Car Rental Excise Tax Amendment Included in FAA Reauthorization

On Oct. 5, President Donald Trump signed into law the five-year reauthorization of the Federal Aviation Administration (FAA), which authorizes the FAA programs and federal grants for airport infrastructure for the next five years. Additional provisions in the reauthorization include a bi-partisan amendment specific to excise taxes on airport car rental transactions.

The amendment, sponsored by Reps. Davis (R-Ill.) and Cohen (D-Tenn.), ensures that taxes and fees imposed at federally-funded airports may only be levied if they are wholly used for airport purposes.

Supported by the American Car Rental Association (ACRA) as well as 37 bipartisan groups, the amendment does not supersede the right of state and local governments to continue to impose non-discriminatory taxes such as income, sales, property, and other broad-based taxes and fees. It “grandfathers” existing discriminatory taxes and fees, such as rental car taxes currently on the books, until the tax is repealed or sunsets. The amendment also preserves current and future airport-related fees that are imposed solely at all airport businesses.

“Local governments have for years looked to siphon off revenue from airport businesses and use it for non-airport purposes, and they continue to do so,” said Greg Scott, ACRA’s lobbyist. “This is an important milestone in the fight to eradicate unfair excise taxes that add more to the cost of travel for car rental customers, though the fight is not over.”