Car rentals shake taxes twice more

Increased taxes and fees on the rental of cars is spreading, according to industry analysts, although the good news is that two laws proposing such fees failed to pass in two states this week.

In Colorado, a proposed piece of legislation would have increased the per day tax on car rentals to $6 had it passed. In Florida the defeated bill would have increased the daily fee for rental from airports by $2.

In Florida, a similar bill was proposed two years ago, while Jeb Bush was governor. It was defeated then and it remains defeated now.

Kevin Maguire, is the president and CEO of the National Business Travel Association, a group which has strenuously fought the car taxes. “With all these states, nothing is totally defeated,” he said. “We’re finding that it’s dead for a period of time and then it’s brought back to life.”

Neil Abrams, president of Purchase, a car rental consultancy based in New York, said that state and municipal governments in the United States have approved over 110 laws related to the taxation of car rentals in recent years.

“It’s taken on almost epidemic proportions,” he said. “It’s driving up the price of a rental transaction and that’s never good.”

The fact that revenue from the proposed taxes would have gone to good use does not take away from the fact that 20 to 35 per cent of today’s car hire fees in America are taxes.

Maguire said that in Colorado, the tax revenue would have been used to improve the road system while in Florida, it would have contributed to a commuter rail system.

“You’re taxing rental customers that can’t use the facilities that their taxes are funding,” Abrams said.