Enterprise Holdings - a member of the nonpartisan Coalition Against Discriminatory Car Rental Excise Taxes - announced on Oct. 29 that it will begin publicly advocating on behalf of its WeCar car-sharing customers and reminding government officials about the unintended consequences of local car rental excise taxes.
Enterprise Rent-A-Car's car-sharing and car-rental customers are taxed at the same rate. Enterprise provides customized car sharing to corporate campuses, universities and municipal governments through its WeCar program in 17 states.
"We have been actively working for years to draw attention to these unfair taxes - which single out local as well as out-of-town car rental customers - because they are arbitrary, discriminatory and misleading," explained Raymond T. Wagner, vice president of government and public affairs for Enterprise Holdings. "And we intend to continue speaking out on behalf of our customers, regardless of whether their rental is for an hour, a day, a week or longer."
On June 15, Wagner testified in support of H.R. 4175, the "End Discriminatory State Taxes for Automobile Renters Act of 2009." before the U.S. House of Representatives' Subcommittee on Commercial and Administrative Law, alongside the National Consumers League's Executive Director, Sally Greenberg.
Coincidentally, that same day, a Queens, N.Y., Supreme Court Justice ruled in favor of a for-profit car-sharing company and agreed that the defendant was in '"the trade or business of renting or leasing motor vehicles" as those words are traditionally and plainly understood. As a result, the court found that although a members-only car rental company may advertise itself as an alternative to "traditional rental cars," it may nonetheless claim the rental-car law's protections. In other words, the court stated, "this bargain - use of a car in exchange for a fee - appears a little different from ['traditional'] companies."
Wagner may have been surprised by the timing, but not by the car-sharing company's legal arguments or the court's concurrence. "We obviously operate a for-profit company, including our car-sharing operations," he said. "That means we accept all of the challenges, responsibilities and obligations that go along with running a successful, sustainable local car rental business, while still supporting non-profit community-based initiatives."
The National Consumers League notes that car rental excise taxes can be regressive in their impact on local low-income residents, many of whom do not own a vehicle and instead rent one. This is particularly true for Enterprise Rent-A-Car customers - nearly one in four earns less than $40,000 annually; one in 10 earns less than $30,000; and one in 20 earns less than $20,000.
That is one of the reasons that Jay Ryan, vice president of the Alamo, Enterprise and National brands in Florida, objected last year to the state legislature's proposed doubling of car rental taxes, from $2 per day to a $4 daily rate. Ryan further pointed out that car rental excise taxes impact car-sharing programs like WeCar, which had just been launched on the University of South Florida campus. He stated, "This is just another example of why the coalition universally opposes car rental excise taxes. These taxes are unfair, period. And they are particularly so for students and others who cannot afford to operate their own cars."
Because car rental excise taxes continue to proliferate throughout the country, Wagner is encouraging smaller for-profit car-sharing companies like Zipcar to join the broad-based Coalition Against Discriminatory Car Rental Excise Taxes. The coalition already includes car rental and car sharing, such as Enterprise Rent-A-Car's WeCar, plus travel industry, consumer and insurance organizations.
"We need to speak up on behalf of our customers and let legislators know, over and over again, how wrong it is to target one group of consumers with special excise taxes," Wagner stated. "This national epidemic of car rental taxes is particularly appalling because they frequently are sold to voters as 'tourist taxes' to garner public support at the polls."
As recently as last week, Chief Strategy Officer Greg Stubblefield delivered a similar message on the Charlotte Business Journal editorial pages. "Car rental taxes, in effect, penalize these consumers for choosing sustainable transportation alternatives, regardless of whether they are renting for an hour, a day, a week or longer," Stubblefield stated. "And we call on all federal, state and local officials - including Charlotte's leaders - to thoughtfully consider the unintended consequences of how they fund important projects and programs, especially during these tough economic times."