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| Montana Administrative Register Notice 42-2-849 | No. 18 09/23/2010 | |
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BEFORE THE DEPARTMENT OF REVENUE OF THE STATE OF
TO: All Concerned Persons 1. On October 26, 2010, at 3:00 p.m., a public hearing will be held in the Third Floor Reception Area Conference Room of the Individuals planning to attend the hearing shall enter the building through the east doors of the 2. The Department of Revenue will make reasonable accommodations for persons with disabilities who wish to participate in this public hearing or need an alternative accessible format of this notice. If you require an accommodation, contact the Department of Revenue no later than 5:00 p.m., October 12, 2010, to advise us of the nature of the accommodation that you need. Please contact Cleo Anderson, Department of Revenue, Director's Office, 3. The proposed new rules do not replace or modify any section currently found in the Administrative Rules of Montana. The proposed new rules provide as follows: NEW RULE I DEFINITIONS The following definitions apply to this subchapter: (1) "Sales price" as defined in 15-68-102, MCA, includes base rental charges received in money or otherwise, including all receipts, cash, credit, and property or services of any kind or nature. (2) "Seller" means a seller as defined in 15-68-101, MCA. (3) "User" means a person who contracts with a rental vehicle company to rent a vehicle for the intended purpose for which it is designed. AUTH: 15-68-801, MCA IMP: 15-68-101, MCA REASONABLE NECESSITY: The department is proposing to adopt New Rule I to define terms used within the rules contained in this subchapter. The department is proposing to place New Rule I in new subchapter 10 that will be titled Registration and Permits. NEW RULE II REGISTRATION AND PERMIT (1) Every seller required to collect the rental vehicle sales and use tax must register and file Form GenReg, provided by the department or available on the department's web site at http://www.mt.gov/revenue and apply for a state account identification number for each location operating in (2) A seller who has multiple locations in (3) A seller who has acquired an existing facility from a previous owner shall not use the predecessor's state account identification number. The seller must register and file Form GenReg to obtain a new state account identification number upon acquiring the existing business. (4) A seller who establishes a new facility separate from an existing facility shall not use the existing account identification number. The seller must register each facility separately and file Form GenReg to obtain a new state account identification number before operating the new facility. (5) When completing Form GenReg, each seller must provide the federal employer identification number assigned to them by the Internal Revenue Service. For a sole proprietorship, this number may be a social security number if the sole proprietor is not required to apply for a federal employer identification number. Any entity change requiring a new federal employer identification or social security number requires a new facility registration. (6) No registration is considered complete unless the federal employer identification or social security number appears on the application. (7) A seller who fails to register with the department for reporting and remitting the rental vehicle sales and use tax is not relieved from the collection and reporting requirements. AUTH: 15-68-801, MCA IMP: 15-68-401, 15-68-402, MCA REASONABLE NECESSITY: The department is proposing to adopt New Rule II to provide the seller instructions on how to register their business, receive a seller's permit when registering one single business or multiple businesses. The department is proposing to place New Rule II in new subchapter 10 that will be titled Registration and Permits.
