Nichols’s bill taxing marketplace car rentals

The text as introduced · 2,135 words

89R11818 CJC-F

By: Nichols
S.B. No. 1363

A BILL TO BE ENTITLED

AN ACT

relating to the collection, remittance, and administration of

certain taxes on motor vehicles rented through a marketplace rental

provider; imposing a penalty.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 334.105, Local Government Code, is

amended by adding Subsection (c) to read as follows:

(c) Notwithstanding Subsections (a) and (b), if a motor

vehicle subject to the tax imposed under this subchapter is rented

through a marketplace rental provider, the marketplace rental

provider shall collect the tax for the benefit of the municipality

or county. The marketplace rental provider shall add the tax

imposed under this subchapter, if applicable, and the gross rental

receipts tax imposed by Chapter 152, Tax Code, to the rental charge,

and the sum of the taxes is part of the rental charge, is a debt owed

to the marketplace rental provider by the person renting the

vehicle, and is recoverable at law in the same manner as the rental

charge.

SECTION 2. Section 334.109, Local Government Code, is

amended to read as follows:

Sec. 334.109. GROSS RECEIPTS PRESUMED SUBJECT TO TAX. All

gross receipts of an owner of a motor vehicle or, if the motor

vehicle is rented through a marketplace rental provider, of the

provider from the rental of the motor vehicle are presumed to be

subject to the tax imposed by this subchapter, except for gross

receipts for which the owner or marketplace rental provider has

accepted in good faith a properly completed exemption certificate.

SECTION 3. Section 334.110(a), Local Government Code, is

amended to read as follows:

(a) The owner of a motor vehicle used for rental purposes

who is required to file a report under this subchapter or, if the

motor vehicle is rented through a marketplace rental provider and

the provider is required to file a report under this subchapter, the

provider shall keep for four years records and supporting documents

containing the following information on the amount of:

(1) gross rental receipts received from the rental of

the motor vehicle; and

(2) the tax imposed under this subchapter and paid to

the municipality or county by the owner or the marketplace rental

provider, as applicable, on each motor vehicle used for rental

purposes by the owner.

SECTION 4. Section 334.111(a), Local Government Code, is

amended to read as follows:

(a) An owner of a motor vehicle required to file a report

under this subchapter or, if applicable, a marketplace rental

provider required to file a report under this subchapter commits an

offense if the owner or provider fails to make and retain complete

records for the four-year period required by Section 334.110.

SECTION 5. Section 334.113, Local Government Code, is

amended by amending Subsection (a) and adding Subsections (a-1) and

(a-2) to read as follows:

(a) Except as otherwise provided by this section or another

provision of this subchapter, the [ The ] owner of a motor vehicle

required to collect the tax imposed under this subchapter shall

report and pay [ send ] the taxes collected to the municipality or

county as provided by the ordinance or order imposing the tax.

(a-1) Except as provided by Subsection (a-2), if a

marketplace rental provider collects the tax imposed under this

subchapter, the marketplace rental provider shall report and pay

the taxes collected to the municipality or county as provided by the

ordinance or order imposing the tax. The marketplace rental

provider shall certify to the owner of a motor vehicle rented

through the provider that the provider has collected, reported, and

paid the tax to the municipality or county. An owner who in good

faith accepts the marketplace rental provider's certification is

not required to collect, report, or pay the tax to the municipality

or county.

(a-2) The owner of a motor vehicle rented through a

marketplace rental provider may elect to report and pay the tax

imposed under this subchapter to the municipality or county. If the

owner elects to report and pay the tax under this subsection:

(1) the owner must:

(A) register as required by Section 152.065, Tax

Code; and

(B) inform the marketplace rental provider in

writing of the election; and

(2) the marketplace rental provider shall forward the

tax collected by the provider to the owner.

SECTION 6. Section 152.001(8), Tax Code, is amended to read

as follows:

(8) "Gross rental receipts" means value received or

promised as consideration to the owner of a motor vehicle or the

marketplace rental provider for rental of the vehicle, but does not

include:

(A) separately stated charges for insurance;

(B) charges for damages to the motor vehicle

occurring during the rental agreement period;

(C) separately stated charges for motor fuel sold

by the owner of the motor vehicle; or

(D) discounts.

SECTION 7. Subchapter A, Chapter 152, Tax Code, is amended

by adding Section 152.0011 to read as follows:

Sec. 152.0011. MARKETPLACE RENTAL PROVIDER. (a) Subject

to Subsection (b), in this chapter, "marketplace rental provider"

means a person who:

(1) operates any type of marketplace, including a

store with a physical location, an Internet website, a software or

mobile application, or a catalog, by which the owner of a motor

vehicle lists, markets, or advertises the owner's motor vehicle for

rental by others for consideration in this state;

(2) facilitates the rental of the owner's motor

vehicle by another person by communicating between the owner and

the other person the terms of the agreement and the acceptance of

those terms; and

(3) directly or indirectly collects or processes the

receipts or rental charges paid by the person renting the motor

vehicle for the owner of the motor vehicle.

(b) The term "marketplace rental provider" does not include

a person who lists, markets, or advertises motor vehicles for

rental by others if:

(1) the person lists, markets, or advertises only

motor vehicles registered in the manner provided under Section

152.061; and

(2) the owners of the motor vehicles described by

Subdivision (1) collect, report, and pay the tax imposed under

Section 152.026 to the comptroller in the same manner as the tax

under Chapter 151 is collected, reported, and paid by a retailer

under that chapter.

