Washington P2P Car-Sharing Tax Rules for 2027

Washington State’s Department of Revenue (DOR) issued a special notice on September 22, 2026, explaining the new peer-to-peer (P2P) car-sharing tax rules that take effect on January 1, 2027. More specifically, the notice clarifies who will collect the tax, how the tax should be collected and reported, and key terms and definitions.

Key P2P Car-Sharing Rules

The DOR clarified that the tax applies when a vehicle used in a P2P car-sharing transaction was originally purchased by its owner using a reseller permit or another approved sales-tax exemption certificate. The tax is separate from and applies in addition to the regular Washington retail sales tax.

The car-sharing platform is responsible for collecting the tax. It must determine whether the tax applies based on a declaration provided by the vehicle owner. The owner must complete a declaration form confirming whether the vehicle was purchased using a reseller permit or another qualifying exemption.

If the declaration indicates that such an exemption was used, the platform must collect the 9.9% tax at the beginning of the car-sharing period. Platforms must also retain the owner declarations for five years as part of their records. The collected tax must be reported on the Washington excise tax return under the Peer-to-Peer Car-Sharing tax classification.

The DOR noted that P2P car-sharing is defined as the authorized use of a vehicle by someone other than its owner through a P2P car-sharing program. The definition specifically excludes traditional retail car rentals and vehicles or rental arrangements covered by Washington’s separate rental-car laws.

A P2P car-sharing program is defined as a business platform that connects vehicle owners with drivers who want to use those vehicles in exchange for payment. The definition therefore focuses on platforms that facilitate sharing between individual vehicle owners and drivers, rather than conventional rental-car companies or rental-car businesses regulated under Washington’s existing laws.

Conclusion

The new rules establish clear compliance obligations for P2P car-sharing platforms in Washington, shifting the responsibility of tax collection and recordkeeping to these businesses while ensuring proper taxation on vehicles acquired through tax-exempt status.