I. $10 Surcharge on Vehicle Rental Contracts in Revere
A. Statutory Authority
The Legislature has authorized the city of Revere to impose a surcharge of not more than $10 upon each vehicular rental transaction contract in the City of Revere. St. 2005, c. 92, § 1. Pursuant to the provisions of this statute, Revere has enacted an Ordinance providing for a $10.00 surcharge. See REVERE ORDINANCES, Title 3, c. 3.02, § 3.02.020(B)(2005). Funds derived from the surcharge will be used to construct and equip a new public safety facility for the City of Revere. Vendors entering into vehicular rental transaction contracts in Revere on or after October 1, 2005 that fail to collect and remit the surcharge are subject to assessment and collection by the Department of Revenue.
B. "Vehicular Rental Transaction Contract"
The $10 surcharge is imposed upon each vehicular rental transaction contract in Revere. The term "vehicular rental transaction contract" includes any written agreement setting forth the terms and conditions governing the use of a vehicle provided by a rental company for thirty continuous days or less, except as provided in Subsection III D of this TIR. See generally G.L. c. 90, § 32E ½. A written agreement may be executed upon tangible media or electronically, such as through the Internet.
Vendors must collect the $10 surcharge on each vehicle rental contract in Revere. A vehicle rental contract is "in Revere" (1) when the vehicle is received by the customer at a business location of the rental company in Revere or (2) when the vehicle is not received by the customer at a business location of the rental company, if the vehicle is received by the customer in Revere. Types of vehicles subject to the surcharge include, but are not limited to the following:
Trailers (but the surcharge is not imposed on the rental of a trailer hitch).
C. $10 Surcharge Imposed Separately from Sales Tax
The $10 surcharge on a vehicle rental contract in Revere is imposed separately and in addition to the existing 5% sales tax imposed under G.L. c. 64H, § 2. The $10 surcharge on a vehicle rental contract in Revere is not part of the sales price subject to Massachusetts sales tax. For billing purposes, the $10 surcharge must be stated separately from the sales price and the sales tax. See Letter Ruling 99-6.
D. Multiple Vehicle Contract
In applying the $10 surcharge on a vehicle rental contract in Revere where multiple vehicles are provided under the terms of a single contract, only one $10 surcharge is imposed. A monthly or annual membership contract in a Car Sharing Organization ("CSO") is subject to vehicle rental surcharge upon the first reservation and use of a vehicle "in Revere," as defined in Section I B of this TIR. The $10 surcharge is imposed only once during the term of the contract. If the contract is renewable, the $10 surcharge is imposed once upon each renewal period in which a vehicle is received in Revere. For purposes of this TIR, a CSO is a membership-based entity with a distributed fleet of private motor vehicles that are made available to its members primarily for hourly or other short-term use through a self-service fully automated reservation system. A CSO periodically charges a membership fee separate from any use-based fees relating to a specific vehicle. A CSO does not include any arrangement where a separate written agreement is entered into each time a vehicle is transferred from a rental company to its customer.
II. Exemptions from Vehicle Rental Surcharges
1. All sales and transactions that Massachusetts is prohibited from taxing under the constitution or laws of the United States are exempt from vehicle rental surcharges.
2. Agencies of the United States or its political subdivisions are exempt from all vehicle rental surcharges.
3. To the extent that a foreign diplomat or consular employee is exempt from sales tax pursuant to Administrative Procedures 102 and 621, the diplomat is likewise exempt from vehicle rental surcharges.
B. Not Exempt
1. There is no exemption from vehicle rental surcharges for rentals by religious, scientific, charitable or educational organizations exempt from federal income taxation under Internal Revenue Code § 501(c)(3). Similarly, there is no exemption from vehicle rental surcharges for rentals by organizations exempt from federal income tax under any other section of the Internal Revenue Code.
2. There is no general exemption from vehicle rental surcharges for rentals by agencies of the Commonwealth of Massachusetts or its political subdivisions.
III. Returns and Record Retention Requirements
A. Statutory Authority
The administration of the vehicle rental surcharges imposed under the authority of St. 2005, c. 92, § 1 is vested in the Commissioner of Revenue. "All provisions of [chapter 62C] relative to assessment, collection, payment, abatement, verification and administration, including penalties and interest, shall, so far as pertinent, be applicable to the vehicle rental surcharge as though it were a tax enumerated in [chapter 62C] section 2. . . ." St. 2005, c. 92 § 2. The Commissioner will generally administer the vehicle rental surcharge for the City of Revere in the same manner as the surcharge imposed by St. 1997, c. 152 § 9(e) on vehicular rental contracts in the City of Boston.
B. $10 Surcharge Return
1. Vendors required to collect the $10 surcharge imposed by authority of St.. 2005, c. 92, § 1 must register for this new tax type, even if they have previously registered with DOR for sales tax and the Boston Convention Center Financing ("CCF") surcharges.
2. The surcharge must be collected and remitted by the vendor to the Department on a quarterly basis on Form VRS. St. 2005, c. 92, § 1.
3. The return is due on or before the 20 th day of the month following the close of each calendar quarter.
4. The $10 surcharge must be remitted separately from the 5% sales tax and separately from any $10 CCF surcharges imposed on vehicular rental contracts in the City of Boston.
5. Companies having more than one rental location in the City of Revere may report all vehicle rental surcharges from Revere on a single form VRS.
C. Record Retention
1. Any person required to collect and remit the vehicle rental surcharge must maintain permanent books of account or records of all vehicle rentals subject to the surcharge. Records must be sufficiently accurate and complete to establish the amount of vehicle rental surcharge due under the provisions of St. 2005, c. 92, § 1.
2. Such persons shall retain copies of vehicle rental surcharge returns filed together with supporting data to indicate how the amount of surcharge reported in the returns was calculated.
IV. Effective Date
This TIR applies to vehicle rental contracts in Revere that are entered into on or after October 1, 2005. The first returns for the surcharge will be due on or before January 20, 2006.
Commissioner of Revenue
October 14, 2005