HAR § 18-251-2-02 — Example: Mr

Businessman travels from Oahu to Maui for business and rents a car from ABC Rental on Maui from 8:00 a.m. to 12:00 p.m., when Mr. Businessman returns to Oahu. At 1:00 p.m. ABC Rental rents the same car to Ms. Visitor until 8:00 p.m. Assuming ABC Rental is not a car- sharing organization, ABC Rental is subject to the surcharge tax, for the daily rate for each portion of a day’s rental. In other words, surcharge tax is due for two days total rental. Example: Mr. Tourist travels to Maui and rents a car. He picks up his car at 11:00 a.m. on Friday and returns it to the car rental station at 11:01 a.m. on Monday. The rental car company charges Mr. Tourist the rental rate for three days and one hour. Mr. Tourist has rented the car for three days and a portion of a fourth day; therefore, surcharge tax is due for four days total rental. Example: Ms. Mover is moving to a new house and rents a truck for a day. She picks up the truck at 9:00 a.m. on Wednesday and returns it to the truck rental location at 9:10 a.m. on Thursday. The rental company has a grace period of fifteen minutes and only charges Ms. Mover for one day’s rental. Ms. Mover has rented the truck for one day, and surcharge tax is due for one day total rental. (c) The substitution of a motor vehicle or vehicle with another motor vehicle or vehicle shall not incur an additional surcharge tax amount for a day or portion of a day if: (1) The substitution is made on the same rental contract or agreement; (2) The rental or lease period is uninterrupted, continuous; and (3) If the rental or lease period is longer than one day, the rental or lease period shall occur over consecutive days. When there is a substitution of vehicle, the burden is upon the lessor to show that the substitution is proper and not a surcharge tax avoidance scheme and subject to the surcharge tax. Example: Mr. Sales flies to Oahu for a one-day trip. He rents a car at the airport and drives off to his meeting in Kaaawa. Before he gets too far, Mr. Sales realizes that the car is not in very good condition. He decides to return to the airport station and exchange the car for another one in proper working condition. The second car is a substitute for the first car, therefore, the surcharge tax is due for one day total rental. Example: To ease traveling to neighbor islands for its customers, ABC Rentals (ABC) has a “one-stop 7-day islandhopping” special: a customer signs one rental car contract; pays the rental fee for seven days; and may pick up a car from any of ABC’s business locations on any island during that time period. Ms. Visitor decides on the special rate. She picks up a car at the airport on Oahu at 8:00 a.m. on Monday; returns the car to the Oahu station at 8:00 a.m. on Tuesday; and flies to Molokai, picking up a car there at 9:00 a.m. At 5:00 p.m., she returns the car to the Molokai station and flies to Maui, picking up a car at 6:00 p.m. Ms. Visitor spends the rest of the week on Maui, returning the car to the Maui station at 7:55 a.m. the next Monday. Ms. Visitor actually used three different cars on Tuesday. The second and third cars she used are substitutes for the first car; thus, the surcharge tax is due for seven days’ total rental. (d) The surcharge tax due on a motor vehicle or vehicle which is not returned to the lessor or is abandoned by persons renting or leasing the motor vehicle or vehicle shall be calculated on: (1) The days or portion of days set forth in the rental contract or agreement; or (2) The days or portion of days for which the person renting or leasing the motor vehicle or vehicle is actually charged if that number of days is greater than set forth in the rental contract or agreement. Example: ABC Cars rents a car to Jane and John Doe. The rental contract states that the car will be rented from Monday 9:00 a.m. and must be returned by Wednesday 9:00 a.m. Because they are late for their flight back to the mainland, instead of returning the car to the car rental station, the Does leave the car at the airport terminal. The car is towed away by airport security. ABC does not locate the car until the following Monday at 11:00 a.m; thus, the car is gone from the car rental station for a total of eight days. The surcharge tax, however, is only calculated on the two days set forth in the Does’ contract.