Maine Residents Fight to Keep Car Rental Taxes Down

In an effort to stop a potential tax increase from 10 percent to 12.5 percent on rental cars, Maine residents have signed a petition in opposition, according to USA Today. If it is determined that the signatures on the petition are valid, the tax increase would be put to a vote in June 2010.

Currently, as many as 43 states and the District of Columbian were imposing 114 separate state and local excise taxes for renting and leasing vehicles at the end of 2008. According to research by the Coalition Against Discriminatory Car Rental Excise Taxes, only 14 states imposed those taxes in 1990.

Further, Executive Director of the National Business Travel Association Michael McCormick says the taxes could cost a Fortune 100 company as much as $5 million to $10 million a year.

Currently, those renting vehicles in New Jersey pay a $5 per day state tax and a sales tax. Thanks to a new tax reform law, certain municipalities will impose a 5 percent excise tax on car rentals.

Some states, including Wisconsin and Florida, have imposed taxes to help fund mass-transit projects and/or rail projects.

In Wisconsin, counties will be able to charge $18 on each rental transaction. According to the coalition, the total tax rate could increase to more than 70 percent on a $30 a day car rental in Milwaukee, Racine and Kenosha counties.

In Florida, lawmakers are debating doubling a $2 car rental tax in a special legislative session in December.

The news report further went on to say that legislation is pending in Michigan to add a $2.50 excise tax to each car rental transaction.

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