Virginia House Passes Bill to Limit Motor Vehicle Rental Tax

In a unanimous vote on Feb. 5, the Virginia House of Delegates passed legislation that would limit the definition of “gross proceeds” in Virginia’s 10% motor vehicle rental tax. HB 1993 will now head to the Senate.

HB 1993 excludes parking fines, delivery charges, pickup charges, delivery charges, pass-through charges, transportation charges, third party service charges, refueling surcharges, as well as other items that had already been excluded via regulation, from the definition of “gross proceeds.”

The Truck Renting and Leasing Association (TRALA) said the need to clearly define the definition of gross proceeds arose when the Virginia Department of Motor Vehicles (DMV) issued a memo based on an interpretation that came from the Virginia Attorney General’s office. The memo stated that vehicle rental companies should be collecting the 10% motor vehicle rental tax on both the rental agreement and the items that are now excluded in HB 1993.

Auto Rental News reported on the bill when it was first introduced on Jan. 11. The bill is sponsored and supported by TRALA members and staff, who have argued against the broad interpretation in meetings with DMV staff.

The Virginia Department of Taxation now handles administration of the motor vehicle rental tax, and voiced support for the legislation.

Further amendments to HB 1993 are anticipated in the Senate and would likely limit more items, including charges for motor fuels, violations, citations or fines, as well as recovery and drop charges. 

View more on the legislation here.


Related news: Indianapolis City-County Council Approves Rental Car Tax Increase

Comment On This Story

Name:  
Email:  
Comment: (Max. 10000 characters)  
Please leave blank:
* Please note that every comment is moderated.

Newsletter: Sign up to receive latest news, articles, and much more.

Read the latest

Auto Focus Blog: A blog covering fleets, auto rental and the business of cars

Autonomous Vehicles and the Changing Role of the Fleet Manager

With fewer drivers and substantially longer fleet lifecycles, fleet managers will pivot to new job functions.

2017: Fleet Mix Will Be Paramount

Car rental companies are migrating to vehicle segments with better residual values, though not without bumps in the road.

Auto Rental Summit: Five Trend Lines

Taking in the seminars, discussions, and networking at the 2016 Auto Rental Summit, trend lines emerged around shifts in model mix, data protection issues, increasing labor costs, workforce engagement, and new platforms to rent cars.

Job Finder: Access Top Talent. Fill Key Positions.