Audience: Businesses

LEASE AGREEMENTS

Each applicant may be requested to submit a copy of a lease for review to ensure legal sufficiency. It is the responsibility of the applicant to have an adequate lease containing the provisions as required. Every lease executed pursuant to a Maryland IFTA license shall be subject to Maryland law.

RENTAL/LEASING

Short-Term Leases - In the case of a short-term motor vehicle rental, by a lessor regularly engaged in the business of leasing, or renting motor vehicles without drivers, for compensation to licensees or other lessees of 29 days or less, the lessor will report and pay the fuel use tax unless the following two conditions are met:

• The lessor has a written rental contract which designates the lessee as the party responsible for reporting and paying the fuel use tax; and
• The lessor has a copy of the lessee’s IFTA fuel tax license which is valid for the term of the rental.

Long-Term Leases - A lessor regularly engaged in the business of leasing or renting motor vehicles without drivers for compensation to licensees or other lessees may be deemed to be the licensee, and upon meeting the proper requirements may be issued a license if an application has been properly filed and approved by the base jurisdiction.

HOUSEHOLD GOODS CARRIERS

In the case of a household goods carrier using independent contractors, agents, or service representatives, under intermittent leases, the party liable for motor fuel use tax shall be:

• The lessee (carrier) when the qualified motor vehicle is being operated under the lessee's jurisdictional operating authority. The base jurisdiction for purposes of this Agreement shall be the base jurisdiction of the lessee (carrier), regardless of the jurisdiction in which the qualified motor vehicle is registered for vehicle registration purposes by the lessor or lessee.
• The lessor (independent contractor, agent, or service representative) when the qualified motor vehicle is being operated under the lessor's jurisdictional operating authority. The base jurisdiction for purposes of this Agreement shall be the base jurisdiction of the lessor, regardless of the jurisdiction in which the qualified motor vehicle is registered for vehicle registration purposes.

INDEPENDENT CONTRACTORS

For intermittent or variable lease contracts, in the case of a household goods lessee-carrier using independent contractors, agents, or service representatives as lessors, when the qualified motor vehicle is being operated under the lessee's base jurisdiction, the lessee-carrier shall be responsible for reporting and paying motor fuel tax, and when the qualified motor vehicle is being operated under the lessor's base jurisdiction, the lessor shall be responsible for reporting and paying motor fuel tax.

Short-Term Leases - In the case of a carrier using independent contractors under short-term/trip leases of 29 days or less, the trip lessor will report and pay all fuel taxes.

Long-Term Leases - In the case of a carrier using independent contractors under long-term leases (30 days or more), the lessor and lessee will be given the option of designating which party will report and pay fuel use tax. In the absence of a written agreement or contract, or if the document is silent regarding responsibility for reporting and paying fuel use tax, the lessee will be responsible for reporting and paying fuel use tax. If the lessee (carrier) through a written agreement or contract assumes responsibility for reporting and paying fuel use taxes, the base jurisdiction for purposes of this Agreement shall be the base jurisdiction of the lessee, regardless of the jurisdiction in which the qualified motor vehicle is registered for vehicle registration purposes by the lessor.