NEW RULE III SEASONAL REGISTRATION AND PERMIT (1) A person who is engaged in the business of renting motor vehicles to the general public and is not opened for business all 12 months of a calendar year may apply for a seasonal seller's permit. (2) A person may apply for a seasonal seller's permit by completing Form GenReg indicating that the business is seasonal and listing the calendar months the business operates. (3) If the seller operates at any time within the four, three-month quarters of January through March; April through June; July through September; and October through December, they cannot apply for a seasonal seller's permit. (a) For example: A seller is operating and opened for business April 15 through October 11 of each year. This seller can apply for a seasonal seller's permit as they operate and are opened for business within only three, three-month quarters (April through June; July through September, and the partial month of October.) (b) A seller is operating and opened for business March 15 through October 11 of each year. This seller cannot apply for a seasonal seller's permit as they operate and are opened for business within each of the four, three-month quarters (March 15 through March 31, April through June; July through September; and October through October 11.) AUTH: 15-68-401, 15-68-801, MCA IMP: 15-68-401, MCA REASONABLE NECESSITY: The department is proposing to adopt New Rule III to further clarify the requirements and procedures when applying for a seasonal seller's permit. The department is proposing to place New Rule III in new subchapter 10 that will be titled Registration and Permits. NEW RULE IV WHO MUST COLLECT THE TAX FROM THE USER AND FILE RETURNS (1) Every seller shall be liable for the amount required to be collected as a tax from the user except for a user which is exempt from the tax as stated in [NEW RULE XI]. (2) A seller, commonly known as a car rental business that rents light vehicles to travelers for use in (3) A seller, commonly known as a rental service store that rents moving vans, flat bed trailers, or semi-trailers for local or long distance hauling that is used in (4) A seller, commonly known as a marina or sporting goods store who rents motorboats for use in AUTH: 15-68-801, MCA IMP: 15-68-101, 15-68-102, 15-68-501, MCA REASONABLE NECESSITY: The department is proposing to adopt New Rule IV to provide guidance to the rental vehicle industry and the user as to what commonly known rental services are subject to the four percent rental vehicle sales tax. The department is proposing to place New Rule IV in new subchapter 11 that will be titled Collection, Reporting, and Payment Requirements for the seller. NEW RULE V QUARTERLY RETURNS AND PAYMENTS (1) Every seller, except for a seller identified in (3), is required to complete and file Form RVT or RT-C with the Department of Revenue, P.O. Box 5835, Helena, MT 59604-5835, for each calendar quarter or portion of a quarter in operations. (2) The seller shall remit the amount of the tax with Form LFT or LFT-C. The report will cover quarterly periods ending March 31, June 30, September 30, and December 31, and is due on or before the last day of the month following the close of the quarter. (3) A seller who has obtained a seasonal permit is required to only complete and file form RVT or RVT-C for the quarters they are opened for business. (4) If a seller has no revenue to report for a quarter, and the seller does not have a seasonal permit, the seller must file a quarter return reporting zero revenue and tax for the quarter. (5) A seller who is required to file Form RVT or RVT-C may file and pay electronically their quarterly return through the department's web site at https:/tap.dor.mt.gov. When filing electronically the return and payment is considered filed on the confirmation date provided upon submitting the return. AUTH: 15-68-502, 15-68-801, MCA IMP: 15-1-208, 15-68-502, 15-68-513, MCA
REASONABLE NECESSITY: The department is proposing to adopt New Rule V to provide the seller with instructions on when, where, and how to file their quarter rental vehicle tax return. In addition, the department encourages taxpayers to file electronically through our Taxpayer Access Point (TAP). Therefore, we want to identify where they can access our web site to register and file electronically. The department is proposing to place New Rule V in new subchapter 11 that will be titled Collection, Reporting, and Payment Requirements for the seller. NEW RULE VI COMBINED TAX RETURN (1) A seller doing business in multiple locations may elect to file a combined tax return (Form RVT-C) separately stating each location's gross sales, exemptions, and tax. (2) Prior to filing a combined return, the seller must request in writing this election to the department. This request must include the complete name, address, and permit number of each location that will be included in the combined return. (3) Upon authorization by the department, the seller can proceed with filing a combined return. (4) Once the seller elects to file a combined return and has received authorization from the department, the seller cannot elect to file separate returns for each business location in the future without receiving prior approval from the department. (5) If a location has no revenue to report for a quarter, the seller must include the location in the combined return reporting zero revenue and tax for the quarter. (6) The seller must identify quarterly a new location that is included in the return. (7) The seller must identify quarterly which location is no longer included in the combined return. AUTH: 15-68-801, MCA IMP: 15-68-502, MCA REASONABLE NECESSITY: The department is proposing to adopt New Rule VI to streamline the reporting and filing of quarterly returns by the seller. This rule allows the seller to combine the revenues and tax for each separate location that is owned, managed or booked by the seller into one return. This streamlining approach complements the department's taxpayer access point electronic filing program and will reduce the amount of time necessary for the seller to complete a quarterly return and for the department to process the quarterly return. The department is proposing to place New Rule VI in new subchapter 11 that will be titled Collection, Reporting, and Payment Requirements for the seller. NEW RULE VII FAILURE TO FURNISH REQUESTED INFORMATION (1) The department, for the purpose of determining the correctness of any return, may request additional information to verify amounts or items on the return. (2) If a return is not filed or information is not supplied, the department will estimate the tax from available information. AUTH: 15-68-801, MCA IMP: 5-68-502, MCA REASONABLE NECESSITY: The department is proposing to adopt New Rule VII to provide notice to the seller that if records are not maintained, the department has the right to estimate the tax based on available information. The department is proposing to place New Rule VII in new subchapter 11 that will be titled Collection, Reporting, and Payment Requirements for the seller.
