Can Congress protect you from car-rental taxes?

ByABC News
August 29, 2007, 10:34 AM

— -- For travelers, the toughest tariffs are those that are levied without your say, in districts far from where you live and vote. And when it comes to paying the taxman, renting a car can be the costliest part of your trip.

In 2005, I addressed this topic in the column, " What's a Rental Car's Bottom-Line Price?" and detailed why many of these charges are levied, often to fund projects that have nothing to do with travel or transportation. The bottom line about bottom-line pricing, however, is that it's mandatory and there's little you can do about it.

At least, that was the conventional wisdom. Now there's reason for optimism, thanks to a bill introduced in the House of Representatives dubbed the "End Discriminatory State Taxes for Automobile Renters Act of 2007." H.R. 2453 was introduced by Rep. Rick Boucher (D-Va.) and Rep. Chris Cannon (R-Utah) on May 23, with six co-sponsors (an even balance of three Democrats and Republicans apiece). It was referred to the Subcommittee on Commercial and Administrative Law on June 25; whether it will advance out of committee is unclear, but if you feel strongly about the issue you should contact your representative.

Support for this bill came from the aptly-named Coalition Against Discriminatory Car Rental Excise Taxes (it's unlikely we'll be hearing from the Coalition FOR Discriminatory Car Rental Excise Taxes). To be sure, the car rental industry has a vested interest here, and the eight largest firmsAlamo, Avis, Budget, Dollar, Enterprise, Hertz, National, and Thriftyare all onboard, lending money and support to the Coalition in an effort to prohibit "future discriminatory car rental excise taxes." The key words here are "future," because the bill would grandfather in existing taxes, and "discriminatory," because it would not ban "standard" state or local taxes, vehicle license fees, or "customary" airport fees.

However, the Coalition has generated support not only from industry groups such as the American Car Rental Association (ACRA), the American Society of Travel Agents (ASTA), and the National Business Travel Association (NBTA), but also from Americans for Tax Reform and the National Consumers League (NCL). A summation of the arguments in favor of the bill can be found at www.nbta.org/TravelTaxes. Linda Golodner, president and CEO of NCL, says, "These taxes, which cost consumers hundreds of millions of dollars annually, are discriminatory and regressive. They also impose a burden on consumers traveling in the nation's interstate transportation system."

They keep growing and growing...

The Coalition says car rental excise taxes have more than doubled since 1996, and there are currently 99 in existence, spread among 42 states and the District of Columbia. The sum tab for renters has reached at least $6 billion so far. It's worth noting that while the travel industry is notorious for imposing surcharges, other sectorsincluding hotels and even airlineshave not been hit as heavily as the car rental business on a percentage basis.