Wisconsin: Car Rental Taxes “Too Inconsistent” Compared to Sales Tax

Despite a 30-percent decline in Wisconsin’s car-rental business compared to the same time a year ago, regional planners in the southeastern part of the state may place an $18 tax on car rentals to pay for the Kenosha-Racine-Milwaukee commuter rail line, according to The Daily Reporter.

Members of the Wisconsin Car Rental Alliance are worried about the tax, which is on the agenda for the Southeastern Wisconsin Regional Transit Authority’s Friday meeting, said Alliance spokesman Brian Mitchell.

A $2 fee on car rentals was in effect in three Wisconsin counties between October 2006 and September. The state Legislature, in the 2009-11 budget, gave the RTA authority to reinstitute the tax to as high as $18 per rental. The RTA on Friday will consider reviving the tax and setting the amount.

The newspaper reported that the car-rental tax is a temporary fix to keep planning on track as local governments look for permanent methods to pay for transit.

But Chris Larson, Milwaukee County Board supervisor, said that the car rental fee is not a good idea - even as a temporary solution - because the fees are too inconsistent compared with a more steady sales tax.

In addition, if the KRM gets more vehicles off the roads, the car-rental fee would take in less money to support the rail system, Larson pointed out. He added that a sales tax or even a payroll tax might be a better option.

According to the Southeastern Wisconsin Regional Planning Commission, a $12.50 tax per rental could raise $5 million. A $4.50 tax per rental could pay for engineering for the estimated $207.5 million KRM project, a full-time transit authority executive director and a full-time engineering staff.

 

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