Louisiana Bill Would Allow Jefferson Parish to Create Rental Car Tax

Louisiana House Bill 934, which had its first reading in the Louisiana House on March 12, would allow the Jefferson parish to establish an automobile tax district on the lease or rental of automobiles — excluding replacement rentals — at a rate not to exceed one-half of 1% of each car rental company’s gross proceeds.

The tax wouldn’t necessarily be new to the Jefferson district, as a local state tax of the same rate is slated to expire on June 30, according to Baton Rouge’s The Advocate.

The state’s Legislature didn’t reauthorize the tax for the entire state, which rose between $5 million and $6 million annually for state services and an additional $1 million for local governments, because the state’s governor considers reauthorization of the temporary tax as a tax increase, according to statement’s from the governor’s office.

The city council of Kenner in the Jefferson parish unanimously passed a resolution on March 15 in support of HB 934. According to the Times-Picayune, the city of Kenner would continue to get about $180,000 a year through the proposed one-half of 1% tax on car rental companies.

The proposed law would require that one-third of the tax would be distributed to the city of Kenner for arts recreation, while the other two-thirds of the tax must “be distributed to the Jefferson Performing Arts Society for programs on the east and west bank, and one-third of that amount shall be distributed to the Westwego Performing Arts Center,” the bill states.

And in terms of not issuing the tax on replacement vehicles, this includes:

1. Automobiles rented by an insurance company as a replacement vehicle for a policyholder.

2. Automobiles rented by an automobile dealer as a replacement vehicle while a customer's vehicle is being repaired.

3. An automobile rental by an individual or business who rents a vehicle as a replacement vehicle while his vehicle is being repaired if the individual presents to the renter upon return of the rented vehicle a copy of the repair or service invoice.

As well, rentals lasting for more than 29 days or with drivers carrying more than nine passengers will not be subject to the tax. If HB 934 passes, the rental car tax in the Jefferson parish would become effective June 30, 2012 — immediately following the expiration of the state’s local car rental tax.

- By Joanne M. Tucker

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