A person engaged in the business of renting vehicles without drivers (rental company) is required to collect, at the time the vehicle is rented, a surcharge on each contract that is for a period of 180 days or less.
A rental vehicle is a:
- Passenger vehicle that is designed to transport fifteen or fewer passengers and that is rented without a driver
- Truck, trailer or semi-trailer that has a gross vehicle weight (GVW) of less than 26,001 pounds, that is rented without a driver and is used in the transportation of personal property
- Motorcycle, moped, scooter or other recreational vehicle that is registered for use on Arizona streets and highways
- Motor home
- Golf cart registered for use on Arizona streets and highways
The 5% surcharge applies to the following gross receipts items of the rental contract. This listing is not all inclusive, but is a guideline in assisting with compliance.
- Rental vehicle base charge (daily/weekly/monthly)
- Additional fuel charges, driver charges or underage driver charges
- Drop off or delivery fee
- Car class change
- Baby seat, ski rack, luggage rack, tow bar or other misc. equipment
- GPS or special equipment charges
- Other miscellaneous charges or fees
Items not subject to the surcharge of each rental contract include the following:
- State and local taxes and fees imposed by ARS Title 42, Chapter 5
- Major league spring training rental surcharge imposed by ARS Title 48, Chapter 26, Article 2
- Non-vehicle related revenue such as boxes, dollies, packing material, etc.
The rental company, in the course of its daily operations, is required to list the amount of surcharge collected for that transaction as a line item on the rental contract.
The Rental Vehicle Surcharge must be used only for the reimbursement of the amount of Arizona Vehicle License Tax (VLT) imposed on rental vehicles, whether rented in this state or in another state or jurisdiction, and paid by the person engaged in the rental vehicle business. Any surcharge collected in excess of the VLT must be remitted to ADOT to be deposited in the Highway User Revenue Fund. Any surcharge collected in error must be refunded to the renter. If not refunded, this amount is to be included in the Annual Report.
The rental company subject to the vehicle rental surcharge that has conducted a vehicle rental business any time during a calendar year is required to file a Rental Vehicle Surcharge Annual Report form #96-0290 no later than February 15 immediately following the end of the calendar year.
Exception: The report is due immediately if the rental company has discontinued conducting vehicle rental transactions before the end of the calendar year (December 31).
The rental company must maintain records on a calendar year basis that substantiate the information contained in a filed Rental Vehicle Surcharge Annual Report. These records must be maintained for four years from the due date of the report or the date the report was filed, whichever is longer. These records must contain:
- Total Revenue Collected – Records that substantiate revenue collected must include, but are not limited to:
- Vehicle rental contracts
- Daily and monthly rental income records detailing revenue collected
- Chart of accounts and ledger records
- Balance sheets and profit and loss statements
- Total Arizona VLT Paid – Records that substantiate VLT paid must include, but are not limited to:
- Arizona registration slips that identify:
- Vehicle Identification Number
- Vehicle license plate number
- Amount of VLT paid
- Validated initial and supplemental MVD Fleet Services Unit invoices
- Cancelled checks, money orders, credit card statements or bank statements used to show payment of vehicle registration.
- Total Surcharge Collected – Records that substantiate total surcharge collected must include, but are not limited to:
- Vehicle rental contracts
- Daily and monthly rental income records detailing amount of surcharge collected
- Chart of accounts and ledger records identifying surcharge collected
Failure to maintain proper records or to provide records for audit purposes may result in the rental company being assessed the total surcharge amount estimated to have been collected.
Records must be made available for audit during normal business hours at the rental company location in Arizona. Audits may be conducted at an out of state location, to be paid by the rental company. Audit expenses, per diem and travel to be paid in accordance with the Arizona Department of Transportation expense guidelines in effect at the time of the audit.