SB 23-055

Senate Bill 23-055, also known as the Car Sharing Program Sales Use and Ownership Tax bill, requires car sharing platforms to ensure that vehicle owners have paid all necessary taxes on their cars or are collecting taxes from renters. This includes sales tax on rentals and an ownership tax based either on the value of the car or each rental. The bill affects both car-sharing companies and individual car owners who participate in these programs. Since it has been signed, this means that the new rules are now law and car sharing platforms must comply with these requirements to ensure proper tax collection.

Official Summary

The bill addresses the payment of sales and use and specific ownership taxes owed on cars registered with peer-to-peer car sharing programs (car sharing program), which are programs or applications that connect third-party car owners (shared car owner) with third-party drivers for the purpose of renting a motor vehicle (shared car). A car sharing program is required to verify that the shared car owner has: Either paid the state and local sales and use taxes due on the sale and purchase of the shared car or acquired the shared car tax free on the condition that the shared car owner agrees to collect sales and use tax on each rental of the shared car; and Either paid the specific ownership tax or elected to pay specific ownership tax based on each rental of the shared car. If the shared car owner has elected to pay specific ownership tax on each rental of the shared car, the car sharing program collects and remits the taxes on behalf of the shared car owner. If the shared car owner has received permission to collect and remit sales and use tax on each rental of the shared car, the car sharing program collects and remits the state tax and any state-administered local taxes on behalf of the shared car owner. Counties and municipalities are authorized to enforce the collection of any tax or fee imposed on the business of renting shared cars by requiring the car sharing program to collect the tax or fees for the rental of shared cars registered with the car sharing program. (Note: This summary applies to this bill as introduced.)

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