Timing and purpose
As of January 1, 2019, any vehicle rental transaction in Massachusetts with a duration of more than 12 hours and not more than 30 days, must include a $2 surcharge to be collected by the vendor.
The purpose of the surcharge is to fund the Municipal Police Training Fund – more information.
Questions and answers
Is this similar to the Convention Center Financing and Revere rental surcharges?
Yes, the new surcharge will be handled similarly to those currently administered by the Department of Revenue (DOR).
We currently collect and remit surcharges on vehicle rentals in Boston or Revere, will the process be the same?
Yes. The $2 surcharge will be added to any surcharges you may already be collecting in Boston or Revere and must be submitted through your Vehicle Rental Surcharge account on MassTaxConnect.
Will rental companies operating in Boston and/or Revere still be required to submit a return for each location plus a new one?
No. A new Vehicle Rental Surcharge Return has been developed that covers remittances on all three surcharges. The fourth quarter 2018 filing will be completed as usual. As of the first quarter of 2019, regardless of whether you collect one, two or all three surcharges, you are only required to file the new return through your Vehicle Rental Surcharge account. Those who currently file returns for both Revere and Boston will be contacted directly by DOR with information.
What vehicles are included in the surcharge to be collected by the rental vendor?
Vendors will collect a $2 surcharge on every vehicle rental transaction in Massachusetts with a duration of more than 12 hours and not more than 30 days. The vehicles subjected to the surcharge typically include:
- Passenger cars
- Trailers (excluding the trailer hitch)
What rental transactions should not be included in the new surcharge?
The surcharge does not apply to transportation network companies such as Lyft or Uber, or to vehicle rental periods of less than 12 hours or more than 30 days.
If we have not collected a surcharge on vehicle rentals in Boston or Revere, how do we get started?
First, you will want to update your systems to begin collecting the $2 surcharge on rental transactions as of January 1, 2019. If you are not registered on MassTaxConnect, you will need to do so by creating a username and password. The $2 surcharge will be collected on a quarterly basis and is due to the Department of Revenue on or before the 20th day of the month following the quarter’s close (if the due date falls on a Saturday, Sunday or legal holiday, the due date is the next regular work day). Therefore, your first quarterly payment will cover the period from January 1, 2019 through March 31, 2019 and should be filed on April 22, 2019.
More information to come
Working Draft TIR 18-XX: Police Training Surcharge on Vehicular Rental Contracts has more detailed information on the surcharge. Additionally, there will be information on how to file and pay using MassTaxConnect.
If you have any questions, please call (617) 887-6367 or (800) 392-6089 and choose “Trustee,” the fourth prompt.