ACRA President Responds to Car Rental Fees Article

This letter is in response to the article published on Nov. 12, 2008 by Jahna Beery, entitled, “Airport car-rental fees may rise again” in The Arizona Republic.

The aspect of charging customers to make up for the shortfall that was described by airport officials as “financial forces that are out of the City’s control” is simply not accurate or a fair representation of the facts. Sky Harbor airport has one of the highest tax structures in the country. The taxes that are charged to the renting consumer is a function of legislation the local government imposes. What the city is suggesting is that non-resident consumers should bear the financial burden of a budgetary shortfall. These consumers already fund projects of the municipality that they do not necessarily utilize. The fact is the local government once again is looking for creative ways to raise revenue without asking its’ voters to pay more in taxes. The original article published a chart showing the total fees and costs, including the specific fees charged to pay for the construction of the University of Phoenix stadium.

The National Business Travel Association (NBTA) travel tax study detailed data on the 50 U.S. cities with the highest numbers of air passengers. This 2008 study and the related data reflecting the airport single day tax rate and tax amounts on the top 50 destinations ranked Phoenix as 48th out of 50 with an effective rate of 24.42 percent. I would hardly suggest, as the Deputy Aviation Director has suggested, that this is “competitive.”

The underlying problem is NOT what the fees are relative to the Consolidated Rental Car Facility, but the constant compounding by state and local officials of taxation that has nothing to do with car rental or our customers. At Sky Harbor, fees and taxes not just related to the operations at the airport but to fund baseball stadiums and football stadiums are being imposed. These non-constituent imposed taxes are local government’s way of collecting taxes from the non-voting public. Sadly, the tourist pays the bills and has no voice.

What is next? Will the cost of the bonds for the football stadium increase, so those surcharges will increase as well? Will that again be described as “financial forces that are out of our city’s control?” Are you going to raise taxes on the tickets of the sporting venues that our customers are currently subsidizing? is projecting that airline passenger traffic will actually FALL 2.5 percent in the first quarter of 2009. That means fewer passengers getting off the plane, which theoretically means fewer cars being rented. Will the county again just slap another tax on future customers to make up another shortfall?

The automobile industry, via HR 2453, is asking Congress to provide rental cars (and their consumers) the same protection they have already afforded other interstate transportation modes, including trains, planes, and buses, by preventing unfair and discriminatory taxation at the state and local level. HR 2453 has zero federal fiscal impact and would simply grandfather all the car rental taxes in existence today and create a prohibition on all future discriminatory car rental taxes. The bill would not prevent a state or local government from imposing new general sales taxes on rental cars; the prohibition is on those taxes that single out car rentals.

I would encourage the entire traveling public, whether a seasoned business traveler, or a leisure traveler, to contact their federal representatives to support this act. In the case of Arizona, tourism is one of (if not the) largest industry and employers in the state. The last thing any local official needs to be doing is creating more taxes deterring tourism. You are already 48th out of 50. This is not a contest you want to win.

Respectfully submitted,

Robert M. Barton, President
American Car Rental Association

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