Alert The Tax Division offices will be closed on Friday, November 24 for a mandatory furlough day and will reopen Monday, November 27. Revenue Online will remain available to conduct business. Should you need assistance during this time, please call the mainline of the respective office location: Anchorage at 907. 269-6620 or Juneau at 907.465.2320, and leave a message.


Vehicle Rental Tax

Frequently Asked Questions





Sections:
  • Vehicle Rental FAQs



  • Vehicle Rental FAQs

    Who must file a Vehicle Rental Tax Quarterly Tax Return and when is it due?
    What are the Vehicle Rental Tax rates?
    Where do I send my Vehicle Rental Tax Quarterly Tax Return?
    Can I remit the Vehicle Rental Tax electronically?
    Where can I get copies of the Vehicle Rental Tax Quarterly Tax Return? Instructions for filling out the tax return? Government Use Exemption Certificate?
    Is there a maximum amount of Vehicle Rental Tax that can be charged?
    Is the Vehicle Rental Tax charged for the entire length of the rental contract?
    Do I have to pay Vehicle Rental Tax on the lease of new automobiles?
    What rental/lease fees and costs are subject to the Vehicle Rental Tax?
    What is the definition of a passenger vehicle?
    What is the definition of a recreational vehicle?
    What types of vehicles are exempt from the Vehicle Rental Tax?
    Do I pay Vehicle Rental Tax on the rental of a trailer that is designed to haul personal property or cargo?
    How do I get an Other Usage Exemption for Vehicle Rental Tax on a vehicle that is provided by an automobile dealer to a customer as a replacement vehicle?
    What type of identification do I need as proof of government employment or official status when applying for exemption from the Vehicle Rental Tax? Do these need to be shown to the rental agency upon receipt of the rental car?
    Are not-for-profit organizations exempt from the Vehicle Rental Tax?
    Does the renter of the vehicle that is exempt from the Vehicle Renter Tax have to fill out a Government Use Exemption Certificate or Other Usage Exemption Certificate for each rental?
    I own a small business, a bed & breakfast.  My customers pay for package deals which typically include meals, lodging, fishing charters and a vehicle rental. Are these vehicle rentals subject to the tax?
    What does the rental agency do with the completed Government Use Exemption Certificates and Other Usage Exemption Certificates?
    In summary, who is exempt from paying Vehicle Rental Tax?
    Who can I contact if I still have questions?


  • Who must file a Vehicle Rental Tax Quarterly Tax Return and when is it due?

  • The person or business collecting the Vehicle Rental Tax from renters of passenger and recreational vehicle is required to file a Vehicle Rental Quarterly Tax Return with the State of Alaska Department of Revenue according to the following schedule:

    Tax PeriodTax Return/Taxes Due Date
    1/1 - 3/31April 30
    4/1 - 6/30July 31
    7/1 - 9/30October 31
    10/1 - 12/31January 31


  • What are the Vehicle Rental Tax rates?

  • AS 43.52.020 levies a tax of 10% of the total fees and costs charged for the lease or rental of a passenger vehicle and 3% of the total fees and costs charged for the lease or rental of a recreational vehicle.

  • Where do I send my Vehicle Rental Tax Quarterly Tax Return?

  • Completed Vehicle Rental Tax Quarterly Tax Returns and payments can be sent to the following address:

    Alaska Department of Revenue
    Tax Division
    PO Box 110420
    Juneau Ak 99811-0420


  • Can I remit the Vehicle Rental Tax electronically?

  • Yes. Please use our free online electronic funds transfer service, also known as Revenue Online. Go to https://online-tax.alaska.gov and follow the online instructions.

    If the amount due is $100,000 or more, you must pay by electronic funds transfer or wire transfer in accordance with 15 AAC 05.3.10.

  • Where can I get copies of the Vehicle Rental Tax Quarterly Tax Return? Instructions for filling out the tax return? Government Use Exemption Certificate?

  • All forms needed to comply with Vehicle Rental Tax can be found online at the following URL:

    http://www.tax.alaska.gov/programs/programs/forms/index.aspx?60255

    If you do not have access to the Internet, please call the Department of Revenue at 907.296.6620 and we will gladly mail these documents to you.

  • Is there a maximum amount of Vehicle Rental Tax that can be charged?

  • No, there is not a limit to the amount of Vehicle Rental Tax that can be assessed on the rental/lease of a passenger or recreational vehicle.

  • Is the Vehicle Rental Tax charged for the entire length of the rental contract?

  • Yes, the Vehicle Rental Tax is charged for the entire period of the rental agreement as long as it is less than 91 days. However, if the rental agreement is for 91 days or longer, the Vehicle Rental Tax is not charged for any of the days of the contract. The intent of the Vehicle Rental Tax is to tax short term rentals, not long term leases.

  • Do I have to pay Vehicle Rental Tax on the lease of new automobiles?

  • Generally, no. As stated above, if the length of the rental/lease contract is 91 days or longer, the Vehicle Rental Tax is not charged for any of the days of the contract. However, if the leased car is turned back to the leasing agency within the first 90 days of the contract, Vehicle Rental Tax is charged.

  • What rental/lease fees and costs are subject to the Vehicle Rental Tax?

  • The following rental/lease fees and costs are subject to the Vehicle Rental Tax:

    1. Total compensation for the lease or rental of a passenger or recreational vehicle without regard to billing practices, credit procedures, or bad debts.

    2. Total compensation should not be reduced by commissions or fees charged by travel and other agents related to the leasing or rental of a passenger or recreational vehicle.

