What is it?
A tax on the rental of motor vehicles in Virginia. The tax applies to vehicles rented for less than 12 months, regardless of what type of dealer you rent it from.
For most passenger vehicles, the motor vehicle rental tax equals 10% of the amount that you pay for the rental. The tax is broken down into three parts:
- 4% Rental Tax on the rental of any vehicle with a gross vehicle weight or gross combined weight rating of 26,000 pounds or less;
- 4% Local Tax on the rental of any vehicle, regardless of weight, except motorcycles or mobile homes;
- 2% Rental Fee on the rental of any vehicle, regardless of weight, except motorcycles or mobile homes.
The amount that is subject to the tax does not include:
- Charges for violations, citations, or fines and related penalties and fees;
- Delivery, pickup, recovery, or drop charges;
- Pass-through charges;
- Transportation charges;
- Third-party service charges; and
- Refueling surcharges.
Several types of transactions are not subject to this tax:
- Arrangements between a taxicab service and cab drivers;
- Arrangements between a driver training school and its students;
- Rentals of self-contained mobile computerized axial tomography scanners to a nonprofit hospital or a cooperative hospital service organization;
- Rentals of self-contained mobile units designed exclusively for human diagnostic or therapeutic service to a nonprofit hospital or a cooperative hospital service organization;
- Rentals to private schools for use in driver education instruction;
- Rentals to the federal or Virginia government, or political subdivisions of the Commonwealth; and
- Rentals for the purpose of re-rental.
- Beginning October 1, 2020, peer-to-peer vehicle sharing when the vehicle owner has 10 or fewer vehicles registered on any combination of sharing platforms See Peer-to-Peer Vehicle Sharing Tax for details.
For more information, see our Motor Vehicle Rental and Vehicle Sharing Tax Guidelines.
How to register:
- New businesses: Register online or by mail using the Business Registration Application (Form R-1).
- Existing businesses: If your business is already registered, log in to your Business Account and add the new tax type to your registration. If you don't have an online services account, enroll now. Or, add the new tax type by mail using Form R-1.
How to File and Pay
Beginning October 1, 2020, peer-to-peer vehicle sharing platforms file form P2P. See Peer-to-Peer Vehicle Sharing Tax for details.
File the Virginia Motor Vehicle Rental Tax and Fee Return, Form MVR-420. Returns are due on the 20th of the month following the close of the filing period.
File Form MVR-420 electronically. If you are unable to file and pay electronically, please submit an Electronic Filing Waiver Request.
Important: Motor Vehicle Rental Tax and Fee Returns use a different set of locality codes than do the other sales and use taxes. We’ve programmed these into our electronic filing application. If you need a hard copy of these codes, you’ll find them in our forms library.
For more information, please see Va. Code § 58.1-1734-1741.
Please visit the Virginia Department of Motor Vehicles (DMV) for information about taxes on the sale or lease (12 months or more) of a motor vehicle.