SECTION 8. Section 152.045, Tax Code, is amended to read as

follows:

Sec. 152.045. COLLECTION OF TAX ON GROSS RENTAL RECEIPTS.

(a) Except as otherwise provided by this section or another

provision of [ inconsistent with this chapter and rules adopted

under ] this chapter, an owner of a motor vehicle subject to the tax

on gross rental receipts shall collect, report , and pay the tax to

the comptroller in the same manner as the tax under Chapter 151

[ Limited Sales, Excise and Use Tax ] is collected, reported , and

paid by a retailer [ retailers ] under that chapter [ Chapter 151 of

this code ].

(a-1) Except as provided by Subsection (a-2), if the motor

vehicle is rented through a marketplace rental provider, the

marketplace rental provider shall collect, report, and pay the tax

on gross rental receipts to the comptroller in the manner

prescribed by Subsection (a). The marketplace rental provider

shall certify to the owner of a motor vehicle rented through the

provider that the provider has collected, reported, and paid the

tax. An owner who in good faith accepts the marketplace rental

provider's certification is not required to collect, report, or pay

the tax.

(a-2) The owner of a motor vehicle rented through a

marketplace rental provider may elect to report and pay the tax on

gross rental receipts to the comptroller. If the owner elects to

report and pay the tax under this subsection:

(1) the owner must:

(A) register as required by Section 152.065; and

(B) inform the marketplace rental provider in

writing of the election; and

(2) the marketplace rental provider shall forward the

tax collected by the provider to the owner.

(b) The owner of a motor vehicle subject to the tax on gross

rental receipts or, if the motor vehicle is rented through a

marketplace rental provider, the provider shall add the tax to the

rental charge, and when added, the tax is:

(1) a part of the rental charge;

(2) a debt owed to the motor vehicle owner or

marketplace rental provider, as applicable, by the person renting

the vehicle; and

(3) recoverable at law in the same manner as the rental

charge.

(c) The comptroller may proceed against a person renting a

motor vehicle , the owner of the rented motor vehicle, or the

marketplace rental provider, as applicable, for any unpaid gross

rental receipts tax.

(d) In addition to any other penalty provided by law, the

owner of a motor vehicle subject to the tax on gross rental receipts

who is required to file a report as provided by this chapter and who

fails to timely file the report shall pay a penalty of $50. If the

motor vehicle is rented through a marketplace rental provider and

the provider is required to file a report under this chapter but

fails to timely file the report, the provider shall pay a penalty of

$50. The penalty provided by this subsection is assessed without

regard to whether the taxpayer subsequently files the report or

whether any taxes were due from the taxpayer for the reporting

period under the required report.

SECTION 9. Section 152.046(b), Tax Code, is amended to read

as follows:

(b) An owner of a motor vehicle on which the motor vehicle

sales or use tax has been paid who subsequently uses the vehicle for

rental [ shall collect the gross rental receipts tax imposed by this

chapter from the person renting the vehicle. The owner ] may credit

an amount equal to the motor vehicle sales or use tax paid by the

owner to the comptroller against the amount of gross rental

receipts due from the owner . This credit is not transferable and

cannot be applied against tax due and payable from the rental of

another vehicle belonging to the same owner.

SECTION 10. Section 152.063(b), Tax Code, is amended to

read as follows:

(b) Except as otherwise provided by Section 111.0041:

(1) the [ The ] owner of a motor vehicle used for rental

purposes shall keep for at least four years after the purchase of

the [ a ] motor vehicle records and supporting documents containing

[ the following ] information on the amount of:

(A) [ (1) ] total consideration for the motor

vehicle; and

(B) [ (2) ] motor vehicle sales or use tax paid on

the motor vehicle; and

(2) the owner of a motor vehicle used for rental

purposes and, if the motor vehicle is rented through a marketplace

rental provider, the provider shall keep for at least four years

supporting documents containing information on the amount of:

(A) [ (3) ] gross rental receipts received by the

owner or provider, as applicable, from the rental of the motor

vehicle; and

(B) [ (4) ] gross rental receipts tax paid to the

comptroller by the owner or provider, as applicable, on each motor

vehicle used for rental purposes by the owner.

SECTION 11. Section 152.065, Tax Code, is amended to read as

follows:

Sec. 152.065. REQUIRED PERMITS. A motor vehicle owner or a

marketplace rental provider required to collect, report, and pay a

tax on gross rental receipts imposed by this chapter and a seller

required to collect, report, and pay a tax on a seller-financed sale

shall register as a retailer with the comptroller in the same manner

as is required of a retailer under Subchapter F, Chapter 151.

SECTION 12. Subchapter D, Chapter 152, Tax Code, is amended

by adding Section 152.070 to read as follows:

Sec. 152.070. MARKETPLACE RENTAL PROVIDER'S REPORT. A

marketplace rental provider shall send to the owner of a motor

vehicle that is rented through the provider a report each month that

shows the amount of tax collected, reported, and paid for each motor

vehicle that the owner owns and that is rented through the provider.

The provider is not required to send the report to an owner who

elects to report and pay the tax under Section 152.045(a-2).

SECTION 13. This Act applies only to a rental agreement for

the rental of a motor vehicle entered into on or after the effective

date of this Act. A rental agreement for the rental of a motor

vehicle entered into before the effective date of this Act is

governed by the law in effect on the date the rental agreement was

entered into, and the former law is continued in effect for the

collection of taxes due and for civil and criminal enforcement of

the liability for those taxes.

SECTION 14. This Act takes effect October 1, 2025.