) identify the vehicle in
or use tax due and columns 4, 5, and 6 of the
payable on a rental Supplement,
vehicle equals (2) enter zero (0) in columns
zero (0) 8, 9, and 11, and
(3) give an explanation in
column 12.

Credit

In satisfying the minimum gross rental receipts tax credit
cannot be transferred to other vehicles. A credit amount
would never be entered in Column 11 of the Supplement.

Rule

Any vehicle you own that ceases to be used for rental pur-
poses must be listed on the Supplement to Motor Vehicle
Rental Tax Return. The Supplement and remittance are
attached to the Motor Vehicle Rental Tax Return and filed
with the State Comptroller.

Gross Rental Receipts tax

For purposes of satisfying minimum gross rental receipts
tax, gross rental receipts tax collected shall consist of:

• tax collected and remitted to the Comptroller on re-
  turns required to be filed,

• The exempt tax on rentals to a public agency, church,
  or religious society,

• gross rental receipts tax collected and remitted by a
  title owner to any other state on the rental of a
  vehicle, and

• gross rental receipts tax collected on the re-rental
  of a motor vehicle.

• The title owner of a vehicle may credit the gross
  rental receipts tax collected on the re-rental
  of a vehicle against his minimum gross rental
  receipts tax liability.

• The person re-renting the vehicle may furnish
  the title owner with a Motor Vehicle Verification
  Certificate for Rental Tax showing the tax
  collected and remitted to the State Comptroller.
  (See Verification Certificate, page 16.)

Computation of Rental Tax Collected

MINIMUM GROSS RENTAL RECEIPTS TAX for vehicles $64.00

Reported rental tax during life of rental vehicle $30.00

Exempt rentals ($200) receipts x 4%) 8.00
(Tax was not collected on this amount
but is used to satisfy minimum tax.)

Rent for re-rental ($500 receipts x 4%) 20.00
(Tax collected and reported by the renter.
Title owner must have verification certificate.)

Total amount to reduce minimum tax
$58.00

Unremitted Portion of Minimum Gross Rental
Receipts Tax
$ 6.00

FILING RETURNS

Introduction

A person who rents a motor vehicle must file a:

• Motor Vehicle Rental Tax Return, Form 2C00-2.97, and
• Supplement to Motor Vehicle Rental Tax Return,
  Form 2C00-2.99.

Filing Periods

Returns are filed:

• quarterly unless tax is collected in excess of $750.00
  per month, at which time returns are filed

• monthly or

• prepayments can be made and returns filed quarterly.

Returns Furnished Taxpayer

• Quarterly returns are mailed on the 15th day of the
  third month of the quarter.

• Monthly returns are mailed on the 15th day of the month.

• Prepayment forms are mailed on the 15th day of the first
  month of the quarter.

Late Returns

Penalty and interest accrue if a return or remittance is
filed late.

• 1 - 30 days late, 5% penalty accrues.
• 31 - 60 days late, 10% penalty accrues.
• 61 days late, 6% interest per annum accrues on the tax
  in addition to the 10% penalty being due.

Supplements

The supplement must be completed and attached to the return
when vehicles you own cease to be used for rental purposes
during that reporting period.

Due Date

The return, supplement, and remittance are due on or before
the last day of the month following the reporting period.

Instructions

Detailed instructions are on the reverse side of the

• Motor Vehicle Rental Tax Return and
• Supplement to Motor Vehicle Rental Tax Return.

RECORDS

Seller Records

The seller must keep complete records of each motor vehicle
transferred by him at retail sale including a true and com-
plete copy of the invoice pertaining to the transaction
described by such affidavit.

The invoice shall show:

• the full price of the motor vehicle plus
• itemized price of all accessories attached thereto and
• description and value of trade-in or replaced vehicle.

Rental Records

The owner of a motor vehicle used for rental purposes is re-
quired to keep records and supporting documents containing:

• total consideration paid, or to be paid;
• description and value of trade-in or replaced vehicle;
• amount of motor vehicle sales or use tax paid;
• amount of gross rental receipts charged; and
• amount of gross rental receipts tax remitted to the
  Comptroller.

NOTE: The above itemized information must be kept with
regard to each motor vehicle used for rental.

Mileage

No mileage records are required pertaining to rental
vehicles.

Exemption Certificate

If a Motor Vehicle Rental Exemption Certificate is being
used, it must be attached to the rental contract on tax
exempt rentals to a:

• public agency,
• church or religious society, or a
• rent for re-rental.

Verification Certificate

The Motor Vehicle Verification Certificate for Rental Tax
validates a claim for credit and may be used as follows:

• May be furnished title owner by renter verifying total
  amount of gross receipts tax collected and remitted to
  the Comptroller.

• May be furnished renter by title owner documenting re-
  imbursement of a sales or use tax paid at registration.

• May be furnished documenting rental tax paid out of
  state by the title owner on a vehicle which is subject
  to minimum gross rental receipts tax.

Burden of Proof

If... Then...
the Motor Vehicle the burden of proof rests with
Rental Exemption the rental company at the time
Certificate is not of an audit.
used,

the Motor Vehicle the burden of proof rests with
Verification Certi- the person claiming credit at
ficate for Rental the time of an audit.
Tax is not used,

Retention Period

Records shall be retained at the principal office for at
least four (4) years from the date of sale or the date of
rental.

Inspection and Audit

All records shall be open to inspection and audit by the
Comptroller of Public Accounts or his authorized represen-
tative.

Method of Accounting

A taxpayer who keeps his records on a cash basis, accrual
basis, or on any generally recognized accounting basis which
correctly, reflects the operation of the business, may file
the tax returns on the same accounting basis that is used
in his records, so long as the method used is consistent.