“Thank you, car rental customers!”

This should be part of the opening welcome to kick off the 2019 Atlanta Jazz Festival. The concert is free, made possible because of generous sponsors such as Publix, Lyft, and Bud Light, as well as the Atlanta Jazz Festival Society, a 501(c)(3) non-profit.

What isn’t trumpeted is the fact that airport car rental customers are footing the lion’s share of the festival’s total expense, appropriated from the city’s excise tax on airport rentals.

 - Photo courtesy of Pixabay.

Photo courtesy of Pixabay.

Atlanta’s Office of Cultural Affairs, which produces the event, must ask the Atlanta City Council to approve the proceeds of this tax each year to be used for the festival. This year, the council approved $350,000. This is up from the $250,000 the festival received last year and the $100,000 it received from the proceeds in 2014.

The form to authorize the release of funds spells out the legislative authority to ask for the money:

“… proceeds of the tax are to be expended … for the purpose of promoting industry, trade, commerce, and tourism; ….”

The form also contains a line on why the festival needs this money:

“…. due to a downturn in the economy the amount of revenue generated from sponsorship has decreased significantly; …”

This last line in particular is a broken record — it was also used in 2014.

Is Atlanta’s economy in a downturn? Atlanta is outpacing the national average in jobs growth in the last five years by a comfortable margin. Of the country’s 10 largest metro economies, Atlanta placed second only to San Francisco in terms of growth.

Have the festival’s sponsorships “decreased significantly?” A web search shows 14 companies sponsored the 2018 event. At this point in 2019, still a good four and a half months from the Memorial Day weekend festival, the 2019 website reveals 18 sponsors.

Sure, the number of any event’s sponsors does not necessarily correlate with the total dollar amount. But it at least appears that the sponsorship revenue for 2019 exceeds 2018 — and yet the festival is asking for $100,000 more in tax money this year.

The festival is obviously within its rights to ask for this money. But the reasoning on why it needs the money appears faulty, even brazen based on readily available stats. Yet it’s not unexpected, given the larger context of how car rental taxes have been appropriated over a generation.

Since the early ‘90s, car rental customers have been taxed to pay a significant portion of projects such as ballparks, civic projects, and festivals that provide no direct benefit to them.

In many town halls and legislative chambers across the country there was little, or not enough, advocacy to point out that this is bad tax policy. Time and time again, political expediency won out easily over fairness.

But things have changed.

The car rental excise tax amendment in the 2018 FAA reauthorization is designed to curtail these types of money grabs. However, the amendment grandfathers existing discriminatory taxes and fees. This case appears to be a grandfathered tax, even though the festival must specifically ask for the funds each year.

At the very least, this case underscores the importance of the car rental excise tax amendment, which is waiting to be enacted pending the results of a study by the Government Accountability Office.

It should also highlight that off-airport rental car transactions are still fair game for predatory excise taxes. There is still work to be done to get off this merry-go-round.

This summer in Atlanta, a sponsor to the Atlanta Jazz Festival can get its name in front of 300,000 music-loving attendees for a few thousand dollars. You’d think a shout-out to the ones donating $350,000 to the event, car rental customers, would be in order.


Related: ACRA: What Is the Future of Rental Car Taxes?


 

Author

Chris Brown
Chris Brown

Executive Editor

Chris is the executive editor of Business Fleet Magazine and Auto Rental News. He covers all aspects of the fleet world.

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Chris is the executive editor of Business Fleet Magazine and Auto Rental News. He covers all aspects of the fleet world.

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