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Oklahoma Issues Letter Ruling Regarding Taxability of Car Rental Fees


Leasing

Oklahoma has issued a letter ruling regarding the taxability of fees associated with car rentals. Customer facility charges (CFCs) – that are separately stated - imposed on and chargedto customers and remitted to airports by a car rental company should not be in included in gross receipts for sales tax purposes, since they are imposed directly on the car rental consumers. CFCs are also not includable in gross receipts for purposes of the vehicle rental tax imposed on vehicle rentals of 90 or fewer days.

 

"Concession" fees and “access” fees are charged to the car rental company by airports for the privilege of operating in the airport. These fees are passed on to the car rental company’s customers. These charges are subject to sales tax since they are expenses passed through to customers. Satellite radio activation fees and service fees charged customers to the car rental company’s customers for activating and using satellite radio in the vehicles are to be included in gross receipts for sales tax and vehicle rental tax purposes. These are optional add-on fees elected by the customer and charged to the customer directly.(Letter Ruling 15-038, Oklahoma Tax Commission, June 28, 2016)

(05/24/2017)
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