RACs May Sue over Proposed Tax

Saying a proposed 2.5-percent tax on rental cars could be detrimental to their business, rental companies doing business at San Francisco International Airport and other unincorporated areas may sue San Mateo County, according to the San Mateo Daily Journal.

The country Board of Supervisors agreed to place the tax on the Nov. 3 ballot. Representatives of Hertz and Enterprise Rent-A-Car asked officials to either reverse the tax or at least postpone a decision. Supervisors Mark Church and Rich Gordon suggested the two taxes as a way to bring much needed money into the county’s general fund.

The supervisors first considered a 5 percent tax for rental cars but before the first reading dropped it to 2.5 percent as a compromise.

Dan Harvey, a Hertz representative, said the tax was unfair because it would single out the auto rental industry, especially when the travel industry is facing strong challenges at the moment. Karen Petrulakis, an attorney for Enterprise, said her firm is currently investigating potential legal challenges on that basis and the manner in which the proposal was passed.

Representatives of Teamsters 865 is worried members would face layoffs if the tax hurts car rental business at SFO.

The proposed taxes would generate millions of dollars for the county’s general fund.

The proposals do not have a sunset date, leading business representatives to question why the county would need to continue collecting the tax after the budget is balanced, according to the Daily Journal.

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