HAR §18-251-2-06. Surcharge tax on tour vehicles; imposition and rates

There is levied on the tour vehicle operator, and assessed and collected each month, a tour vehicle surcharge tax for each tour vehicle used or partially used during the month at the rates set forth in section 251-2(b), HRS. (1) $65 each month for each tour vehicle that falls into the over twenty-five passenger seat category; and (2) $15 each month for each tour vehicle that falls into the eight to twenty-five passenger seat category. Example: ABC Bus Tours (ABC) owns ten buses that fall in the over twenty-five seat category and sells around-the-island tours on Hawaii. ABC also provides “as needed” transportation services HRS §251-2 HRS §251-2 HRS §251-2 §18-251-2-07 RENTAL MOTOR VEHICLE, TOUR VEHICLE, AND CAR-SHARING VEHICLE SURCHARGE TAX 251- 12 (Unofficial Compilation as of 12/31/2025) to large groups. In January 1992, ABC conducts tours using five buses; uses one bus to transport one group of visitors that disembarked from a ship in Hilo to a luau and back to the ship; and does not use the remaining four buses, which are serviced that month. The tour vehicle surcharge tax for the month of January 1992 is imposed on six buses. Example: DEF Sightseeing (DEF) owns ten vans and minibuses with passenger capacities between eight to twenty-five persons. As part of a model transportation project, DEF agrees to use all of its vehicles to transport workers from neighborhood sites to central locations downtown in the morning and to return the workers back to the neighborhood sites in the early evening. The project lasts for one month. DEF also uses four of the vehicles in the evening to regularly transport tourists to places of interest. DEF uses the same vehicles each evening. One evening, however, one of the vehicles breaks down and DEF uses an alternate minibus for an hour. Because five of the vehicles only were used for commuting purposes, these are not subject to the surcharge tax for the month of the project. The surcharge tax is imposed on the other five vehicles — the four that were usually used in the evenings and the additional one used on the night of the breakdown. The total tour vehicle surcharge tax for the month is imposed on five minibuses. [Eff 1/27/92; am 1/2/93; am 4/8/16] (Auth: HRS §§231-3(9), 251-15(b)) (Imp: HRS §251-2) §18-251-2-07 Surcharge tax on tour vehicles; cost not deductible from public service company tax. The tour vehicle surcharge tax imposed on a tour vehicle operator is not deductible from gross income subject to the public service company tax, chapter 239, HRS. Eff 1/27/92; am 1/2/93; am 4/8/16] (Auth: HRS §§231-3(9), 251-15(b)) (Imp: HRS §251-2) SUBCHAPTER 5.1 IMPOSITION OF CAR-SHARING VEHICLE SURCHARGE TAX 18-251-2.5-01 Car-sharing vehicle surcharge tax. (a) For purposes of the car-sharing vehicle surcharge tax: “Average paid use period” means the total time a lessor’s vehicles are rented or leased divided by the total number of rentals entered into. Average paid use period is calculated per taxable period. “Organization” means any person or company as defined in section 237-1, HRS. “Paid use period” means the total time a lessor’s vehicle is rented or leased and is computed from the time the vehicle is rented or leased until the time the vehicle becomes available for rent or lease to a different customer or becomes unavailable to any customer. “Paid use period” shall not include any complimentary grace period provided by a lessor. “Taxable period” means the organization’s taxable year. (b) For purposes of determining the total number of rentals entered into by a lessor, a single rental continues until the vehicle rented becomes available to a different customer or becomes unavailable to any customer. (c) The determination of whether a lessor is a car-sharing organization is made on a per organization basis. Example: Customer rents a vehicle from Lessor at 10:00 a.m. Customer parks and shops for one hour. During the time Customer is shopping, the vehicle remains available only to Customer and is not available to other customers of Lessor. Customer then returns to the vehicle, drives home to deliver her purchases, and relinquishes the vehicle at 1:00 p.m. the same day, at which time the vehicle becomes available to other customers of Lessor. Lessor has entered into one rental for which the paid use period is three hours. Even if Customer is not charged for the time she is shopping, the rental in this example may not be treated as two separate rentals because the vehicle did not become available to a different customer of Lessor during that time and remained available to Customer. Example: Customer rents a vehicle from Lessor at 8:00 a.m. and relinquishes the vehicle at 8:00 a.m. the following day. The vehicle becomes available to other customers of Lessor at that time. Customer then decides she needs to use a car again, immediately returns to the same vehicle, rents the vehicle from Lessor at 8:02 a.m., and relinquishes the vehicle at 10:02 a.m. the same day. Because the vehicle became available to other customers between periods of rental, Lessor has entered into two rentals, one with a paid use period of one day and another with a paid use period of two hours. HRS §251-2 HRS §251-2.5 RENTAL MOTOR VEHICLE, TOUR VEHICLE, AND CAR-SHARING VEHICLE SURCHARGE TAX §18-251-2.5-02 251- 13 (Unofficial Compilation as of 12/31/2025) Example: Customer rents a vehicle from Lessor at 8:00 a.m. The vehicle is faulty and Customer returns the vehicle to Lessor’s facility at 8:10 a.m., at which time it is put into the shop for maintenance, repaired and re-enters Lessor’s fleet the following day. The paid use period is ten minutes because after ten minutes of rental the vehicle became unavailable to any customer. Example: Customer rents a vehicle from Lessor at 8:00 a.m. and returns the vehicle at 10:00 a.m. the following day. Lessor has entered into one rental for which the paid use period is twenty-six hours. Note that even if Lessor is a car-sharing organization, Lessor is liable for tax for two days at the rate set forth in section 251-2, HRS, because the paid use period is six hours or more. Example: Lessor rents a vehicle for a two-day period, beginning at 9:00 a.m. Monday and ending 9:00 a.m. Wednesday by which time the vehicle must be returned to lessor. The customer returns the vehicle at 5:00 a.m. Wednesday. The paid use period is forty-eight hours unless Lessor can prove that the vehicle became available to other customers at 5:00 a.m. or became unavailable to any customer at 5:00 a.m. Note that even if Lessor is a car-sharing organization, Lessor is liable for tax for two days at the rate set forth in section 251-2, HRS, because the paid use period is six hours or more. Example: Customer rents a vehicle from Lessor at 1:00 p.m. Lessor offers a complimentary grace period based on traffic conditions. Customer returns the vehicle at 3:15 p.m. the same day. Per Lessor’s terms, Customer’s rental qualifies for a complimentary grace period of fifteen minutes. The paid use period for the rental is two hours. Example: For a taxable period, Lessor enters into seventy-five separate rentals consisting of twenty-five thirty-minute rentals, twenty-five one-hour rentals, and twenty-five twelve-hour rentals. Lessor has rented vehicles for a total of 337.5 hours during the taxable period. The average paid use period is calculated by dividing 337.5 total rental hours by seventy-five total rentals. The average paid use period for the taxable period is 4.5. Lessor satisfies the average paid use period requirement to qualify as a car-sharing organization. Example: For a taxable period, Lessor enters into two hundred separate rentals consisting of seventy-five thirty-minute rentals, fifty one-hour rentals, forty two-hour rentals, twenty-five twelve- hour rentals, and ten two-day (forty-eight hours each) rentals. Lessor has rented vehicles for a total of 947.5 hours during the taxable period. The average paid use period is calculated by dividing 947.5 total rental hours by two hundred total rentals. The average paid use period is 4.73. Lessor satisfies the average paid use period requirement to qualify as a carsharing organization. [Eff 4/8/16] (Auth: HRS §§231-3(9), 251-15(b)) (Imp: HRS §§251-1, 251- 2.5)