Newark Car Rental Tax Funds Unrelated Programs

A rental car tax at New Jersey’s Newark Liberty International Airport is helping to fund an animal shelter, a park and a jobs program in Newark, according to a report by The Wall Street Journal. The car rental tax is 5%.

“It’s hard to get these projects built,” Adam Zipkin, former director of economic and housing development for Newark Mayor Cory Booker, told The Wall Street Journal. “Without the rental-car tax, there was no other pot to make up that difference.”

New Jersey lawmakers passed an economic stimulus act in 2009, which allowed cities to enact a tax up to 5% on airport car rentals — Newark and Elizabeth were the only New Jersey cities qualified to impose the tax, according to the report.

Avis Budget Group and Hertz Corp. sued Newark in Essex County Superior Court to stop the rental car tax. They argued that the tax went against the U.S. Constitution’s Commerce Clause, which gives Congress the control to regulate trade among the states, says the report. A trial court disagreed with the car rental companies.

After this court ruling, Newark’s council distributed $12 million (from the tax) to initiatives to clean up empty lots and fund the city’s economic development corporation. In addition, $3 million was put toward Newark’s $639 million general budget, says the report.

“It’s always perceived to be easier for politicians to stick it to out-of-town travelers who will never use the service they are now paying for than to have the courage to face their constituents and ask them to foot the bill,” Richard Broome, executive vice president of corporate affairs and communications at Hertz Corp., wrote in an email. “That doesn’t make these taxes right or good public policy.”

Click here to view the full Wall Street Journal article:

Comment On This Story

Comment: (Max. 10000 characters)  
Please leave blank:
* Please note that every comment is moderated.


Newsletter: Sign up to receive latest news, articles, and much more.

Read the latest

Auto Focus Blog: A blog covering fleets, auto rental and the business of cars

Trends Moving the Truck Market

Storylines that emerged from the 2018 Work Truck Show include the increasing need for on-site productivity, inclusion of active safety systems in trucks, DPF frustrations affecting product decisions, data management, and the growing link between fleet management and company revenue.

MIT Study Reinforces the Newfound Importance of Fleet

Uber and Lyft drivers make far less when factoring vehicle expenses, though the actual numbers are now in dispute. A proper lifecycle cost analysis would’ve helped, and shows the benefit of collaboration with fleet professionals.

What a Connected Fleet Means to Avis (and Car Rental)

Counter bypass is just the beginning. The promise of a “data-driven ecosystem” that connects renters with the rental agency, retail services, and even the city is a better managed fleet, an improved user experience, and new revenue opportunities during the rental itself.

Job Finder: Access Top Talent. Fill Key Positions.