At Hyrecar, we are dedicated to full compliance with all applicable tax laws, ensuring that we meet the tax obligations in every jurisdiction where we operate. As a Marketplace Facilitator, Hyrecar is required by states, counties, and cities to collect and remit sales tax on transactions facilitated between hosts (car owners) and customers (drivers). For more details on sales tax in the USA, please see below:
Across the U.S., more than 40 states apply taxes to rental cars. These taxes can take various forms, including a flat daily fee, a percentage of the rental cost (the most common), or a combination of both. Typically, states impose either:
- Sales tax on rentals and leases of tangible personal property
- Excise tax
- Both excise tax and sales tax in some cases
- Peer-to-peer car sharing special tax
Additionally, local governments and municipalities can introduce their own taxes. As a result, tax rates can differ not only between states but also between cities and specific locations within a region.
When it comes to peer-to-peer car sharing, tax regulations vary from state to state. Some states classify shared vehicles similarly to rental cars, applying the same excise tax rate. Others impose sales tax on car-sharing transactions, while certain states have established unique tax rates or daily fees specific to this type of service.
At Hyrecar, we ensure that the applicable tax rates are applied to the gross rental cost, following the specific tax rules of the jurisdiction where your trip takes place. This way, you can be confident that all relevant taxes are factored in based on the location of your rental.
Outlined below is general information by each state regarding the sales tax regulations of Leases and Rentals.
Please note that regulations concerning sales tax, excise tax, and Peer-to-Peer (P2P) carsharing tax vary by state and are subject to frequent updates. To ensure access to the most current rules and requirements, it is advisable to consult the official websites of individual state authorities. Below, you will find direct links to each state's website, where the latest regulatory information can be reviewed.
Leasing & Rentals Sales Tax Overview By State
| STATE | EXPLANATION | State Dept of Revenue Resource |
| Alabama | Leases and rentals are currently taxed at the same rate as sales of tangible personal property. | https://www.revenue.alabama.gov/tax-types/rental-tax/ |
| Alaska | Alaska does not impose a state sales tax. | https://dor.alaska.gov/ |
| Arizona | Arizona taxes the lease and rental of tangible personal property. | https://azdor.gov/business/transaction-privilege-tax |
| Arkansas | Leases and rentals are subject to the general Arkansas sales tax. | https://www.dfa.arkansas.gov/office/taxes/excise-tax-administration/sales-use-tax/ |
| California | Rentals and leases of tangible personal property are generally taxable. | https://www.cdtfa.ca.gov/taxes-and-fees/sutprograms.htm |
| Colorado | The rental or lease of tangible personal property is generally subject to tax in Colorado. | https://tax.colorado.gov/sales-use-tax |
| Connecticut | Leases or rentals are generally subject to tax in Connecticut. | https://portal.ct.gov/drs/sales-tax/tax-information |
| Delaware | Delaware imposes a use tax on leases within the state. | https://revenue.delaware.gov/services-for-the-business-taxpayer/ |
| District of Columbia | Leases and rentals are subject to the general sales tax rate in the District of Columbia. | https://otr.cfo.dc.gov/service/business-tax-service-center |
| Florida | Leases and rentals are taxed at the same rate as sales in Florida. | https://floridarevenue.com/taxes/taxesfees/Pages/sales_tax.aspx |
| Georgia | Leases and rentals are generally treated the same as retail sales in Georgia. | https://dor.georgia.gov/taxes/sales-use-tax |
| Hawaii | Hawaii has a broad based general excise tax that covers most transactions. | https://tax.hawaii.gov/geninfo/get/ |
| Idaho | Idaho includes leases and rentals in its definition of sales. | https://tax.idaho.gov/taxes/sales-use/online-guide/ |
| Illinois | True leases and rentals are not subject to tax in Illinois with the exception of motor vehicle leases for less than one year. | https://tax.illinois.gov/research/taxinformation/sales/auto.html |
| Indiana | In Indiana, payments made for leases and rentals are taxable. | https://www.in.gov/dor/i-am-a/business-corp/sales-tax/ |
| Iowa | In Iowa, payments made for leases and rentals are subject to the state sales tax. | https://revenue.iowa.gov/taxes/tax-guidance/sales-use-excise-tax/sales-use-tax-guide |
| Kansas | In Kansas, leases and rentals are subject to sales tax. | https://www.ksrevenue.gov/bustaxtypessales.html |
| Kentucky | Leases and rentals of tangible personal property are taxed under the same rate and terms as all other leases. | https://revenue.ky.gov/Business/Sales-Use-Tax/pages/default.aspx |
| Louisiana | Leases and rentals of tangible personal property are taxed at the same rate and under the same authority as sales of tangible personal property. | https://revenue.louisiana.gov/SalesTax |
