However, employees of the government must pay the tax when the rental is not paid for by government voucher or approved government credit card. The federal government is not required to pay this tax. The Rental Car Tax Addendum must be completed and attached to the return. The rental car tax does not need to be separately stated on the customer invoice however, it must be segregated in the business records so it can be reported on the excise tax return. If the car were rented in King County and within the RTA, the total rental car rate would be 9.7%. In addition, cars rented within an area designated as being within the jurisdiction of the Regional Transit Authority (RTA), a 0.8% rate is imposed. The additional 2% in King County will no longer be in effect beginning October 1, 2011. Through September 30, 2011, King County is permitted an additional 2% stadium tax on the retail rental of passenger cars. Counties are permitted to impose a 1% rental car rate, so in certain counties the rate is 6.9%. This rate is added to the retail sales tax for the location of the origin of the rental and is in effect throughout the state. If the vehicle is rented on a daily basis and the vehicle is kept for more than 30 days, the total transaction is considered a daily rental and subject to the rental car tax. When a passenger car is contracted to be rented for more than 30 days, at the time of rental, the transaction is considered a lease. When is a rental for more than 30 days considered a long-term lease? A vehicle that is designed, used, or maintained for the transportation of property, commodities, merchandise, produce, freight, or animals.A vehicle licensed and operated as a taxicab.A vehicle rented or loaned to a customer by an automotive repair business while the customer's vehicle is under repair.The Department of Licensing, Motor Vehicle Licensing division, sets the requirements for determining if a vehicle must be licensed as a rental vehicle.Ī rental car is a passenger car designed for carrying 10 passengers or less and used for the transportation of persons. The rental car tax is imposed on the retail rental charge for passenger cars used for rental purposes for periods of less than 30 days. This section covers issues related to licensed rental car businesses including the rental car tax, fleet loaner cars, and registering rental cars and trailers.
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