Automobile Rental Excise Tax Registration

About

Description: This is an excise tax imposed on the rental of passenger vehicles designed to carry nine or fewer passengers that are rented for a period of 60 days or less. The tax is not imposed on delivery trucks, motorcycles, and motorized bicycles.

Tax Rate: 5% tax on the rental charge for certain vehicles. This is in addition to the state sales tax, use tax, and local option tax, if any.

Distribution of Funds: Road Use Tax Fund

Due Date(s) of Returns: This excise tax is remitted on the sales and use tax return. If a taxpayer collects this tax, it must be remitted on a monthly basis, due on the last day of the month following the month in which the tax was collected.

Code Citation: IC 423C

Who Applies: Anyone renting vehicles that are subject to the excise tax. This excise tax is reported and remitted on a monthly basis electronically through GovConnectIowa. No permit other than an Iowa sales or use tax permit is required to collect this tax.

When To Apply: Before operations begin in Iowa.

Initial Requirements: An automobile rental establishment must collect the Automobile Rental Excise Tax by adding the tax to the rental price of the automobile. When collected, the tax must be stated as a distinct item separate and apart from the rental price and other taxes.

Duration: Does not pertain.

Processing Time: 4-6 weeks. Submitting the application electronically on the Department’s GovConnectIowa website speeds the process.

Fee Structure: No fees.

Renewal Requirements: Does not pertain.