Vehicle Rental Tax
2015 Annual Report

End Year

AS 43.52

Description

Alaska levies an excise tax on fees and costs charged for the lease or rental of a passenger or recreational vehicle if the lease or rental does not exceed a period of 90 consecutive days.

The person working for the rental/lease agency that provides the leased or rental vehicle collects the tax from the individual renting or leasing the vehicle. The rental/lease agency in turn remits the tax to the Department of Revenue’s Tax Division.

Rate

For passenger vehicles, the rate is 10% of the total fees and costs for renting or leasing. For recreational vehicles, the rate is 3% of the total fees and costs for renting or leasing.

Returns

Vehicle rental/lease agencies file tax returns and remit taxes quarterly. The returns and payments are due the last day of the month following the end of the calendar quarter in which the rental/lease agencies collected the tax.

Exemptions

Vehicle rental tax does not apply to:

Rentals or leases to federal, state, local, or foreign government agencies or employees on official business.
Trucks with a gross vehicle weight rating greater than 8,500 pounds used for moving personal property and for vehicles provided to customers by automobile dealers as replacement transportation during warranty, recall, or service contract repairs.
Taxi cabs, which are excluded from the tax under AS 43.52.099. Specifically, taxi cabs do not meet the definition of a “passenger vehicle.”

There is no exemption certificate required for taxi cabs. Similarly, rental trucks and replacement transportation do not meet the “passenger vehicle” definition. However, there is an exemption certificate required for those transactions.

Disposition of Revenue

The division deposits all revenue from the vehicle rental tax into a special vehicle rental account in the General Fund. The Alaska Legislature may appropriate the balance in the vehicle rental tax account for tourism development and marketing.

History

2003 – The Legislature enacted the vehicle rental tax on Aug. 20, 2003. The tax became effective Jan. 1, 2004.

2004 – The Legislature exempted the rental of taxicabs by taxicab drivers from the vehicle rental tax. Effective May 8, 2004, and retroactive to Jan. 1, 2004, the division refunded any tax collected or remitted for taxi cab rentals between Jan. 1 and May 8, 2004.

2006 – The Legislature exempted trucks rented by individuals for moving personal property and for vehicles provided to customers by automobile dealers as replacement transportation during warranty, recall, or service contract repairs, effective Jan. 27, 2006.

2013 – Effective May 10, 2013, the Legislature excluded motorcycles and motor-driven cycles as defined by AS 28.90.990 from the tax.

2014 – House Bill 193 (CH 74 SLA 14) added a new subsection to AS 43.52.080 allowing the department to share taxpayer information with a municipality relating to vehicle rental tax, as long as the municipality grants similar privileges to the department, it provides adequate safeguards for taxpayer confidentiality; and it uses the information for tax purposes.

Data with additional years.

Collections Summary Fiscal Year	2015	2014	2013	2012
Passenger Vehicle Rental	$9,215,480	$7,878,448	$8,002,079	$8,132,668
Recreational Vehicle Rental	432,722	396,337	360,782	359,002
Penalties, Interest and Refunds	50,554	8,712	20,130	37,963
Total Tax	$9,698,755	$8,283,497	$8,382,991	$8,529,633