Updated March 22, 2024
An equipment lease agreement is a legal contract between an owner of an item that is leased to a renter in exchange for payment. The rental amount generally depends on how long the equipment is leased and its usage.
Common Equipment Types
- Appliances
- Electronics
- Furniture (for an event)
- Gym equipment
- Heavy machinery
- Medical equipment
- Power tools
- Vehicles
Equipment Rental Tax Laws
State | Personal Property | Vehicles | Source |
Alabama | Linens/Garments 2%; all other property is levied at 4% | 1.5%* | Alabama Dept. of Revenue |
Alaska | None | Passenger vehicles are 10% and recreational vehicles are 3%. | Alaska Dept. of Revenue |
Arizona | Transaction Privilege Tax (TPT) | 6.6% plus county fees* | Arizona Dept. of Revenue |
Arkansas | 1% levied in addition to gross receipts tax* | 10%* | Arkansas Dept. of Finance and Administration |
California | 7.25% (excluding motion picture films and tapes, linen supplies, and mobile transportation equipment) | None* | California Dept. of Tax and Fee Administration |
Colorado | None for rental durations lasting 3 years or less | $2.00/per day plus local surcharges* | Colo. Rev. Stat. § 43-4-804(1)(b)(I)(A) |
Connecticut | 6.35% | 9.35% for rentals of 30 consecutive days or less, plus a $1.00/per day surcharge* | Connecticut Dept. of Revenue |
Delaware | 1.9914% (excluding household furnishings and medical equipment) | 1.9914% | Del. Code Ann. tit. 30 §4302 |
Florida | 6% on taxable personal property | 6% when rented for a period of 12 months or less plus $2.00/ per day surcharges* | FL Stat § 212.05 |
Georgia | None | None* | N/A |
Hawaii | 4% plus applicable county surcharges | $5.00/per day* | Hawaii Dept. of Taxation; |
Idaho | 6% (excluding fully operated equipment rentals) | None* | Idaho State Tax Commission |
Illinois | 6.25% | 5% | |
Indiana | 7% (excluding certain motion picture rentals) | 4%* | IN Code § 6-2.5-4-10; |
Iowa | 6% | 5% plus local surcharges* | Iowa Dept. of Revenue |
Kansas | 6.5% plus any local taxes (see chart for all exempt property) | 3.5%* | Kansas Dept. of Revenue |
Kentucky | 6% | 6% “You Drive It” tax | 103 KAR 28:051; |
Louisiana | 4.45% | 3%* | Louisiana Dept. of Revenue |
Maine | 5.5% unless exempt under ME Rev. Stat. § 1760 | 10% | Maine Revenue Services |
Maryland | 6% plus taxes levied on service charges (if any) | 11.5%* | MD Code Regs. 03.06.01.28; |
Massachusetts | 6.25% | None, but separate surcharges may apply* | Massachusetts Dept. of Revenue; |
Michigan | 6% (payable through one of two methods) | 6%* | Michigan Dept. of Treasury |
Minnesota | 6.875% plus applicable local taxes | 9.2% tax and a 5% fee | Minnesota Dept. of Revenue; |
Mississippi | 7% with certain exemptions | 6%* | Mississippi State Tax Commission; |
Missouri | 4.225% (unless taxes were paid upfront in the original purchase of the rented property) | 4%* | 12 CSR 10-108.700 |
Montana | None | 4% | MT Code § 15-68-102 |
Nebraska | 5.5% plus applicable local taxes | None | NE Reg-1-018 |
Nevada | 4.6% plus applicable municipal taxes (payable through one of two methods) | 10%* | Nevada Dept. of Taxation; |
New Hampshire | None | 9% | New Hampshire Dept. of Revenue Administration |
New Jersey | 6.625%, but may vary depending on the duration of rental | $4.00/per day* | New Jersey Division of Taxation; |
New Mexico | 5.125%-8.6875% depending on jurisdiction (see rates map) | 5% plus $2.00/per day* | New Mexico Dept. of Taxation and Revenue; |
New York | 4% plus applicable local taxes | 6%* (New York City levies an additional 5%) | New York State Dept. of Taxation and Finance |
North Carolina | 4.75% plus local rates | 8%* | North Carolina Dept. of Revenue |
North Dakota | 5% | 3%* | North Dakota Office of State Tax Commissioner; |
Ohio | 5.75% unless an exemption applies | None* | Ohio Dept. of Taxation |
Oklahoma | 4.5% plus any local taxes | 6%* | 68 O.S. § 1354; |
Oregon | None | None | N/A |
Pennsylvania | 6% (excluding unprepared food, textbooks, computer services, and more) | 2% plus $2.00/per day* | Pennsylvania Dept. of Revenue; |
Rhode Island | 7% | 8%* | Rhode Island Division of Taxation; |
South Carolina | 6% | 5%* | South Carolina Dept. of Revenue |
South Dakota | 4.5% unless an exemption applies | 4.5%* plus a 1.5% tourism tax (if applicable) | South Dakota Dept. of Revenue; |
Tennessee | 7% (unless the property is leased as a service with an operator or crew) | 3%* | Tennessee Dept. of Revenue |
Texas | 6.25% | 10% | Texas Comptroller of Public Accounts |
Utah | 4.85% plus local and county taxes | 2.5%* | Utah Dept. of Revenue; |
Vermont | 6% (agricultural equipment is exempt if used predominately for agricultural purposes) | 9% | Vermont Dept. of Taxes; |
Virginia | 5.3% plus taxes levied on service charges | 10% (comprised of 4% rental tax, 4% local tax, 2% rental fee) | 23 VAC 10-210-840; |
Washington | 6.5% (an additional B&O tax may apply at the rate of 0.484%) | 5.9%* | WAC 458-20-211; |
Washington D.C. | 6% | 10.25* | D.C. Office of the Chief Financial Officer |
West Virginia | 6% plus local taxes | $1.00-$1.50/per day* | WV Code §17A-3-4 |
Wisconsin | 5% | 5%* | WI Stat § 77.52; |
Wyoming | 6% plus municipal taxes | 4%* | WY Stat § 39-15-103 |
*Subject to additional state and local sales tax rates.