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DMV Study

Peer-to-Peer Vehicle Rental. DMV Study. Angie de la Barrera Arlington County July 18, 2019. What’s P2P Car Rental?. DMV Proposed Definition*.

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DMV Study

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  1. Peer-to-Peer Vehicle Rental DMV Study Angie de la Barrera Arlington County July 18, 2019

  2. What’s P2P Car Rental?

  3. DMV Proposed Definition* • “Peer-to-peer shared vehicle” means a motor vehicle that (i) has been made available for rental by its owner through a peer-to-peer vehicle sharing platform and (ii) is either insured under a personal policy of motor vehicle liability insurance or registered as an uninsured motor vehicle as provided in § 46.2-706.  • “Peer-to-peer vehicle sharing platform” means any online-enabled application, software, website, or system offered or utilized for the exclusive purpose of renting motor vehicles, including peer-to-peer shared vehicles, and the provision of services incidental to the rental of those vehicles.  *as of 7/11/2019

  4. Industry Definition § 58.1-612.1. Tax collectible from marketplace facilitators; "marketplace facilitator" defined. A. As used in this chapter: "Marketplace facilitator" means a person that contracts with a marketplace seller to facilitate, for consideration and regardless of whether such consideration is deducted as fees from transactions, the sale of such marketplace seller's products through a physical or electronic marketplace operated by such person. "Marketplace facilitator" does not include a payment processor business appointed by a merchant to handle payment transactions from various channels, such as credit cards and debit cards, and whose sole activity with respect to marketplace sales is to handle transactions between two parties.

  5. How does it work?

  6. Platforms CurrentlyOperating in the UnitedStates1 • Peer-To-PeerPlatforms • DriveShare • Getaround • HyreCar • JustShareIt • Maven • Turo • Ziloc Fleets • EnterpriseCarShare • Maven • ShareNow • ZipCar 1 – Not intended as an exhaustive list. As an emerging industry, platforms can enter and exit the space rapidly. Platforms listed were active during May of2019.

  7. DMV Process and timeline

  8. Background • HB2813,patroned by Delegate Sickles,andSB 1733, patronedby Senator Cosgrove, directed DMV, in consultation with the Department of Taxation and the State Corporation Commission, to convene a work group to study the implications of electronic peer-to-peer vehicle rentalservices. • Instead, the Chairman of the Senate Transportation Committee sent a charge letter formally requesting that DMV facilitate astudy.

  9. Review andConsider: increased mobility options afforded by peer-to-peerrental, ownership and userexperiences; issues relating to insurance coverage for accidentsand incidents that occur during such a peer-to-peerrental; consumer protection laws and regulationsprotecting traditional vehicle rental companycustomers; taxation of peer-to-peer vehicle rental companies; revenue sources from otherwise idle assets; customizedapproaches to vehicle rental as a result of peer-to-peer vehiclerental; legislation passed by other states relating to this topicand; any other issues deemed relevant orappropriate StudyCharge

  10. Taxation Motor VehicleRental Tax Motor VehicleSales and UseTax Personal Property Tax ReliefAct BusinessRegistration Registration andUsage Insurance Sub-Committee Topics • Rental Car Decal • SpecialRegistrations • Transfer ofLiability • Insurance • Requirements • CollisionDamage Waiver Act • Limited Lines Licensing for Platforms • InsuranceVerification For P2PVehicles • Record Keeping • RecordsAccessibility • Fees • Safety andEmissions • Enforcement • VehicleRecalls • AirportFees

  11. MeetingsSchedule Stakeholder Kick-offMeeting 05/30/19, 1:00 p.m. - 4:00p.m. InsuranceMeeting 06/18/19 10:00 a.m. – 12:00p.m. Registration andUsage 06/17/19 1:00 p.m. – 3:00p.m. TaxationMeeting 06/17/19 10:00 a.m. – 12:00p.m. Registration andUsage 07/11/19 1:00 p.m. – 1:45 p.m. InsuranceMeeting 07/11/19 2:00 p.m. – 3:00p.m. TaxationMeeting 07/11/19 10:00 a.m. – 12:00p.m. Final Stakeholder Meeting 08/16/19, 9:00 a.m. - 12:00p.m.

  12. Spring 2019 Kick-off and stakeholder meeting Summer 2019 Sub-committee meetings Fall 2019 Sept – Drafting report and legislation Oct – Stakeholder review & finalize report Nov – Report and proposed legislation Dec. 2019 Submit to Senate Transportation and House Rules Committees

  13. Proposed Taxes

  14. Taxes on a $20,000 Personal Vehicle (First Year ofOwnership) Motor Vehicle Sales and Use Tax $830 Tangible PersonalPropertyTax* $808 Total $1,638 * Applying a rate of 4.04%, which is the average for the county of Arlington and the cities of Richmond, Roanoke, and Virginia Beach.

  15. Tax on a Comparable Rental Vehicle* * Based on the average tax collected at four rental car companies (Avis, Budget, Enterprise, Hertz) for airport and non-airportdailyrentalofastandardpassengercar in four localities(Arlington,Richmond,Roanoke,VirginiaBeach).

  16. Peer-to-peer shared vehicles will remain subject totheMotor Vehicle Sales and Use Tax (special fund revenue) andtheTangible Personal Property Tax (localrevenue).Because they are subject to those other taxes, peer-to-peer shared vehicles will be taxed at a combined rate of 6% under the Motor Vehicle Rental Tax, rather than the 10% levied on most other rental vehicles.

  17. Other Features of the Proposal • Although the definition of “peer-to-peer shared vehicle” excludes business-owned vehicles, the definition of “peer-to-peer vehicle sharing platform” is broad enough to include vehicles owned by businesses. • While business-owned vehicles may be rented via a peer-to-peer vehicle sharing platform, those rentals will not be taxed at the lower rates that apply to peer-to-peer sharedvehicles. • The person offering the peer-to-peer sharing platform will be responsible for collecting and remitting the Motor Vehicle Rental Tax. • All other administrative features of the Motor Vehicle Rental Tax will apply.

  18. Other Issues: Business, Professional, and Occupational Licensing (BPOL)Tax • A tax levied by some localities on businesses and professionals within theirjurisdictions. • The amount of the tax is based on gross receipts, but rates vary by locality and according to the classification of thebusiness. • A locality that levies the Merchants’ Capital Tax cannot also levy the BPOLTax.

  19. Other Issues: Personal Property TaxRelief • Partial relief from the Tangible Personal Property Tax is provided to owners of passenger cars, motorcycles, autocycles, and pickup and panel trucks that are “used for nonbusiness purposes,” meaning that “the preponderance of use is for other than business purposes.” (Va. Code §58.1-3523) • Relief takes the form of lower tax rates on thefirst$20,000 in assessed value of thevehicle. • Relief is funded by transfers from the general fund to localities.

  20. Other Issues: Business, Professional, and Occupational Licensing (BPOL)Tax

  21. Next Steps

  22. DMV Schedule • Review Proposed Insurance Legislation – August 1, 2019 • Finalize Report – August 16, 2019 • Draft proposed legislation – September 2019 • Stakeholder Review – October 2019 • Proposed Legislation – November 2019 • Submit to Senate & House – December 2019

  23. Questions?

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