CITY OF COLORADO SPRINGS TAX GUIDE

AUTOMOBILE RENTAL TAX - SHORT-TERM RENTAL

(Article 9 Lodgers, Campgrounds and Automobile Rental Tax)
TAX RATE
ANY AUTOMOBILE RENTAL OF LESS THAN 30 CONSECUTIVE DAYS IS TAXED AT
1% ABOVE THE GENERAL SALES TAX RATE OF 2.5%.
The 1% Automobile Rental Tax collected on automotive vehicle rentals must be separately
reported on Line 5C of the sales tax return.
TYPES OF VEHICLES SUBJECT TO THE SPECIAL RATE
The special tax rate of 1% applies to short-term (less than 30 consecutive days) rentals of
automotive vehicles commonly recognized as passenger cars.
The special tax rate does not apply to vehicles commonly used in the construction, maintenance,
and repair of roadways, such as:
Cranes Office Trailers
Concrete Pumpers Off-Highway Trucks
Air Compressors Special Mobile Equipment (SME)
Mobile Welders
The special tax rate does not apply to recreational vehicles (travel trailers, collapsible camping
trailers, truck campers, pickup campers, and other vehicles used for overnight accommodations),
unless they are licensed as passenger vehicles. The general sales tax rate (2.5%) applies to the
rental of this type of equipment and recreational vehicles.
THE SPECIAL 1% TAX DOES NOT INCLUDE ANY RENTAL OF A VEHICLE TO A
PERSON WHO ENTERS INTO A WRITTEN AGREEMENT FOR A PERIOD OF AT LEAST
30 CONSECUTIVE DAYS NOR DOES THE TAX APPLY TO ANY VEHICLES LICENSED
AS TRUCKS, TRAILERS OR MOTORCYCLES.
TAXABLE VERSUS NON-TAXABLE CHARGES
The following is a list of common charges appearing on an automotive vehicle rental invoice.
Included is a summary describing the taxability of the charge and the appropriate tax rate:
A. Time & Mileage: Taxable at 3.5% City rate (2.5% Sales, 1.0% Auto Rental)
B. Additional Driver: Taxable at 3.5% City rate (2.5% Sales, 1.0% Auto Rental)
C. Collision Damage Waiver (CDW) or Loss Damage Waiver (LDW): Taxable at
3.5% City rate (2.5% Sales, 1% Auto Rental). This is not a charge for insurance.
It is a fee imposed by the rental company, at the renter's option, that eliminates or
reduces the monetary liability the renter would otherwise be subject to when
damage occurs to the vehicle.
D. Personal Accident Insurance (PAI), Personal Effects Coverage (PEC), and other
optional insurance charges: Insurance will be taxable if provided by the rental
company as part of the rental agreement, but not taxable if provided by a third
party.
E. Refueling Charge: Not taxable if the rental contract imposes a refueling charge
when the vehicle is returned with less than a full tank of gas.
F. Optional Rental Items (e.g., cellular phone, baby seat, ski rack): Taxable at 3.5%
City rate if not separately stated on the invoice. Otherwise, Taxable at 2.5% rate
(the general sales tax rate) if separately stated.
G. Airport Fee: Taxable at 3.5% City rate (2.5% Sales, 1.0% Auto Rental). This fee
is imposed on the receipts of vehicle rental companies at the Colorado Springs
Airport, and may be passed on to the customer as an additional rental charge.
In addition to the above charges, the State of Colorado allows automotive vehicle rental
companies, at their option, to pass the ownership tax to the renter, by adding a 2% ownership tax
to the rental billing. This charge is not subject to the City sales or use tax.
THE TAX CHARGED MAY ALSO INCLUDE THE STATE OF COLORADO SALES TAX
OF 2.9%, THE EL PASO COUNTY SALES TAX OF 1% AND THE PIKES PEAK RURAL
TRANSPORTATION AUTHORITY SALES TAX OF 1%.
EXAMPLE
Eddie rents an automobile from Airport Rent A Car at the following daily rates:
A. Base daily rental $69.95
B. Additional driver 5.00
C. CDW 11.95
D. Refueling Charge 22.00
E. Car Phone 15.00
F. Airport Fee 10.00
In this example, charges for A, B, C, and F are taxable at 3.5% City rate (2.5% Sales, 1% Auto
Rental); the charge for E is taxable at 2.5% (Sales); the charge for D is not taxable.
Note: Short Term Automobile Rental Tax is currently 10.4%, as follows:
State of Colorado Sales Tax 2.9%
Colorado Springs Sales Tax 2.5%
Colorado Springs Auto Rental Tax 1.0%
El Paso County Sales Tax 1.0%
El Paso County Ownership Tax 2.0%
Pikes Peak Rural Transportation Authority Sales Tax 1.0%
PURCHASES BY RENTAL CAR COMPANY
Automobile parts and fluids (example: tires, motor oil, washer fluid, etc.) that are used to
maintain and operate the rental fleet may be purchased by the rental car company tax-free.
Optional items that are rented to the customer (e.g. baby seat, ski racks) may also be purchased
tax-free. Purchases of parts and fluids for business vehicles that are not part of the rental fleet are
taxable. Purchases of parts reimbursed by a consumer or insurance company are taxable.
CS Code Section 2-7-104: WORDS AND PHRASES DEFINED: AUTOMOTIVE VEHICLE
CS Code Section 2-7-104: WORDS AND PHRASES DEFINED: PURCHASE OR SALE
CS Code Section 2-7-309: PERSONAL PROPERTY RENTALS
CS Code Section 2-7-312: TANGIBLE PERSONAL PROPERTY
CS Code Section 2-7-102: PURPOSE
CS Code Section 2-9-103: DEFINITIONS
CS Code Section 2-9-104: LEGISLATIVE INTENT
CS Code Section 2-9-108: APPLICABILITY OF CITY SALES AND USE TAX ORDINANCE
CS Code Section 2-9-109: EXEMPTIONS
THE ABOVE INFORMATION IS A SUMMARY IN LAYMAN’S TERMS OF THE RELEVANT
CITY OF COLORADO SPRINGS TAX CODE FOR THIS INDUSTRY OR BUSINESS SEGMENT. IT
IS NOT INTENDED FOR LEGAL PURPOSES TO BE SUBSTITUTED FOR THE FULL TEXT OF
THE CITY OF COLORADO SPRINGS SALES AND USE TAX ORDINANCE.

Revised 01/01/05