Virginia Department of Taxation Provides Guidance on New Vehicle Sharing Tax

Peer-to-peer (PTP) vehicle sharing platforms will be obligated to collect the tax on behalf of the owners if they meet the marketplace facilitator thresholds in Virginia ($100,000 in annual revenue or 200 transactions). Platforms are responsible for requiring certification and providing information on how PTP owners may become certified. Platforms are also required to collect tax if they perform activities including but not limited to: 

  • engaging with the technology that brings together purchaser and marketplace seller 
  • engaging in payments and listings for shared vehicles 
  • being involved in customer service 
  • establishing economic nexus through their activities

The PTP Vehicle Sharing Tax will differentiate from the Motor Vehicle Rental Tax and Fee that it previously fell under. The PTP tax applies to vehicle owners who certify they have ten or fewer vehicles listed on any vehicle sharing platform at one time. The tax runs at 6.5%, effective October 1, 2020, increasing to 7.0% on July 1, 2021.

These guidelines are based on the Virginia Department of Taxation’s interpretation of current laws but are not formal rules. (Guidelines for the Motor Vehicle Rental and Peer-to-Peer Vehicle Sharing Tax, Virginia Department of Taxation, Senate Bill 735, effective October 1, 2020).

Posted on October 1, 2020