Utah – Taxability of Optional Fuel Charges on Car Rentals

SALT Report 1402 – The Utah rule that imposes sales or use tax on the lease or rental of a motor vehicle has been amended to exempt fuel charges if the fuel charges are optional and separately stated on the invoice.
Pursuant to Utah Code Ann. Section 59-12-103
1) (a) A lessor shall compute sales or use tax on all amounts received or charged in connection with a lease or rental of tangible personal property.
(b) Fuel charges in a transaction for the lease or rental of a motor vehicle are not subject to sales tax pursuant to Subsection 59-12-104(1) if the fuel charges are:
  • Optional; and
  • Separately stated on the invoice

2) When a lessee has the right to possession, operation, or use of tangible personal property, the tax applies to the amount paid pursuant to the lease agreement, regardless of the duration of the agreement.

3) Lessors of tangible personal property shall furnish an exemption certificate when purchasing tangible personal property subject to the sales or use tax on rental receipts. Costs of repairs and renovations to tangible personal property are exempt if paid for by the lessor since it is assumed that those costs are recovered by the lessor in his rental receipts.

4) If a person provides tangible personal property along with an operator shall:

  • Pay sales and use tax at the time the tangible personal property is furnished, and
  • Collect sales and use tax at the time of service if the service is subject to sales and use tax

For Further Information:

Utah State Tax Commission – R865-19S-32