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Rental and leasing taxes

This article applies to:AvaTax

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
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  

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           

 

PR060230

Rental or Lease Pursuant to a Rental-Purchase Agreement (Rent-to-Own) for Rentals of AV Equipment - Non-Business Use

 

PR060240

Rental or Lease Pursuant to a Rental-Purchase Agreement (Rent-to-Own) for Rentals of Furniture - Non-Business Use

 

PR060250

Rental or Lease of Audio-Visual Media

 

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:

Name What it means Data type Attribute type Possible values
IsColoradoSMMRegistered Indicates the product has been registered as part of the Colorado Special Mobile Machinery (SMM) Rental Program. Boolean Product
  • True
  • False
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
  • True
  • False
IsIntercompany Indicates whether the equipment is leased or rented to a parent, subsidiary, or sister corporations. Boolean Transaction
  • True
  • False
IsIndeterminateLength Indicates that a lease or rental of property is for an indeterminate period of time. Boolean Transaction
  • True
  • False
IsHeavyMachinery Indicates the product leased or rented is heavy equipment. Boolean Product
  • True
  • False
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
  • True
  • False
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