New Jersey Administrative Code › Title 18 - TREASURY - TAXATION › Chapter 40 - DOMESTIC SECURITY FEE › Subchapter 1 - PROVISIONS › Section 18:40-1.3 - General application; rental time periods

Current through Register Vol. 56, No. 14, July 15, 2024
(a) On rental agreements
				entered into on and after July 8, 2006, the $ 5.00 per day rental fee applies to the
				first 28 days of a rental agreement for a rental motor vehicle with the same renter;
				thus, the maximum rental fee in the aggregate is $ 140.00 even if the actual rental
				extends beyond 28 days. The rental fee does not apply to any period of a lease
				agreement.
Example 1: A rental company rents a motor vehicle to a renter for
				  30 days. A rental fee for 28 days is owed by the rental company.
Example 2: A rental company rents a motor vehicle to a renter for
				  20 days. The renter returns the vehicle on the 15th day of the rental agreement and
				  is not charged by the rental company for the remaining five days. The rental company
				  owes a rental fee for 15 days. The agreement was modified by the parties to one of
				  15 days duration. If the rental company charged the renter for the full 20-day
				  period, then a rental fee of 20 days, however, would be owed by the rental
				  company.
Example 3: A rental company rents a motor vehicle to a renter for
				  60 days but breaks up the rental period into two 30-day intervals. If there are
				  separate rental agreements entered for each 30-day period with any terms different
				  (other than for duration), then 28 days of fees must be paid by the rental company
				  on each agreement. If just one agreement covers the 60-day period, then the $ 5.00
				  per day fee covers only the first 28 days.
Example 4: A rental company provides a rental agreement that
				  includes an option to renew. The original agreement requires that either or both of
				  the parties to the agreement exercise the right of renewal before it can go into
				  effect. The new renewal agreement is considered an agreement that was entered into
				  as a result of an option to renew a previous agreement as well as an original
				  agreement in and of itself. Both situations are treated the same for the purposes of
				  the Domestic Security Fee law. The 28-day time period commences from the beginning
				  date of each rental agreement, renewal or otherwise. If, however, the option is
				  automatically renewable (for example, the agreement renews without the need for
				  either party to take any action to put the renewal into effect, whether or not any
				  terms change), then the fee would only be owed for up to the first 28 days of the
				  original agreement.
Example 5: A rental company rents a vehicle to a customer which
				  is returned before or at the end of the rental period, at the rental company's
				  request, because the renter needs extended use of the vehicle. The rental company
				  requires the return of the vehicle so that it can physically inspect the vehicle to
				  ensure that it is in good condition; it prefers to collect payment up to that point
				  in time, and because of computer system restraints and the rules surrounding the
				  taking of authorizations and the recording of sale by a credit card company. In
				  order to process payment, the company must close the rental agreement. Once the
				  vehicle is inspected and payment processed, the rental agreement is then
				  renewed/extended under the same terms (although not necessarily the same time
				  period) as the original agreement. Here, the renewed/extended rental agreement is
				  merely a part of the original agreement. Where a motor vehicle rental agreement
				  contains an option to renew/extend automatically during or at the end of the rental
				  period, or where a renewal/extension agreement merely continues the terms of the
				  original agreement without any time interruption from the end of the original
				  agreement, then the fee would only be due and owing for up to the first 28 days of
				  the rental, whether the rental period falls entirely within the time period of the
				  original agreement or the original agreement plus some additional time under the
				  renewal/extension agreement for a total of 28 days. If, however, the parties to the
				  original agreement enter into a new agreement with different terms (other than for
				  duration), a new 28-day period starts to run.
Example 6: A rental motor vehicle company replaces a rented motor
				  vehicle with another. If the replacement vehicle is covered by the original
				  agreement, there is no additional fee due other than what would have been required
				  under that agreement. However, if a new agreement is entered into to cover the
				  rental of the replacement vehicle, then the 28-day period would run anew from the
				  beginning of the new agreement term for that vehicle.
(b) The rental fee is due for every rental day or
				part thereof. Any extension of rental time into a part of a day, whether due to an
				agreement or unilateral extension by either party, as long as billed by the rental
				company, shall result in an additional one day's fee being due from the rental
				company, up to 28 days of total rental.
Example 1: A rental agreement entered into on or after July 8,
				  2006, provides for a motor vehicle rental of only five hours. A $ 5.00 fee is due on
				  the rental agreement.
Example 2: A rental agreement provides for a five-day rental
				  period with a penalty for late return. The renter does not return the vehicle until
				  two hours into a sixth day and pays a penalty to the rental company. The rental
				  company owes six days of the rental fee.
Example 3: Same as Example 2 but the rental company waives the
				  penalty. Only five days of the rental fee are owed by the rental company.
Example 4: A rental agreement executed in September 2006 provides
				  for a motor vehicle rental of one day and one hour. A $ 10.00 fee is due on the
				  rental agreement as it was entered into on or after July 8, 2006.