Special Situations

• Buying items to rent to others
  
  If you are in the rental business, you do not owe retail transaction privilege tax on items you buy to rent to others. These sales are considered sales for resale and are exempt.
  
  
• Charges added to rent
  
  Charges for items such as insurance, fuel, mileage, collision damage waiver and maintenance are taxable as part of your rental income. This is true even though the charges may be billed separately from the rental charge.
  
  
• Rent for re-rent
  
  If you rent items to someone who re-rents the items, you aren't taxable on your rental income. To claim this exemption, the lessor must obtain a properly completed resale certificate from the lessee. Rental of items such as bedding and linens to hotels/motels is not considered rent for re-rent.
  
  
• Renting to contractors or non-profit organizations
  
  Rentals of equipment to contractors or most nonprofit organizations (except qualifying hospitals, community health centers or health care organizations) are subject to tax.  
  
  
• Lease-purchase
  
  The rental income from leasing an item that has a purchase option is taxed under personal property rentals until the item is purchased. Income from the eventual sale is taxed as a retail sale.
  
  
• Mobile Equipment
  
  Equipment that is leased and is not permanently or semi-permanently installed in one location is taxed at the location of the leasing company.
  
  
• Motor Vehicle
  
  Motor Vehicles leased for a minimum of twenty-four (24) months are taxed at the location of the dealership rather than the location of the lessor.