Legislative Tax Move Is a Tax Hike, Say Auto Rental Companies

A plan by Nevada legislative leaders and the governor to take $1.8 million in taxes now going to rental car companies is a tax increase on the companies, a lobbyist for rental car companies was quoted as saying Dec. 8 in a Las Vegas Review-Journal article.

Rental car companies are allowed to charge a special tax that they can retain to pay for state licensing costs of their cars. Robert Ostrovsky, who represents the companies, said licensing a car in Oregon costs just $50 a year, but it costs more than $300 in Nevada.

Nevada legislative leaders and Gov. Jim Gibbons proposed at a Dec. 8 special session to use one-fourth of these taxes to help solve a $341.7 million shortfall.

But Gibbons and Senate Majority Leader Steve Horsford, D-Las Vegas, both have said no tax increases are under consideration at the special session. The car rental tax rate would not be increased by the budget balancing plan.

The rental car money actually is not needed to cover the budget shortfall. Information released by legislative staff shows the shortfall during the remainder of the fiscal year will be $337 million, while $341.7 million in state agency cuts, loans and other revenue changes are under consideration.

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