British Columbia exempts some from car rental tax

Clients who use the services of major car sharing firms in British Columbia will not have to pay the provincial tax added to all car rentals in this Canadian province. BC made the decision only days after the neighbouring US state of Washington decided that car sharing—offered by Zipcar—qualified as a rental and that all clients would be required to pay the same taxes when they hire a vehicle. BC’s Liberal government announced the tax waiver in its annual budget, which also focused on the introduction of a new form of carbon tax.

According to the car rental tax waiver, any client who hires a vehicle for a period of less than eight consecutive hours is not required to pay this surcharge. Other North American jurisdictions to exempt car sharers from the rental tax include Oregon and California. In Washington, however, local tax authorities determined earlier this month that car sharing was tantamount to renting a vehicle, even though Christine Gregoire, the state’s governor, came out in support of car sharing companies and called for a more progressive form of taxation.

Much of the ongoing debate on whether or not customers of firms like Zipcar should be required to pay the same provincial or state taxes as those who rent a vehicle from Avis, Hertz, Thrifty or any other prominent firm, revolves around a single, contentious question: is car sharing equivalent to renting a vehicle? Those who rely on the services of car sharing firms clearly answer in the negative. Many point out that car sharers make a conscious decision to give up their personal automobile and instead rent one on an hourly basis in order to run errands in their hometown, while those who rent cars on a daily basis are usually on private or business trips in other cities and, as such, this has no effect on whether or not they maintain their own car. Car sharing companies point out that their service helps the environment, as it tends to lower the number of cars are on the road.

www.zipcar.com