In response to a recent "FYI" from the Colorado Department of Revenue (DOR) regarding the State's $2 motor vehicle daily rental fee, the Truck Renting and Leasing Association (TRALA) is seeking clarification from the DOR regarding collection of the daily fee. In a document created by TRALA's Tax Advisory Council, TRALA explains how its members believe the law should be interpreted, and asks the DOR for confirmation.
The Colorado legislature passed legislation mandating that the $2 per day fee be collected on daily rentals of motor vehicles used to transport persons or property, beginning July 1, 2009. This mandate applies to companies whose "primary business" is renting motor vehicles for less than 45 days. Neither the legislature nor the DOR has defined what constitutes primary business, according to TRALA.
The association stated that the issue of collecting the daily fee was further complicated when the DOR stated in its FYI that "If a company whose primary business is renting vehicles for less than 45 days has a rental that goes beyond 45 days, the fee must be collected for each day even though the rental exceeds 45 days." This is in contrast to the law which mandates the collection of the fee for rentals of less than 45 days, according to a press release from TRALA.
Among the items covered in TRALA's interpretation are items such as: what constitutes the primary business of renting motor vehicles for less than 45 days, determining whether a company should or should not be subject to collection of the fee, and rentals involving renewals or late returns.