Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 251 - RENTAL MOTOR VEHICLE AND TOUR VEHICLE TAX › Subchapter 4 - IMPOSITION OF RENTAL MOTOR VEHICLE SURCHARGE TAX › Section 18-251-2-02 - Surcharge tax on rental motor vehicles or vehicles; computation of tax

Current through June, 2024
(a) For purposes of this chapter, "day" means
				a twenty-four hour period of time, which shall be computed from the time that
				the motor vehicle or vehicle is rented or leased.
Example:
Ms. Visitor rents a car for a day. She
				  picks up her car at 9:00 a.m. on Monday and returns it to the car rental
				  station at 8:59 a.m. on Tuesday. There is a surcharge tax at the rate set forth
				  in section
				  251-2,
				  HRS, for the one-day rental.
(b) For purposes of this chapter, "any
				portion of a day" means one minute or more of a twenty-four hour period of time
				that the motor vehicle or vehicle is rented or leased; provided that the
				computation of time shall not include any incidental grace period allowed by a
				lessor. The grace period shall be without any additional rental charge,
				overtime or service fee, or any other charge or fee or waiver relating to a
				delayed return of a vehicle.
Example:
Mr. Businessman travels from Oahu to Maui for business and
				  rents a car from ABC Rental on Maui from 8:00 a.m. to 12:00 p.m. when Mr.
				  Businessman returns to Oahu. At 1:00 p.m. ABC Rental rents the same car to Ms.
				  Visitor until 8:00 p.m. Assuming ABC Rental is not a car-sharing organization,
				  ABC Rental is subject to the rental motor vehicle surcharge tax for the daily
				  rate for each portion of a day's rental. In other words, rental motor vehicle
				  surcharge tax is due for two days total rental.
Example:
Mr. Tourist travels to Maui and rents a car. He picks up his
				  car at 11:00 a.m. on Friday and returns it to the car rental station at 11:01
				  a.m. on Monday. The rental car company charges Mr. Tourist the rental rate for
				  three days and one hour. Mr. Tourist has rented the car for three days and a
				  portion of a fourth day; therefore, rental motor vehicle surcharge tax is due
				  for four days total rental.
Example:
Ms. Mover is moving to a new house and
				  rents a truck for a day. She picks up the truck at 9:00 a.m. on Wednesday and
				  returns it to the truck rental location at 9:10 a.m. on Thursday. The rental
				  company has a grace period of fifteen minutes and only charges Ms. Mover for
				  one day's rental. Ms. Mover has rented the truck for one day, and rental motor
				  vehicle surcharge tax is due for one day total rental.
(c) The substitution of a motor vehicle or
				vehicle with another motor vehicle or vehicle shall not incur an additional
				rental motor vehicle surcharge tax amount for a day or portion of a day if:
(1) The substitution is made on the same
				rental contract or agreement;
(2)
				The rental or lease period is uninterrupted, continuous; and
(3) If the rental or lease period is longer
				than one day, the rental or lease period shall occur over consecutive days.
When there is a substitution of vehicle, the burden is upon
				  the lessor to show that the substitution is proper and not a surcharge tax
				  avoidance scheme and subject to the rental motor vehicle surcharge tax.
Example:
Mr. Sales flies to Oahu for a one-day trip. He rents a car
				  at the airport and drives off to his meeting in Kaaawa. Before he gets too far,
				  Mr. Sales realizes that the car is not in very good condition. He decides to
				  return to the airport station and exchange the car for another one in proper
				  working condition. The second car is a substitute for the first car, therefore,
				  the rental motor vehicle surcharge tax is due for one day total rental.
Example:
To ease traveling to neighbor islands for its customers, ABC
				  Rentals (ABC) has a "one-stop 7-day islandhopping" special: a customer signs
				  one rental car contract; pays the rental fee for seven days; and may pick up a
				  car from any of ABC's business locations on any island during that time period.
				  Ms. Visitor decides on the special rate. She picks up a car at the airport on
				  Oahu at 8:00 a.m. on Monday; returns the car to the Oahu station at 8:00 a.m.
				  on Tuesday; and flies to Molokai, picking up a car there at 9:00 a.m. At 5:00
				  p.m., she returns the car to the Molokai station and flies to Maui, picking up
				  a car at 6:00 p.m. Ms. Visitor spends the rest of the week on Maui, returning
				  the car to the Maui station at 7:55 a.m. the next Monday. Ms. Visitor actually
				  used three different cars on Tuesday. The second and third cars she used are
				  substitutes for the first car; thus, the rental motor vehicle surcharge tax is
				  due for seven days' total rental.