A coalition of bipartisan lawmakers, the Virginia Municipal League, the American Car Rental Association and Virginia car rental operators are calling on the Virginia General Assembly in response to the rise of peer-to-peer vehicle-sharing companies currently facilitating rental transactions without paying, what they say, are appropriate taxes.

Under Virginia’s Motor Vehicle Rental Tax statutes, peer-to-peer vehicle rentals are subject to a 10% tax rate just like vehicle rentals through traditional car rental companies.

To address this growing concern, the coalition SUPPORTS HB 891 and HB 892 sponsored by Delegate Mark Sickles, and SB749 and SB750 sponsored by Sen. John Cosgrove. This proposed bipartisan legislation will clarify that, under existing Virginia law, the platform — not vehicle owners or “hosts” — is responsible for collecting and remitting all appropriate rental taxes.

“This legislation will not raise taxes and instead will resolve a critical tax collection issue throughout the Commonwealth," Michelle Gowdy, executive director of the Virginia Municipal League, said in a statement. "The bill will require peer-to-peer vehicle rental companies to collect and remit state and local taxes, the same taxes as other vehicle rental companies currently operating in Virginia must collect and remit, and in doing so, preserve essential state and local tax revenues in an equal fashion."

According to the Virginia Dept. of Taxation’s Fiscal Impact Statement, while “both peer-to-peer shared vehicles and commercially owned rental vehicles are currently subject to the full ten percent Motor Vehicle Rental Taxes … compliance within the peer-to-peer rental industry is extremely low.”

Proponents say the proposed legislation directly clarifies that the 2019 Retail Sales Tax Marketplace Facilitator Law applies to peer-to-peer vehicle rental platforms.

“Care Before You Share” coalition members agree with the ACRA that all consumer transactions, including peer-to-peer vehicle rentals, should be governed in a fair and consistent way. The coalition members believe the proposed legislation is an appropriate solution for how rental car operations are defined and regulated in Virginia.