Car Rental Tax to Help Promote Michigan Tourism

A Michigan House committee on March 9 voted to put another $20 million into the Pure Michigan tourism promotion, with about $13 million coming from a new tax on vehicles rented at or near airports, according to the Detroit Free Press.

The measures must still pass the full House, and then go to the Senate, which the previous week rejected the $2.50-per-day car rental tax.

Sen. Nancy Cassis (R-Novi) said she wants to adequately fund Pure Michigan, which features television commercials in which actor Tim Allen’s voice promotes the beauty of Michigan.

But Novi and fellow Senate Republicans oppose a car rental tax to fund the campaign. Proponents of the tax say travelers outside of the state of Michigan would pay the tax, rather than Michigan residents. She said some would argue that a tax on rental cars might be better used to pay for road and bridge repairs, and that other business tax issues are more important to economic development.

The House Committee on Tourism and Recreation voted 7-3 along party lines for the car rental tax.

A third bill would allow the Michigan Economic Development Corporation to borrow up to $20 million for the Pure Michigan campaign, to be paid back by revenue from the car rental tax and the sales and use tax earmarks.

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