Rental and leasing taxes
Learn how to use Avalara to calculate rental taxes, which are a tax on the rental or lease of manufacturing, commercial or industrial equipment, consumer goods, and passenger automobiles in the US & Canada.
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Important Calculation of rental and leasing taxes is not compatible with all business applications, and may require custom development using the AvaTax APIs . Contact your Account Manager if you're interested in using Avalara to calculate checkout bag fees. |
Where you collect tax
Configure where you collect rental taxes. Avalara supports calculation of these taxes in the United States and Canada.
Tax codes
Use one of the following tax codes to calculate rental taxes:
| Tax code | Tax code name | Additional information |
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| PR091000 | Rental or Lease of Tangible Personal Property - Operating Lease | |
| SE031000 | Service Contract for Use of Special Equipment - Control and discretion on equipment usage maintained by owner | |
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PR060210 |
Rental or Lease of Tangible Personal Property Pursuant to a Rental-Purchase Agreement (Rent-to-Own) excluding rentals of Audio Media, Audio Equipment or Furniture - Non-Business Use |
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PR060230 |
Rental or Lease Pursuant to a Rental-Purchase Agreement (Rent-to-Own) for Rentals of AV Equipment - Non-Business Use |
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PR060240 |
Rental or Lease Pursuant to a Rental-Purchase Agreement (Rent-to-Own) for Rentals of Furniture - Non-Business Use |
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PR060250 |
Rental or Lease of Audio-Visual Media |
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| PR100300 | Standard Passenger Car Rentals | Passenger car rentals that do not include motorcycles, tow trucks, trailers, heavy vehicles, or vehicles requiring a special license such as a CDL license. |
| PR100340 | Accessory Equipment - associated with car rentals | Equipment that is optional to the customer that include GPS, child safety seats, bike racks, toll responders (EZ-Pass), luggage racks, Sirius XM radio, etc. |
| PR100320 | Fees (optional) - associated with car rentals | Fees that are optional to the customer that include fuel charges, insurance, personal accident insurance fees, recoupment fees, cleaning fees, fees for additional or underage drivers i.e. drivers under the age of 25, or other separately stated charges |
| PR100330 | Fees (mandatory) - associated with car rentals | Fees that are mandatory to the customer that include fuel charges, insurance, collision damage waiver fees, personal accident insurance fees, recoupment fees, cumpulsory insurance, cleaning fees, fees for additional or underage drivers i.e. drivers under the age of 25, or other separately states charges |
Attributes
To calculate rental taxes, Avalara may require additional information about the products or services that you sell. You send this information with your transactions as attributes. Different jurisdictions require different attributes to calculate taxes accurately, so it's best practice to send all of the attributes that apply to your business, products, or services. Alternatively, you can use the ListParametersUsage API endpoint to find the specific attributes that are required for each region.
The attribute types are:
- Transaction: These attributes apply only to a specific transaction.
Send the attributes with the individual transaction API call using the TransactionParameterModel. - Product: These attributes apply to all sales of a specific product or service.
Add attributes when you map your item to an Avalara tax code. - Location: These attributes apply to all transactions for a specific company location.
Add attributes to a company location. - Company: These attributes apply to all transactions for the company.
Add product and service attributes to your company profile.
| Name | What it means | Data type | Attribute type | Possible values |
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| IsColoradoSMMRegistered | Indicates the product has been registered as part of the Colorado Special Mobile Machinery (SMM) Rental Program. | Boolean | Product |
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| IsTexasTERPEligible | Indicates the products are eligible for the Texas Emissions Reduction Plan (TERP) Off-Road, Heavy-Duty Diesel Equipment Surcharge, which requires the equipment to be off-road, diesel, and have horsepower of 50 or greater. | Booelan | Product |
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| IsIntercompany | Indicates whether the equipment is leased or rented to a parent, subsidiary, or sister corporations. | Boolean | Transaction |
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| IsIndeterminateLength | Indicates that a lease or rental of property is for an indeterminate period of time. | Boolean | Transaction |
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| IsHeavyMachinery | Indicates the product leased or rented is heavy equipment. | Boolean | Product |
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| NumberOfDays | The number of days a product is rented or leased. | Numeric | Transaction | A numeric value, representing the number of days a product is leased or rented. |
| IsOperatorProvided | Indicates whether leased equipment is provided with an operator. | Boolean | Transaction |
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