The Curb Auto Rental Taxes (CART) Coalition, a group of national organizations dedicated to protecting consumers from discriminatory car rental excise taxes, has announced that U.S. Representatives Sam Graves (R-Mo.) and Steve Cohen (D-Tenn.) have reintroduced HR 1528, the End Discriminatory State Taxes for Automobile Renters Act (EDSTAR).
The bill would protect consumers by limiting the discriminatory taxes state and local legislators can impose on automobile rentals by leveraging Congress's constitutional authority to regulate interstate commerce.
"In 1994, Congress passed legislation to prevent new taxes on car rental companies to fund non-airport related expenses," said Rep. Graves. "Unfortunately, local governments have been exploiting a loophole in the law ever since, and many non-airport projects continue to be funded with these taxes. This practice is not only deceiving, but it discourages tourism in America. My bill will close the loophole that discriminately taxes unsuspecting rental car consumers."
"While state and local governments must raise revenue, it is wrong to impose discriminatory taxes on out-of-state citizens," said Congressman Cohen. "These unnecessary and unfair taxes raise prices for consumers and harm local employers, and our bill would put an end to them."
State and federal courts have ruled that rental car transactions constitute interstate commerce per the Commerce Clause. As such, the legislation stands to align the rental car industry with other modes of interstate transportation including railroads, airlines and buses and would protect rental car consumers from discriminatory taxes in the same way Congress has protected consumers who utilize these other forms of interstate transportation.
EDSTAR would block states and local authorities from imposing new rental car taxes, but it would not alter those already in effect. Since 1990, more than 100 burdensome rental car taxes have been enacted in 43 states and the District of Columbia, adding up to more than $7.5 billion in taxes above and beyond the standard sales taxes typically assessed on other goods and services.
"Car rental excise taxes are regressive, discriminatory, economically harmful and constitutionally troublesome," said Kevin Lawlor, CART spokesman. "Our broad coalition believes that this bill will protect consumers by preventing state and local legislators from furthering an existing problem."
Rental car taxes unfairly single out consumers who travel because they are taxed without representation. Without accountability, such revenue is often used recklessly to fund extravagant projects having little to do with transportation and providing little benefit to those actually paying the taxes.
CART will continue advocating for the bill throughout the legislative process and is counting on the bill's sponsors and co-sponsors to continue championing the issue, according to the organization.
CART partners with organizations such as the American Society of Travel Agents, Americans for Tax Reform, the National Urban League, United Auto Workers, Property Casualty Insurers Association of America and National Consumers League.
For more information, visit http://www.curbautorentaltax.com/default.aspx.