NEW RULE VIII RECORDS REQUIRED - AUD (2) Such records shall include specific documentation of exempt charges. (3) The seller must notify the user of the four percent rental vehicle sales and use tax. (4) The tax shall be separately stated on the receipt, invoice, or other document provided to the user to ensure there is a record of the amount of tax charged. (5) The records shall be maintained by the seller for a period of five years and shall be subject to audit by the department for that period. AUTH: 15-68-801, MCA IMP: 15-68-502, 15-68-513, MCA REASONABLE NECESSITY: The department is proposing to adopt New Rule VIII to provide information to the sellers as to what records are to be maintained by them to substantiate their return. The department is proposing to place New Rule VIII in new subchapter 11 that will be titled Collection, Reporting, and Payment Requirements for the seller. NEW RULE IX PENALTIES AND INTEREST (1) Upon request, the late pay or late file penalties may be waived pursuant to ARM 42.3.101 through 42.3.111, 42.3.113, 42.3.115, and 42.3.120. AUTH: 15-68-801, MCA IMP: 15-68-514, MCA REASONABLE NECESSITY: The department is proposing to adopt New Rule IX to provide information to the seller on establishing reasonable cause for waiver of penalty and interest and to inform the seller that upon request the department may waive the late file penalty when requested if payment of tax and interest is paid within 30 days of their first notice of a deficiency. The department is proposing to place New Rule IX in new subchapter 11 that will be titled Collection, Reporting, and Payment Requirements for the seller. NEW RULE X RENTAL VEHICLES SALES SUBJECT TO THE TAX (1) A user is required to pay the rental vehicle sales and use tax on the sales price for a rental vehicle used in (a) automobiles, including vans, sport utility vehicles, or trucks have a capacity of one ton or less; (b) motorcyles; (c) motor-driven cycles, which include motorcycles or scooters with a motor that produces five horsepower or less; (d) quadricycles, including a four-wheeled motor vehicle designed for on-road or off-road use, that has a motor that produces 50 horsepower or less; (e) motorboats, including a canoe, kayak, personal watercraft, rubber raft or pontoon, propelled by any motor or engine of any description; (f) sailboats, including any vessel that uses a sail and wind as it primary source of propulsion; (g) off-highway vehicles, including motorcycles, quadricycles, dune buggies, amphibious vehicles, deriving power from any source other than muscle or wind; (h) a truck, trailer, or semi-trailer that has a gross vehicle weight of less than 22,000 pounds, used to transport personal property, such as a flat bed trailer used to transport machinery. AUTH: 15-68-801, MCA IMP: 15-68-101, 15-68-102, 15-68-501, MCA REASONABLE NECESSITY: The department is proposing to adopt New Rule X to provide guidance to the rental vehicle industry and the user as to what commonly known rental services are subject to the four percent rental vehicle sales tax. The department is proposing to place New Rule X in new subchapter 12 that will be titled Taxable and Nontaxable Transactions for the User. NEW RULE XI EXEMPT RENTAL VEHICLE CHARGES (1) A user is not required to pay the rental vehicle sales and use tax on the rental of farm vehicles, machinery, equipment, travel trailers, motor homes, airplanes, snowmobiles, golf carts, and sail boards. (2) A user is not required to pay the rental vehicle sales and use tax when the vehicle is rented to the same user for a period of 30 consecutive days or more. Nonconsecutive rental agreements cannot be combined for the purpose of determining the length of the rental period. Intention to rent for a period of 30 or more continuous days is documented by a lease, contract, or historical evidence of continuous rental. (3) The federal government is not required to pay the rental vehicle sale and use tax if the rental charge is billed directly to the federal