Virginia’s peer-to-peer vehicle sharing tax, passed in April, takes effect on October 1. Generally, vehicle owners with up to ten shared vehicles will be subject to a 6.5% gross tax. The law obligates vehicle sharing platforms to collect the tax on behalf of the owners if the platform has established sufficient contact with the state. This week, the Virginia Department of Taxation published informal guidance on the new tax.
A platform is required to collect the tax if it meets the marketplace facilitator thresholds of $100,000 in annual Virginia revenue or 200 Virginia transactions. Additionally, a platform is required to collect the tax if, among other things it performs the activities of: owning or operating the infrastructure or technology that brings buyer and seller together; listing vehicles for sharing; payment processing; branding transaction as those of the platform, or providing customer assistance. Vehicle owners are obligated to certify to sharing platforms, and sharing platforms are obligated to ask vehicle owners, whether the owner owns more or less than ten vehicles.