Short Term Lessor Fee's & FAQ's

Overview:

The Governmental Services Fee is 6% up through 09/30/2009 and 10% from 10/01/09 and forward per NRS 482.313  Washoe and Clark County Car Rental Fees are 2% per NRS 244A.810 and NRS 244A.860, upon the short term lease (31 days or less) of passenger vehicles commencing in this state.To see an example of how a short-term lease may be calculated please click here.

Who is affected?

Any entity that holds a license as a short term lessor with the DMV.

What is a short term lessor?

A person who has leased a vehicle to another person for a period of 31 days or less, or by the day or by the trip and has been licensed pursuant to NRS 482.363.     (NRS 482.053)

What is the definition of a passenger car?

A passenger car is defined as a motor vehicle designed to carry 10 persons or less.  Passenger car does not include motorcycle, power cycles, motor driven cycles, motor trucks, or motor homes.  (NRS 482.087, 482.071, & 482.073)

What is the governmental services fee to rent a passenger vehicle?

The fee charged and collected is 10 percent of the amount for which the passenger vehicle was leased. The fee does not include any fee or tax imposed by a governmental entity.

In charging and collecting the governmental services fee the following items must not be included in the total amount for which the passenger car was leased:

1.    The amount of any fee charged and collected for the County Short-Term rental.

2.    The amount of any charge for fuel used to operate the passenger car.

3.    The amount of any fee or charge for the delivery, transportation or other handling of the passenger car.

4.    The amount of any fee or charge for insurance, including, without limitation, personal accident insurance, extended coverage or insurance coverage for personal property.

5.    The amount of any charges assessed against a short-term lessee for damages for which the short-term lessee is held responsible.
(NRS 482.313)

Is there a limit to the fees that can be charged for a Waiver of Damages or an Additional Driver?

Nevada Revised Statutes (NRS) 482.31565(2) limits the dollar amount a short-term lessor may charge for a waiver of damages to $22. This amount is to be adjusted for each fiscal year by adding thereto the product of that amount multiplied by the percentage increase in the Consumer Price Index West Urban for All Urban Consumers (All Items) between the calendar year ending on December 31, 2005, and the calendar year immediately preceding the fiscal year for which the adjustment is made.

Effective July 1, 2021, if the vehicle has a manufacturer’s suggested retail price (MSRP) of more than $60,000, NRS 370.482. 13565(2)(b) limits the amount a short-term lessor may charge for a waiver of damages to no more than $150. This amount is to be adjusted for each fiscal year by adding thereto the product of that amount multiplied by the percentage increase in the Consumer Price Index West Urban for all Urban Consumers (All Items) between the calendar year ending on December 31,2017 and the calendar year immediately preceding the fiscal year for which the adjustment is made.

NRS 482.3158(l) (f) also requires that the maximum amount charged for an additional driver not exceed $10.00 per driver. This amount must be adjusted in the same manner as the waiver of damages described above.

The current fiscal year calculations for these fees can be found here.

What is the recovery surcharge?

The recovery surcharge is a fee charged for the reimbursement of vehicle licensing fees and taxes paid by the short term lessor.  The recovery surcharge was eliminated effective 10/1/2009.  Prior to the latest enactment date, several changes have affected this fee.  The lessor is advised to contact the Department of Taxation for clarification of the statutes prior to 10/1/2009.

What are Vehicle Licensing Costs?

As of 10/1/2009, the short-term lessor is allowed to charge its customer a fee to recover its vehicle licensing costs that have been paid by the short-term lessor.  Vehicle Licensing Fees are defined as:
    Registration fees
    Certificate of Title
    License plates
    License plate decals, stickers and tabs
    Inspection fees
    Basic/supplemental government services taxes (registration fees)

The short-term lessor is required to make good faith estimates of its vehicle licensing costs for each calendar year and the charge that must be imposed in each lease to recover those costs.

What are the reporting requirements for the Vehicle Licensing Costs?

The short-term lessor is required to report on an annual basis to the Department of Taxation the amount of its vehicle licensing costs for the immediately preceding calendar year and the amount of money collected by the short-term lessor for the recovery of its vehicle licensing costs.  If the estimate is over or under the actual costs, the short-term lessor is required to adjust the estimate for the subsequent calendar year.

