Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 251 - RENTAL MOTOR VEHICLE AND TOUR VEHICLE TAX › Subchapter 5.1 - IMPOSITION OF CAR-SHARING VEHICLE SURCHARGE TAX › Section 18-251-2.5-01 - Car-sharing vehicle surcharge tax

Current through June, 2024
(a) For purposes of
				the car-sharing vehicle surcharge tax:
"Average paid use period" means the total time a lessor's
				  vehicles are rented or leased divided by the total number of rentals entered
				  into. Average paid use period is calculated per taxable period.
"Organization" means any person or company as defined in
				  section
				  237-1, HRS.
"Paid use period" means the total time a lessor's vehicle is
				  rented or leased and is computed from the time the vehicle is rented or leased
				  until the time the vehicle becomes available for rent or lease to a different
				  customer or becomes unavailable to any customer. "Paid use period" shall not
				  include any complimentary grace period provided by a lessor.
"Taxable period" means the organization's taxable
				  year.
(b) For purposes of
				determining the total number of rentals entered into by a lessor, a single
				rental continues until the vehicle rented becomes available to a different
				customer or becomes unavailable to any customer.
(c) The determination of whether a lessor is
				a car-sharing organization is made on a per organization basis.
Example:
Customer rents a vehicle from Lessor at 10:00 a.m. Customer
				  parks and shops for one hour. During the time Customer is shopping, the vehicle
				  remains available only to Customer and is not available to other customers of
				  Lessor. Customer then returns to the vehicle, drives home to deliver her
				  purchases, and relinquishes the vehicle at 1:00 p.m. the same day, at which
				  time the vehicle becomes available to other customers of Lessor. Lessor has
				  entered into one rental for which the paid use period is three hours. Even if
				  Customer is not charged for the time she is shopping, the rental in this
				  example may not be treated as two separate rentals because the vehicle did not
				  become available to a different customer of Lessor during that time and
				  remained available to Customer.
Example:
Customer rents a vehicle from Lessor at 8:00 a.m. and
				  relinquishes the vehicle at 8:00 a.m. the following day. The vehicle becomes
				  available to other customers of Lessor at that time. Customer then decides she
				  needs to use a car again, immediately returns to the same vehicle, rents the
				  vehicle from Lessor at 8:02 a.m., and relinquishes the vehicle at 10:02 a.m.
				  the same day. Because the vehicle became available to other customers between
				  periods of rental, Lessor has entered into two rentals, one with a paid use
				  period of one day and another with a paid use period of two hours.
Example:
Customer rents a vehicle from Lessor at 8:00 a.m. The
				  vehicle is faulty and Customer returns the vehicle to Lessor's facility at 8:10
				  a.m., at which time it is put into the shop for maintenance, repaired and
				  re-enters Lessor's fleet the following day. The paid use period is ten minutes
				  because after ten minutes of rental the vehicle became unavailable to any
				  customer.
Example:
Customer rents a vehicle from Lessor at 8:00 a.m. and
				  returns the vehicle at 10:00 a.m. the following day. Lessor has entered into
				  one rental for which the paid use period is twenty-six hours. Note that even if
				  Lessor is a car-sharing organization, Lessor is liable for tax for two days at
				  the rate set forth in section
				  251-2,
				  HRS, because the paid use period is six hours or more.
Example:
Lessor rents a vehicle for a two-day period, beginning at
				  9:00 a.m. Monday and ending 9:00 a.m. Wednesday by which time the vehicle must
				  be returned to lessor. The customer returns the vehicle at 5:00 a.m. Wednesday.
				  The paid use period is forty-eight hours unless Lessor can prove that the
				  vehicle became available to other customers at 5:00 a.m. or became unavailable
				  to any customer at 5:00 a.m. Note that even if Lessor is a car-sharing
				  organization, Lessor is liable for tax for two days at the rate set forth in
				  section
				  251-2,
				  HRS, because the paid use period is six hours or more.
Example:
Customer rents a vehicle from Lessor at 1:00 p.m. Lessor
				  offers a complimentary grace period based on traffic conditions. Customer
				  returns the vehicle at 3:15 p.m. the same day. Per Lessor's terms, Customer's
				  rental qualifies for a complimentary grace period of fifteen minutes. The paid
				  use period for the rental is two hours.
Example:
For a taxable period, Lessor enters into seventy-five
				  separate rentals consisting of twenty-five thirty-minute rentals, twenty-five
				  one-hour rentals, and twenty-five twelve-hour rentals. Lessor has rented
				  vehicles for a total of 337.5 hours during the taxable period. The average paid
				  use period is calculated by dividing 337.5 total rental hours by seventy-five
				  total rentals. The average paid use period for the taxable period is 4.5.
				  Lessor satisfies the average paid use period requirement to qualify as a
				  car-sharing organization.
Example:
For a taxable period, Lessor enters into two hundred
				  separate rentals consisting of seventy-five thirty-minute rentals, fifty
				  one-hour rentals, forty two-hour rentals, twenty-five twelve-hour rentals, and
				  ten two-day (forty-eight hours each) rentals. Lessor has rented vehicles for a
				  total of 947.5 hours during the taxable period. The average paid use period is
				  calculated by dividing 947.5 total rental hours by two hundred total rentals.
				  The average paid use period is 4.73. Lessor satisfies the average paid use
				  period requirement to qualify as a car-sharing organization.