Out-of-State Car-Sharing Platform Not Responsible for Collecting Tax in Texas

Texas issued a private letter ruling stating that an out-of-state peer-to-peer car sharing platform (taxpayer) is not responsible for collecting and remitting Texas motor vehicle gross rental receipts tax since it is not the owner of the vehicles on the platform. The taxpayer is a technology platform that allows vehicle owners (“hosts”) to list their personal vehicles as available for sharing. Platform users (“guests”) can identify available vehicles. The host and guest then agree on a price and fixed period for the use of the car. Taxpayer accepts payment from the guest and distributes proceeds to the host. Taxpayer is not the owner of any of the vehicles available on the platform and therefore is not required to collect and remit gross rental receipts tax, per the letter ruling. The hosts are the owners of the vehicles. As such, the hosts are required to obtain a Texas Motor Vehicle Rental Permit and remit gross rental receipts tax on the rental of the motor vehicle rented in Texas. (Letter No. 202207023L, Texas Comptroller of Public Accounts, July 15, 2022, released August 2022)

Posted on October 5, 2022