ACRA Speaks Out on Fla. Car Rental Tax

This letter was written by Robert M. Barton, president of the American Car Rental Association (ACRA) regarding the car rental industry’s opposition to the Rental Car Tax Increase – SB 1212.

Honorable Florida State Senators:

We recognize that Florida, in addition to many other states, is facing budget challenges of the highest magnitude during the current economic recession. Legislators are, in many cases, being asked to do the impossible in balancing budgets this year.

Florida’s number one industry is tourism. SB 1212 is nothing more than a slaying of the “goose that laid the golden egg.” Florida needs tourism. Taxing only the rental car industry to pay for a rail system is simply bad public policy.

States all over this nation are dealing with budget issues and are raising the fees associated with the services given. For example, if roads need repair in Colorado, the registration fees on vehicles are increased. If funding of the University System in Minnesota faces a shortfall, tuition fees are increased.

Why should the renter of a car pay to build or fund a rail system when they are not using the services provided?

Already Florida is guilty of surcharging the tourism industry to pay for the construction of baseball stadiums for the Grapefruit League. Regardless of the fees, Vero Beach still lost the Dodgers this year. Pima County, Arizona already said they are building a new facility to lure away another Florida team. What will Florida’s response be? Raise the taxes on rental cars even further?

This entire system is flawed, and now, once again, Florida is looking to punish the tourism industry by creating a tax where the lion’s share of the burden is not even falling on the constituents in Florida. Once again, as in colonial times, we are facing “TAXATION WITHOUT REPRESENTATION.” Orlando is in a battle to keep conventions from the continuous shift to Las Vegas. Florida beach resorts are fighting for the competitive vacation to Southern European vacations. Why must our legislators continuously find ways to hurt the one industry that can lead the state out of its recession?

If you want light rail, if you want a true rail system, tax the people who will use it. Simply put, pay for the services you require.

You were elected to represent the interests of your constituents. They are looking to you to help turn the economy around and create jobs. Visit Florida, the organization charged with promoting the number one industry in the State, Tourism, already gets funded by a portion of the $2/day rental car tax. These collections are already off over 14 percent this year due to the decline in rental car activity. Now you wish to double that fee, and not even give the money to promote tourism – you want to use it to fund a rail system in South Florida that is primarily used by Florida’s commuting residents.

The competitive nature of car rental as compared to other forms of transportation is getting worse. This suggested fee will only compound the problem. Higher taxation will result in fewer cars being rented, fewer dollars to promote tourism, and ultimately fewer jobs provided by the car rental companies.

We are all cutting back staff. Every single car rental company has experienced a reduction in force. Our suppliers, many of which rely on the car rental industry for survival, are all suffering as well. Many have already gone out of business. This trickle-down effect of the problems we are all experiencing has devastated not only the car rental companies but also the small business owner who relies on the car rental industry for his business.

The task before the State Senate is monumental. We all recognize that. We encourage you to find a way to preserve the Florida Tourism industry and the jobs it creates. We want to help you and our employees, vendors and customers as well. To do so, as part of any plan that is ultimately put in place, we need your help in making sure it makes sense and has the individuals using the service benefit from the fees, not suffer.

Respectfully submitted,

Robert M. Barton, President
American Car Rental Association

Travel blogger and reader advocate Chris Elliott commented on ACRA's letter in his blog.

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