Arizona House Considers Rental Car Tax Increase

Guest opinion from Americans for Tax Reform

While much attention has been paid to Gov. Brewer’s sales tax increase and the Phoenix food tax, Arizona taxpayers should keep an eye on legislation (HB 2736) currently moving through the Arizona House that would raise the already high rental car tax in Maricopa County and impose a new tax on ticket sales for all Cactus League spring training tickets sold in Maricopa County. Funds from these tax increases would be used to keep the Chicago Cubs in Mesa. While this is certainly a desirable goal, raising the rental car tax, or any tax for that matter, is the wrong way to go about it.

Considerable costs are already heaped upon car rentals at Phoenix Sky Harbor Airport with the five taxes and fees that are currently applied. For example, these taxes and fees already add over 38% to the four day rental base price for a midsize SUV. Also keep in mind that the 18% sales tax hike that will be on the ballot in the May already threatens to substantially jack up the cost of renting a car.

While proponents of this tax hike may claim that this bill mainly affects out of state visitors, that is most certainly not the case. Arizonans renting replacement vehicles would be subject to this tax increase. Given the fact that replacement vehicles represent the majority of the car rental business, this tax increase would be paid mostly by Arizona residents.

HB 2736 would also have a negative economic impact on the local economy. One study shows that a recent localized rental car tax hike led to a 9% reduction in car rentals and as much as an 86% reduction in the number of days cars were rented. Likewise, HB 2736 will lead to reduced demand for rental cars and likely not meet revenue projections.

Additionally, the Goldwater Institute has pointed out that raising taxes to benefit a single sports franchise, as HB 2736 would do, may very well violate the Arizona constitution. Furthermore, Goldwater Institute also points out that this bill would grant a sports authority a level of power that may constitute an improper delegation of legislative authority.

ATR is asking lawmakers to reject HB 2736, which is simply bad policy and worse, violates the Taxpayer Protection Pledge. Five Pledge signers are listed among the bill’s sponsors. ATR urges those lawmakers (Sen. Verschoor and Reps. Adams, Nichols, Tobin, and Yarborough) to reconsider their support.


Comments

  1. Just the facts mam says

    Goldwater is doing this more and more. The surcharge helps all Cactus League teams.

    Helps to have the truth.

  2. …………………..
    “currently moving through the Arizona House that would raise the already high rental car tax in Maricopa County and impose a new tax on ticket sales for all Cactus League spring training tickets sold in Maricopa County. Funds from these tax increases would be used to keep the Chicago Cubs in Mesa”
    …….

    Brilliant move. RAISE the TICKET PRICE to keep the Cubs in town!

    Doesn’t work at McDonalds, which actually provides much more pressing service of cheap meals, so what makes them think it’ll work for a LUXURY item that EVERYONE is CUTTING BACK ON THIS YEAR BECAUSE THEY ARE OUT OF WORK?

    People are dropping season ticket packages in all sports already – and these are people who still have work. The out of work people have been out of the ticket buying for ANYTHING since before last year.

    These people are in La-La Land. The party’s OVER. We’re not fine, we’re in the deceptive calm of the eye of the hurricane, the WALL is approaching.

    It’s like trying to increase revenues from cigarette sales by a punitive cigarette tax designed expressly to REDUCE smoking. Politicians do it ALL the time and NEVER figure out why the expected revenues never appear, in fact decline. Stuck on stupid.

  3. Let the Cubs build their own stadium – they can afford to pay millions to players, then they can pay for their own.

    Rental car tax affects everyone in the Valley – even if you rent off-airport and need a replacement car while yours is in the shop.

    NO MORE STADIUM TAXES – go build your own ballpark and see if they come anyway.

  4. Motivated Voter says

    What is really galling about this is that the “No taxes” crowd is working to raise as many taxes as possible…without calling a spade a spade.

    Rental car taxes hit local consumers far harder than tourists. People rent cars when their car is getting serviced, after accidents, etc. Local companies foot the bill when incoming guests rent at the airport, and lots of companies have large rental fleets.

    Much as I support the Cubbies, I find it ridiculous that “leadership” is pushing for a large tax on one industry to support another. We have much larger fish to fry.

    But are they coming forward with solutions to the massive $3 billion deficit? No.

    Steve Yarbrough is working very hard right now to line his own pocket with a bill TRIPLING the amount of tax dollars to his own STO. Leadership’s inaction on the massive $3B deficit is costing us all a lot more than tax reform would — we all are paying more already just to service the additional state debt. The longer they fiddle, the lower our state credit score drops. Kirk Adams has already raised our taxes…we pay more now simply because Standard & Poor thinks we are sailing a rocky sea without a sober captain.

  5. “Motivated Voter”:

    You’ve hit the nail on the head!

    The GOP is notorious for duplicity!

    All too many of its officeholders use the anti-tax, small government as campaign rhetoric.

    Talking right and governing left has become “second nature”!

    Unlike the Democrats, Republicans seem to lack the courage of their convictions and are all too ready to throw their stated principles under a bus as soon as they come to office (and usually on behalf of some hidden and not so hidden special interest)

    Consequently, the political fulcrum has constantly veered left since 1932 as our political system has virtually become “One Rotten Bird with Two Wings” in the words of Pat Buchanan.

    Hopefully, we can begin to rectify the situation by retiring one of its most cynical operators, John McCain!

  6. Steve Calabrese says

    Surcharges on rental cars are already in excess of 45% at the airport, and climbing above 15-20% at many offsite locations.

    This bill will be a disaster if it passes.

  7. Let the Cubs build their own stadium – they can afford to pay millions to players, then they can pay for their own….I agree with that

  8. We are looking for the best priced car rental to be used on our upcoming trip to Spain, France, and Switzerland. I have not had a traffic violations in over 4 years, but I still think they are using them against me when it is time to rent.

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