Is there an exemption for the purchase of motor vehicles for lease or rental? If so, how do I obtain the exemption? What if my business is located out of state?

Yes, if certain criteria are met, an "L" number exemption may be issued upon approval from the Department. In order to qualify the following conditions must be met:

1. The taxpayer must be registered to collect state sales tax;
2. Each separate location must have its own account number;
3. Each separate location must have its own license from the Motor Vehicle Commission or the Used Motor Vehicle and Parts Commission; and
4. The taxpayer must have a license issued by the Motor Vehicle Commission before the application for an "L" number can be approved.

The "L" number exemption is only valid for the sales tax account number to which it is issued. The exemption certificate for purchases for one business location may not be used by another location of the same business. Each location must apply for and receive its own exemption. All locations located in the state must apply for and receive an exemption, even if the business headquarters are located out of the state. The application is Form R-1370, Purchase of Lease or Rental Vehicles Tax Exemption Application, and may be found on the Department’s website.