| Maine | Leases and rentals are generally not taxable in Maine. | https://www.maine.gov/revenue/taxes/sales-use-service-provider-tax |
| Maryland | Leases and rentals are subject to the general state sales and use tax rate in Maryland. | https://www.marylandtaxes.gov/business/sales-use/ |
| Massachusetts | Leases and rentals are generally subject to tax in Massachusetts. | https://www.mass.gov/sales-and-use-tax-for-businesses |
| Michigan | Leases and rentals are taxed at the same rate as sales in Michigan. | https://www.michigan.gov/taxes/business-taxes/sales-use-tax |
| Minnesota | Leases and rentals are subject to tax sales tax in Minnesota. | https://www.revenue.state.mn.us/sales-and-use-tax |
| Mississippi | The lease or rental of tangible personal property is taxable as a service in Mississippi. | https://www.dor.ms.gov/business/sales-and-use-tax |
| Missouri | The taxability of leases and rentals will depend on whether or not the lessor paid sales tax on the purchase of the property. | https://dor.mo.gov/taxation/business/tax-types/sales-use/ |
| Montana | Montana has a very limited sales tax, which applies only to accommodations, campgrounds, and vehicle rentals. | https://montana.servicenowservices.com/citizen?id=kb_article_view&sysparm_article=KB0013192 |
| Nebraska | Leases are taxed under the same provisions as sales. Sales are defined to include leases and rentals. The general sales tax applies to leases and rentals. Tax is imposed on the gross receipts of all sales. | https://revenue.nebraska.gov/businesses/sales-and-use-tax |
| Nevada | Leases are taxed as sales in Nevada. | https://tax.nv.gov/tax-types/sales-tax-use-tax/ |
| New Hampshire | New Hampshire does not impose a state sales tax. | https://www.revenue.nh.gov/taxes-glance/business-taxes |
| New Jersey | Leases and rentals of tangible personal property are subject to sales tax in New Jersey. | https://www.nj.gov/treasury/taxation/businesses/salestax/index.shtml |
| New Mexico | Leases and rentals are subject to New Mexico's gross receipts tax. Note that there are special rules for motor vehicle leases. | https://www.tax.newmexico.gov/businesses/gross-receipts-overview/ |
| New York | There is not a separate sales tax imposed on leases and rentals in New York. New York defines sale to include the lease and rental of tangible personal property. | https://www.tax.ny.gov/bus/st/stidx.htm |
| North Carolina | Leases and rentals are subject to tax in North Carolina. | https://www.ncdor.gov/taxes-forms/sales-and-use-tax |
| North Dakota | Leases and rentals are subject to sales tax in North Dakota. | https://www.tax.nd.gov/business/sales-and-use-tax |
| Ohio | Leases and rentals are subject to sales tax in Ohio. | https://tax.ohio.gov/business/ohio-business-taxes/sales-and-use/sales-use-tax |
| Oklahoma | Oklahoma's sales tax applies to leases and rentals. | https://oklahoma.gov/tax/businesses/sales-use-tax.html |
| Oregon | Oregon does not impose a state sales tax. | https://www.oregon.gov/dor/programs/businesses/pages/sales-tax.aspx |
| Pennsylvania | Leases and rentals are generally subject to tax in Pennsylvania. | https://www.revenue.pa.gov/TaxTypes/SUT/Pages/default.aspx |
| Rhode Island | Leases and rentals of tangible personal property are taxed under the general sales and use tax law in Rhode Island. | https://tax.ri.gov/tax-sections/sales-excise-taxes/sales-use-tax |
| South Carolina | In South Carolina, leases and rentals of tangible personal property are subject to sales tax. | https://dor.sc.gov/tax/sales |
| South Dakota | Leases and rentals of tangible personal property are subject to sales tax in South Dakota. There are different rules for capital leases, operating leases, and motor vehicle leases. | https://dor.sd.gov/businesses/taxes/sales-use-tax/ |
| Tennessee | Generally, leases and rentals are taxed under the provisions of the state sales tax. | https://www.tn.gov/revenue/taxes/sales-and-use-tax.html |
| Texas | Leases and rentals are subject to tax in Texas. | https://comptroller.texas.gov/taxes/sales/ |
| Utah | Leases and rentals are taxed at the same rate as sales in Utah. | https://tax.utah.gov/sales |
| Vermont | Leases and rentals of tangible personal property are subject to sales tax in Vermont. | https://tax.vermont.gov/business/sales-and-use-tax |
| Virginia | Leases and rentals of tangible personal property are subject to sales tax in Virginia. | https://www.tax.virginia.gov/sales-and-use-tax |
| Washington | Leases and rentals are subject to sales tax in Washington. | https://dor.wa.gov/taxes-rates/retail-sales-tax |
| West Virginia | Leases and rentals are taxable in West Virginia. | https://tax.wv.gov/business/salesandusetax/pages/salesandusetax.aspx |
| Wisconsin | Leases and rentals are taxed at the same rate as Sales in Wisconsin. | https://www.revenue.wi.gov/Pages/SalesAndUse/Home.aspx |
| Wyoming | Leases and rentals are taxed at the same rate as general sales in Wyoming. | https://excise-tax-div.wyo.gov/ |