[Congressional Record (Bound Edition), Volume 155 (2009), Part 21]
[Extensions of Remarks]
[Page 29228]
[From the U.S. Government Publishing Office, www.gpo.gov]




 INTRODUCING THE END DISCRIMINATORY STATE TAXES FOR AUTOMOBILE RENTERS 
                              ACT OF 2009

                                 ______
                                 

                           HON. RICK BOUCHER

                              of virginia

                    in the house of representatives

                      Wednesday, December 2, 2009

  Mr. BOUCHER. Madam Speaker, I rise today to introduce the End 
Discriminatory State Taxes for Automobile Renters Act. I am pleased to 
be joined by my colleague from Missouri Todd Akin as the lead 
Republican cosponsor of the legislation.
  Our legislation addresses a situation that most of our constituents 
have faced at least once and perhaps several times. An individual rents 
a car from a car rental company and is told the daily rate will be 
about $25.00. At the end of the rental, the charges from the car rental 
company are closer to $35.00 or $40.00 per day. Questions inevitably 
arise about the source of these additional charges.
  A small portion of the difference between the car rental company's 
daily rate and the amount charged is state or local sales taxes, which 
consumers pay on most goods and services they purchase. Increasingly, 
however, the bulk of these additional charges are state and local 
discriminatory excise taxes on car rental consumers--local taxes 
imposed to build sport stadiums, convention centers, etc. No matter 
what the size or scope of a local project, states or localities have 
sought to ``export'' the burden of funding these local initiatives by 
taxing ``out-of-town'' visitors renting cars in their state, city, or 
county.
  These discriminatory excise taxes on travelers have become 
increasingly popular in recent years. In 1976, there was one such tax. 
Since 1990, more than 115 special rental car taxes have been enacted in 
43 states and the District of Columbia. As a result, car rental 
customers have paid more than $7.5 billion in special taxes to fund 
projects with no direct connection to renting a car. In addition to 
stadiums, car rental customers are also footing the bill for performing 
arts centers and a culinary institute. A recent study found that the 
taxes fall disproportionately on minority households; the taxes raise 
auto insurance costs; and these taxes reduce purchases of cars by 
rental companies--an increase of 10% in tax relative to the base rental 
rate reduces rental demand, and, therefore, purchases of new cars by 
rental car companies, by approximately 12%.
  The End Discriminatory State Taxes for Automobile Renters Act would 
impose a permanent moratorium on discriminatory excise taxes on car 
rental customers by declaring these taxes an undue burden on interstate 
commerce. In the past, Congress has enacted similar protections from 
discriminatory state and local excise taxes for other interstate 
travelers such as airline, train, and bus passengers, and for the 
property of interstate transportation industries such as the airlines, 
buses, trains, and motor freight. Our measure would extend this 
protection to car rental consumers.
  The legislation's moratorium is prospective only. The bill 
``grandfathers'' existing car rental excise taxes to prevent a cut-off 
of funding for projects financed through these taxes that are already 
underway, as long as the state or local authorization for the existing 
taxes does not expire or governments do not try to increase the rate of 
the tax. And the bill would not in any way restrict the ability of 
local governments to enact non-discriminatory, general taxes such as 
sales and income taxes.
  Our legislation has been endorsed by a wide range of stakeholders, 
including the National Consumers League, UAW, and the Big Three 
automobile manufacturers.
  I hope my colleagues will join with us in enacting into law the End 
Discriminatory State Taxes for Automobile Renters Act of 2009.

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