A recently enacted Utah bill changes how motor vehicles involved in car-sharing platforms are taxed.
Utah S.B. 121 defines car-sharing as the authorized use of a motor vehicle by someone other than the owner, connected through a peer-to-peer program. This creates a distinction between car-sharing and short-term rentals, with car-sharing relying on individual shared vehicle drivers rather than a rental company. The bill also defines other key terms within the peer-to-peer car sharing industry and amends the definition of a ‘lease’ or ‘rental’ to include car sharing.
The legislation prohibits local taxes, fees, and other charges on the gross proceeds of the vehicle that are not imposed on other transactions of a motor vehicle without a driver. However, the legislation does dictate that car-sharing is subject to tax under Sec. 59-12-103(2)(a)(i)(B) or (2)(a)(ii).
The legislation excludes car-sharing for the purpose of temporarily replacing a vehicle due to an insurance agreement or repairs. S.B. 121 also excludes car-sharing for more than 30 days from its definition.
This legislation goes into effect July 1, 2023, with certain sections retroactive to January 1, 2019.
This bill helps to determine the marketplace facilitators responsibilities in a car sharing scenario as well as what local and jurisdictional taxes can be charged in peer-to-peer car sharing.
(Utah S.B. 121)