Code of Virginia — Title 58.1 (Taxation), Chapter 17 (MISCELLANEOUS TAXES)
§ 58.1-1736. Levy.
A. There is hereby levied, in addition to all other taxes and fees of every kind now imposed by law, a tax upon the rental of a motor vehicle in Virginia, without regard to whether such vehicle is required to be licensed by the Commonwealth. However, such tax shall not be levied upon a rental to a person for re-rental as an established business or part of an established business, or incidental or germane to such business.

The amount of the tax to be collected shall be determined by the Tax Commissioner by the application of the following rates against the gross proceeds:

1. Four percent of the gross proceeds from the rental in Virginia of any motor vehicle, except those with a gross vehicle weight rating or gross combination weight rating of 26,001 pounds or more.

2. In addition to the tax levied pursuant to subdivision A 1, a tax of four percent of the gross proceeds shall be levied on the rental in Virginia of any daily rental vehicle, whether or not such vehicle is required to be licensed in the Commonwealth.

3. In addition to all other applicable taxes and fees, a fee of two percent of the gross proceeds shall be imposed on the rental in Virginia of any daily rental vehicle, whether or not such vehicle is required to be licensed in the Commonwealth. For purposes of this article, the rental fee shall be implemented, enforced, and collected in the same manner that rental taxes are implemented, enforced, and collected.

B. A motor vehicle subject to the tax imposed under subdivision A 1 of this section shall be subject to the tax under subdivision A 1 or A 2 of § 58.1-2402 when it ceases to be used for rental as an established business or part of an established business, or incidental or germane to such business.

C. Any motor vehicle, trailer, or semitrailer exempt from this tax under subdivision 1 or 2 of § 58.1-1737 shall be subject to the tax when such vehicle is no longer rented by the United States government or any governmental agency thereof, or the Commonwealth of Virginia or any political subdivision thereof, unless at such time the vehicle is sold or its ownership is otherwise transferred, in which case the tax imposed by § 58.1-2402 shall apply, subject to the exemptions provided for in § 58.1-2403.

D. There is hereby levied a tax upon peer-to-peer vehicle sharing, without regard to whether a shared vehicle is required to be licensed by the Commonwealth.

1. Beginning July 1, 2020, and ending July 1, 2021, in lieu of the tax levied under subsection A, if a shared vehicle owner registers no more than 10 different shared vehicles on any combination of peer-to-peer vehicle sharing platforms at any one time, the tax shall be imposed at a rate of six and one-half percent on the gross proceeds paid by the shared vehicle driver for the peer-to-peer vehicle sharing in the Commonwealth of any shared vehicle.

2. Beginning July 1, 2021, and thereafter, in lieu of the tax levied under subsection A, if a shared vehicle owner registers no more than 10 different shared vehicles on any combination of peer-to-peer vehicle sharing platforms at any one time, the tax shall be imposed at a rate of seven percent on the gross proceeds paid by the shared vehicle driver for the peer-to-peer vehicle sharing in the Commonwealth of any shared vehicle.

3. However, if, and for so long as, a shared vehicle owner registers more than 10 different vehicles on any combination of peer-to-peer vehicle sharing platforms at any one time, the taxes levied on the gross proceeds paid by the shared vehicle driver shall be the same taxes imposed and collected on the rental of a motor vehicle and a daily rental vehicle pursuant to subdivisions A 1, 2, and 3.

E. A peer-to-peer vehicle sharing platform shall require all shared vehicle owners to certify to the peer-to-peer vehicle sharing platform whether the shared vehicle owner or any affiliate or subsidiary has registered more than 10 different shared vehicles on any combination of platforms at any one time. A shared vehicle owner is under a continuing obligation to immediately notify all platforms upon which he has vehicles registered, if the registration of a shared vehicle on a platform by the shared vehicle owner will cause the shared vehicle owner to exceed 10 or more different shared vehicles registered on any combination of peer-to-peer vehicle sharing platforms at any one time. Such notification shall occur prior to sharing any additional shared vehicles on any platform, not including those already subject to a vehicle sharing platform agreement at the time the additional vehicle is registered with the platform by the shared vehicle owner. Failure by the shared vehicle owner to immediately notify any platform shall subject the shared vehicle owner to payment of the taxes due and applicable penalties. Any affirmation or notification by the shared vehicle owner of such certifications shall require the peer-to-peer vehicle sharing platform to collect the taxes pursuant to subsection A.

2011, cc. 405, 639; 2020, c. 1266.