As of 2021, peer-to-peer (P2P) platforms for car sharing are subject to the transaction privilege tax (TPT) in Arizona. The state defines a P2P platform as a business that enables individuals to rent a vehicle. 

P2P platforms, not individuals renting their cars through the platform, are responsible for paying TPT. This is the case as long as an individual's business is not renting cars. 

In other words, if renting a car is a side gig, it's unlikely to require a TPT license. If renting a car is an individual's primary source of income, it may require a TPT license. 

Individuals who rent their vehicles through a P2P platform must certify their vehicle with the Arizona Department of Revenue and show that: 

or 

What Isn't a P2P Platform 

Arizona explicitly states the following don't follow under the P2P car-sharing platform rules: 

The state draws a line between traditional car rental companies and P2 platforms. Car rental companies usually own the vehicles available for rent. In comparison, P2P platforms don't own the cars but are instead a marketplace that allows other people to offer their cars for rent they rent.  

P2P Platforms versus Traditional Car Rentals 

P2P platforms generally involve renting vehicles owned by individuals. Individuals or others who use a P2P platform are usually not in the primary business of renting vehicles. 

In comparison, a rental car company's primary business is renting cars, and cars are purchased primarily to rent. Rental car companies can, however, list cars on a P2P platform. 

When a rental car company lists its cars on a P2P platform, they must report all received gross income on their TPT return. As the P2P platform collects and remits taxes and surcharges, traditional car rental companies may deduct the P2P platform income.  

If you need help, call Senior Partner, Tax Controversy Attorney, and former IRS attorney Brandon A. Keim at (602) 200-7399 or contact him online to discuss your options.