ALEXANDRIA, Va. --- Representatives from each of the major car rental companies - Cendant Car Rental Group Inc., Dollar Thrifty Automotive Group Inc., Enterprise, Hertz, and Vanguard Car Rental - and the National Business Travel Association met recently to discuss the negative impact of excessive car rental taxes on American businesses, consumers, and the local economies where the taxes are imposed.
"Travel has become the go-to funding source for elected officials looking to create new revenue streams for local projects. However, there is little understanding that the explosion of travel taxes has hurt local economies around the country by creating a hidden tax on local businesses," said Bill Connors, NBTA Executive Director and COO. "Many people think a car rental excise tax is a tax on visitors, but a significant portion of car rentals are local."
According to Connors, the common belief that business travel means sending employees elsewhere is not necessarily so. He says many companies spend more bringing employees and clients in to the corporate office instead. In fact, Connors notes, the NBTA performed a recent Web poll that indicated the majority of a lot of companies’ car rentals originate in the local market – a market that often forces a business to foot the bill for disproportionate excise taxes.
Auto Rental News reported in January that 54% of domestic car rental revenue was derived from the local market. That number is contrary to the popular opinion that car rental taxes hit, in large part, tourists and visitors. And if companies are increasingly importing their business trips, as Connors mentions, that might suggest that local citizens – the company – are paying the tax, not the traveler.
"Taxing travelers has become big sport in cities throughout the United States," said Gary Paxton, president and CEO of DTAG. "Politicians like it because constituents believe such taxes affect out-of-towners, but the reality is that a huge portion of cars are rented by local citizens and businesses, who end up paying more than their fair share of the cost of the projects funded by these taxes. The public should understand the true nature of these taxes and should be outraged."
Any Taylor, chairman and CEO of Enterprise, agrees. And while he supports local government, he says that RACs have an obligation to represent their customers.
"Local government represents the cornerstone of the United States, and we fully support the critical role that localities play in protecting consumer and citizen rights," said Andy Taylor, Chairman and CEO of Enterprise Rent-A-Car. "However, with 78 car rental excise taxes in 37 states, and 45 more such taxes pending or under discussion, we must speak out on behalf of our customers. These arbitrary taxes unfairly single out our customers and potentially interfere with interstate commerce by hindering free trade in the nationwide car rental industry."