Proposed Rental Car Tax in Milwaukee Could Harm Local Economy

The National Business Travel Association (NBTA) and the Wisconsin Business Travel Association (WBTA) are urging civic leaders in Milwaukee, Wis., to reject a proposal that would establish a new rental car tax ranging anywhere from $2 to $18 per transaction to fund a commuter rail project.

According to an NBTA report released in August 2009, Milwaukee’s airport currently ranks 3rd highest of 50 U.S. markets in general sales and travel taxes. The magnitude of the proposed taxes, if passed, would catapult Milwaukee to the top of the list.

Michael W. McCormick, NBTA president & COO, said, “Officials in Milwaukee should thoroughly consider the consequences of a new rental car tax. The city already approved an increase in the food and beverage tax last year; an additional tax on travelers would only continue to increase the burden on visitors.”

In seeking funds to build a light rail system, which benefits all residents of Milwaukee, Racine and Kenosha, the state legislature has identified car rental consumers as the people who should shoulder these costs. However, as travel budgets are currently limited due to a weak economy, these additional costs will have a negative effect on the entire region’s hospitality industry.

McCormick continued, “While raising or implementing taxes on lodging, rental car and meals services affects out-of-town visitors, cities underestimate the number of local businesses who make use of the same services. In actuality, these taxes are not only burdening travelers, but also hurt local enterprises that contribute to the local economy.”