government and paid directly by the federal government. A charge that is individually billed and paid by the user who later is reimbursed by the federal government is not exempt from the rental vehicle sales and use tax. (4) An enrolled member of a federally recognized Indian tribe, who rents a vehicle within the exterior boundaries of the enrolled member's Indian reservation, does not have to pay rental vehicle tax. The seller must record the individual's enrollment number on the record. (5) A foreign diplomat, entitled under international law or a bilateral treaty, does not have to pay the rental vehicle tax upon showing of a tax-exempt card issued by the U.S. State Department as follows: (a) a blue stripe at the bottom indicates the bearer is entitled to full tax exemption; or (b) a yellow stripe indicates there is some type of restriction on the full tax exemption, which will be indicated in the yellow stripe area. (6) The isolated rental of vehicles by a person who is not regularly engaged in the business of renting vehicles is not required to collect the rental vehicle sales and use tax from the user. AUTH: 15-68-801, MCA IMP: 15-68-101, 15-68-102, MCA REASONABLE NECESSITY: The department is proposing to adopt New Rule XI to provide the seller and the user clearer guidance as to what users are exempt from paying the rental vehicle sales and use tax to the seller. The department is proposing to place New Rule XI in new subchapter 12 that will be titled Taxable and Nontaxable Transactions for the User. 4. Concerned persons may submit their data, views, or arguments, either orally or in writing, at the hearing. Written data, views, or arguments may also be submitted to: Cleo Anderson, Department of Revenue, Director's Office, P.O. Box 7701, Helena, Montana 59604-7701; telephone (406) 444-5828; fax (406) 444-4375; or e-mail canderson@mt.gov and must be received no later the November 5, 2010. 5. Cleo Anderson, Department of Revenue, Director's Office, has been designated to preside over and conduct the hearing. 6. An electronic copy of this Notice of Public Hearing is available through the department's site on the World Wide Web at www.mt.gov/revenue, under "for your reference"; "DOR administrative rules"; and "upcoming events and proposed rule changes." The department strives to make the electronic copy of this Notice of Public Hearing conform to the official version of the notice, as printed in the Montana Administrative Register, but advises all concerned persons that in the event of a discrepancy between the official printed text of the notice and the electronic version of the notice, only the official printed text will be considered. In addition, although the department strives to keep its web site accessible at all times, concerned persons should be aware that the web site may be unavailable during some periods, due to system maintenance or technical problems. 7. The Department of Revenue maintains a list of interested persons who wish to receive notices of rulemaking actions proposed by this agency. Persons who wish to have their name added to the list shall make a written request, which includes the name and e-mail or mailing address of the person to receive notices and specifies that the person wishes to receive notices regarding particular subject matter or matters. Notices will be sent by e-mail unless a mailing preference is noted in the request. Such written request may be mailed or delivered to the person in 4 above or faxed to the office at (406) 444-4375, or may be made by completing a request form at any rules hearing held by the Department of Revenue. 8. The bill sponsor contact requirements of 2-4-302, MCA, apply and have been fulfilled. The primary bill sponsor to the legislation, chapter 544, L. 2003, was contacted on September 10, 2010 by regular /s/ Cleo Anderson /s/ Dan R. Bucks CLEO ANDERSON DAN R. BUCKS Rule Reviewer Director of Revenue Certified to Secretary of State September 13, 2010
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