What is the 2% county return fee?

Effective April 1, 2004 Washoe County Board of Commissioners enacted a 2% County Car Rental Fee for the lease of passenger vehicles commencing in Washoe County. NRS 244A.810 authorizes the county commissioners whose population is 100,000 or more but less than 400,000, to impose a fee on the lease of passenger car by a short-term lessor. This fee is by ordinance only, and may only be up to 2% of the total amount for which the passenger car was leased.

Effective July 1, 2005 Clark County Board of Commissioners enacted a 2% County Car Rental Fee for the lease of passenger vehicles commencing in Clark County. NRS 244A.860 authorizes the county commissioners whose population is 400,000 or more to impose a fee on the lease of certain passenger cars by a short-term lessor. This fee is by ordinance only, and may only be up to 2% of the total amount for which the passenger car was leased.

The County Car Rental fee cannot be imposed on the rental of a replacement vehicle, defined as

    A vehicle that is rented temporarily to a person for the purposes of repairs to that person's leased or owned vehicle.
    A vehicle that is used by a person in place of a motor vehicle owned by the person which is unavailable for use because of mechanical breakdown, repair, service, damage or loss as defined in the owner’s policy of liability insurance for the motor vehicle.

Short term lessors located in Washoe and/or Clark Counties must also file the County Car Return and pay the County Car Return Fee to the Department on or before the last day of the month following each calendar quarter.

The 2% fee is charged on everything but any Governmental fee or tax (Example 10% Governmental Services fee, Sales tax or airport concession fee).

What is subject to sales/use tax on the rental of passenger cars?

The lessor has the option when purchasing a passenger car for lease/rental within Nevada to:

1. Pay the sales tax due in this state on the cost of the passenger car; or
2. Pay the sales tax on the gross lease or rental charges for the lease or rental of the passenger car within this state

The lessor must make this election not later than the date upon which the first tax return is due following the purchase of that property for lease. There is no longer a form that is required to make this election.

If the lessor has chosen to pay sales tax on the cost of the passenger car, there is no additional tax due and the lessor cannot collect tax from the lessee on the gross lease or rental charge.

If the lessor has chosen to pay sales tax on the gross lease or rental charges for the lease or rental of the passenger car then the lessor may seek reimbursement from the lessee.

A lessor who elects to pay tax measured by the gross lease is not required to pay the sales tax for the purchase of parts for the vehicle committed to lease in this state if the lessor gives a re-sale certificate to the vendor.

Mandatory charges for any service, activity or function made in conjunction with the lease are considered part of the gross lease or rental charges and are subject to sales tax.  This may include but are not limited to:

A fee or charge for mileage

A fee or charge for return, commonly known as “drop off charge” (not to be confused with an airport concession fee)

A fee for the reinstatement of a lease

Optional charges, separately stated, made in conjunction with the lease are not subject to sales tax.  This may include but are not limited to:

            Charge for collision damage waiver

            Charges for insurance

            Charges for Fuel

            Charges for delivery, or other handling of the property

            (NAC 372.080)

Lease or rental charges do not include:

            A fee for access to an airport

            Any late payment penalty

            Any charges for the reimbursement of taxes

            Any disposition fees

How should these items be listed on the lease/rental contract?

At the time the lease commences, the short-term lessor must provide the lessee with a lease agreement which clearly discloses all charges for the entire lease, excluding charges that cannot be determined at the time the lease commences.  At the time the short-term lessor provides a price quote or estimate for the short-term lease of the passenger car, the lessor must disclose the existence of any vehicle licensing costs and any other separately stated additional charges.

What are short term lessors required to file with the Department of Taxation?

All short term lessors shall file a return and pay the governmental services fee to the Department of Taxation on or before the last day of the month following each calendar quarter.  The return must include governmental services fees collected by the short term lessor, any vehicle licensing costs paid to DMV, and any amounts collected for recovery of vehicle licensing costs.

How long is a short term lessor required to keep their records?

Pursuant to NRS 372.734, a business is required to keep records for at least 4 years.  There is no time specified for record-retention under NRS 482.315.