CHICAGO --- Zipcar, a for-profit car-sharing firm, has seen its competitive plans to move into the Chicago market hit a snag due to a combined 12% tax the company would owe on its revenues to the city and the state of Illinois, according to the Chicago Journal. The company wants a share of the market so that it can challenge the I-GO nonprofit car-sharing program.
Boston-based Zipcar had worked a deal with the city of Chicago declaring the company tax-exempt, but was not able to do the same at the state level. I-GO currently pays the taxes and passes the 12 percent additional cost onto its customers.
Illinois House majority leader Barbara Flynn Currie (D-Chicago) has proposed legislation that would exempt car-sharing companies from paying the state tax, but it has stalled in committee, according the report.
Enterprise Rent-A-Car has raised objections to the bill because they feel that all car rental services should be included in the exemption. The state legislature hopes to solve the tax issue during the next few weeks.
Zipcar currently offers customers 20 different car models compared with I-GO’s three – the Toyota Prius, Honda Civic Hybrid and Honda Element. Both companies offer low monthly fees and customer car reservations on short notice 24 hours a day.