HAR § 18-251-1-04 — RENTAL MOTOR VEHICLE, TOUR VEHICLE, AND CAR-SHARING VEHICLE SURCHARGE TAX Example: XYZ Wheels rents motorcycles and bicycles

The motorcycles are subject to the surcharge tax. Because bicycles are not self-propelled, however, they are not subject to the surcharge tax. (b) “Rental motor vehicle” or “vehicle” shall not include: (1) Vehicles, which are not governed by chapter 286, HRS, and do not use the public highways; and (2) Mopeds, as defined in section 286-2, HRS. Example: DEF Resort (DEF) rents mopeds and golf carts to its guests for use on the resort premises, which include two golf courses. The mopeds, which are specifically excluded, and golf carts, which are not registered under chapter 286, HRS, and do not use the public highways, are not subject to the surcharge tax. (3) Any trucks, truck-tractors, tractor-semitrailer combinations, or truck-trailer combinations, with: (A) A manufacturer’s nominal carrying capacity of one thousand pounds or more; and (B) A barrier or separation between the operator’s compartment and the cargo area. Example: Construction Equipment Company (CEC) leases heavy equipment and vehicles used to transport construction equipment to construction companies for use on their projects. All of CEC’s equipment and vehicles are trucks, truck-tractors, tractor-semitrailer combinations, or truck-trailer combinations of one thousand pounds (one-half ton) or more capacity or larger and are never leased for periods longer than six months. CEC’s vehicles are exempt from the tax. (4) Cargo vans with no more than two seats, including the driver’s seat; provided that vans with recreational vehicle converter packages and vans with quick release passenger seats shall not be classified as cargo vans. Example: DEF Rentals (DEF) rents cargo vans of all sizes to people and businesses moving to new locations; none of these cargo vans are rented for more than a few weeks at a time. The cargo vans are exempt from the tax. Example: Do-It-Yourself Rentals (Do-It-Yourself) rents cargo vans. Most of Do-It- Yourself’s vans are large cargo vans with carrying capacities of 1,500 pounds or more. Do- It-Yourself also rents six passenger vans because some of the company’s customers prefer smaller vans. The six passenger vans are equipped with quick release seats. Do-It-Yourself has removed all of the passenger vans’ quick release seats to allow for the transportation of cargo; only the driver and the passenger seat next to the driver’s seat remain. Although Do-It-Yourself only rents these converted vans for transporting cargo, the vans are nevertheless passenger vans (whether temporarily or permanently converted), not cargo vans, and, Do-It-Yourself’s six converted passenger vans, therefore, are subject to the surcharge tax. (5) A motor vehicle or vehicle used by businesses whose services provide a driver with the motor vehicle or vehicle. A driver is a person who drives or is in actual physical control of the motor vehicle or vehicle or who is exercising control or steering a vehicle being towed or pushed by a motor vehicle or vehicle. Example 1: ABC Cabs (ABC) provides taxi and limousine service to its customers. On occasion, a customer will hire a car (with driver) for the whole day. ABC’s service includes a driver, therefore, its vehicles are not subject to the surcharge tax. Example 2: Super Service (Super) provides limousine service, using stretch limousines with passenger capacities of under eight persons and passenger vans with passenger capacities between eight to twenty-five persons. Because Super’s service includes a driver, its stretch limousines are not subject to the surcharge tax. Super’s passenger vans, however, are subject to the tour vehicle surcharge tax set forth in section 18-251-2-06.