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New Tax on Peer-to-Peer Vehicle Rentals: What You Need to Know

Last month, the North Carolina Department of Revenue (“NCDOR”) provided guidance on a new tax applicable to peer-to-peer vehicle sharing providers under N.C.G.S. § 105-187.5. Effective October 1, 2026, peer-to-peer vehicle sharing providers must collect tax on their gross receipts from short-term and long-term vehicle rentals, leases, and vehicle subscriptions.

Under the newly amended N.C.G.S. 20-280.15, peer-to-peer vehicle sharing is defined as “the authorized use of a shared vehicle for financial consideration by an individual other than the shared vehicle owner through a peer-to-peer vehicle sharing program.”[1] A peer-to-peer vehicle sharing program is a “commercial business platform that connects shared vehicle owners with drivers to enable peer-to-peer vehicle sharing.”[2] Common examples of peer-to-peer vehicle sharing programs include Turo or Zipcar.

The new applicable tax rates are 8% for short-term leases or rentals, 5% for vehicle subscriptions, and 3% for long-term leases or rentals. The tax applies to rentals and leases billed on or after October 1, 2026.

Peer-to-peer vehicle sharing providers must register with NCDOR before October 1, 2026, and report the tax on Form E-500F, Motor Vehicle Lease and Subscription Tax Return, according to their assigned filing frequency.

For more information about the tax on peer-to-peer vehicle rentals, please see the Sales and Use Tax Directive 26-2 on the NCDOR website.

Young Moore and Henderson lawyers are available to answer questions about how this tax functions, and they can provide additional North Carolina state and local tax advice. For assistance, please contact Reed Hollander or Marlo Donato Kalb.

[1] N.C.G.S. § 20-280.15(2) (2026).

[2] N.C.G.S. § 20-280.15(3) (2026).