    The following rental/lease fees and costs are not subject to the Vehicle Rental Tax:

    1. Fees from the sale of automobile liability insurance, loss damage waiver insurance, and personal property insurance.
    2. Parking Tickets.
    3. Sales and excise taxes.
    4. Payment for damages to the vehicle during the rental period.
    5. Concession fees paid to an airport.
    6. Cancellation fees.
    7. Certain adjustments made at the beginning and end of a contract such as for fuel.
    8. Rental of GPS or child car seats.
    9. Separately itemized charges for personal property such as pots, pans, and linens included in the rental of a recreational vehicle.

  • What is the definition of a passenger vehicle?

  • A passenger vehicle is defined as a motor vehicle that is self-propelled, but not by animal power and is driven or moved on a highway or other public right-or-way in the state.

  • What is the definition of a recreational vehicle?

  • A recreational vehicle is defined as a motor vehicle or trailer for recreational dwelling purposes, a motor home or other vehicle with a motor home body style, a one-piece camper vehicle or any other self-propelled vehicle with living quarters. A cab-over camper attached to a pickup truck that is rented as a single unit is considered a recreational vehicle.

  • What types of vehicles are exempt from the Vehicle Rental Tax?

  • The rental or lease of the following types of vehicles is exempt from the Vehicle Rental Tax:

    1. Commercial Vehicles. A commercial vehicle is defined a motor vehicle or a combination of a motor vehicle and one or more other vehicle that is used to transport property or more than 15 passengers (including the driver), used on a land highway or vehicular way, weighs more than 26,000 gvwr or transports hazardous materials.
    2. Emergency or Fire Equipment. Emergency or fire equipment is equipment that is necessary to the preservation of life or property.
    3. Farm Vehicles. A farm vehicle is defined as a vehicle that is controlled and operated by a framer, used to transport agricultural products, farm machinery, or farm supplies to or from that farmer’s farm, not used in the operation of a common or contract motor carrier, and used within 150 miles of the farmer’s farm.
    4. Rental Trucks Used for Transportation of Personal Property. Rental trucks with a gross vehicle weight rating greater than 8,500 pounds and used primarily for the transportation of personal property.
    5. Replacement Transportation. A vehicle that is provided by an automobile dealer to a customer as replacement transportation during warranty, recall, or service contract repairs is exempt from the Vehicle Rental Tax.

  • Do I pay Vehicle Rental Tax on the rental of a trailer that is designed to haul personal property or cargo?

  • No. If the trailer is not designed for recreational dwelling purposes, the rental is not taxed. However, if the trailer is designed for recreational dwelling purposes, it is taxed as a recreational vehicle.

  • How do I get an Other Usage Exemption for Vehicle Rental Tax on a vehicle that is provided by an automobile dealer to a customer as a replacement vehicle?

  • A vehicle that is provided by an automobile dealer to a customer as replacement transportation during warranty, recall, or service contract repair is exempt from the Vehicle Rental Tax. The dealer cannot receive any compensation from the customer and the customer must provide a completed Other Usage Exemption Certificate to the dealer upon taking possession of the vehicle.

  • What type of identification do I need as proof of government employment or official status when applying for exemption from the Vehicle Rental Tax? Do these need to be shown to the rental agency upon receipt of the rental car?

  • Any one of the following types of identification is acceptable and must be shown to the rental agency upon taking possession of the rental car:

    1. Picture identification card issued by or on behalf of the exempt agency.
    2. Business card of the individual renting the car, embossed with the seal of the exempt agency.
    3. Direct billing to agency/credit card of the exempt agency.
    4. Travel or purchase order issued by an exempt agency.

  • Are not-for-profit organizations exempt from the Vehicle Rental Tax?

  • No, unless the renter is an employee or agent of local, state, or federal government and on official business, they are not exempt from the Vehicle Rental Tax.

  • Does the renter of the vehicle that is exempt from the Vehicle Renter Tax have to fill out a Government Use Exemption Certificate or Other Usage Exemption Certificate for each rental?

  • Yes. The renter must fill out the Governmental Use Exemption Certificate or Other Usage Exemption Certificate for each rental that qualifies for exemption from the Vehicle Rental tax. However, if the rental agency's contract incorporates substantially the same contents as the Government Use Exemption Certificate or Other Usage Exemption Certificate, it will be accepted by the Department of Revenue as a substitute.

  • I own a small business, a bed & breakfast.  My customers pay for package deals which typically include meals, lodging, fishing charters and a vehicle rental. Are these vehicle rentals subject to the tax?

  • Yes. If the business does not itemize the vehicle rental charges on the customer's invoice, the concept of fair market value is used to determine total fees and costs charged for purposes of the Vehicle Rental Tax.

  • What does the rental agency do with the completed Government Use Exemption Certificates and Other Usage Exemption Certificates?

  • The completed Government Use Exemption Certificates and Other Usage Exemption Certificates are attached to the rental contracts and kept on file by the rental agency for three years.

  • In summary, who is exempt from paying Vehicle Rental Tax?

  • 1. A person who rents or leases a vehicle on behalf of a federal, state, or local government agency for official use and upon taking possession of the vehicle provides the rental/lease agency with a completed Government Use Exemption Certificate is exempt from the Vehicle Rental Tax.
    2. A vehicle that is provided by an automobile dealer to a customer as replacement transportation during warranty, recall, or service contract repairs is exempt from the Vehicle Rental Tax. The dealer cannot receive any compensation from the customer and the customer must provide a completed Other Usage Exemption Certificate to the dealer upon taking possession of the vehicle.
    3. Rental trucks with a gross vehicle weight rating greater than 8,500 pounds and used primarily for the transportation of personal property are exempt from Vehicle Rental Tax.

  • Who can I contact if I still have questions?

  • If you have any additional questions regarding the Vehicle Rental Tax, please contact:

    Department of Revenue
    Tax Division
    550 W 7th Ave, Suite 500
    Anchorage AK 99501
    Phone 907.269.6620
    Fax 907.269.6644