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Home / Business / Car-sharing apps – rising US popularity fuel tax debate

Car-sharing apps – rising US popularity fuel tax debate

PHOENIX (AP) – When Chris Williamson was in the market for a new family car, a timely ad and conversations with a co-worker convinced him to try something out of the ordinary. He bought a BMW 3 Series convertible and covers payments by renting it to strangers on a peer-to-peer car sharing app called Turo.

It allows its family of seven to have a finer car, mostly free. [19659002] "It's great to have that little extra income and don't have to worry about car payments," said Williamson, a Phoenix area teacher.

But his customers and others use image programs around the US to get their rental tax free. It has made them a target for car rental companies, airport authorities and local authorities. They say that users of the startup apps will pay the same taxes and fees that come with traditional rental cars.

At stake, hundreds of millions of dollars are in revenue that cities and airports expect to pay for stadiums and conference centers or to fund police, fire and other general operations.

"These companies are highly sophisticated, technologically savvy companies that have hundreds of millions of dollars invested in each of them," says Ray Wagner, senior vice president of governmental affairs at Enterprise Holdings, parent of the country's largest car rental company. "They should be expected to comply The same rules as a small, fun and pop car company located in rural Arizona. "

  Peer-to-peer car sharing apps like Turo are becoming increasingly popular so owners can rent their vehicles, but the services are in opposition from car hire companies and lawmakers wishing to tax and regulate them as rental cars. (May 2)

Turo says that Enterprise is trying to disrupt the competition.

Car companies, including Turo and GetAround, act as Airbnb for cars so people can Rent out their cars when they aren't using them. Founded a decade ago, they have taken off recently with the help of millions of dollars from venture capital firms and other investors. [1

9659002] It puts them in conflict with the $ 42 billion per year rental car industry and tourism and government agencies that tax it and regulate security and consumer protection.

The fight is warming in some three dozen state legislators, as well as the courts and offices of local tax authorities. Promised by lobbying from both sides, lawmakers deal with how to regulate an emerging industry without destroying it – a repeat of the recent battles between the taxi industry and Uber and Lyft, and between hotels and Airbnb.

"The tragedy would be if we snuffed out such a thing in their childhood that has a lot of potential," said Arizona Rep. Travis Grantham, a Republican who has introduced legislation supported by Turo who would exempt car sharing from all rental car fees except standard sales tax. 19659002] Tourist taxes have long been popular with politicians who can apply surcharges in hotel rooms and rental cars – paid largely by visitors who vote elsewhere – to raise money for local priorities.

Forty-four states charge rental cars – on top of the standard fee, if one applies – and most allow local authorities to withdraw their own as well, according to a March tax study, a conservative thought tank, airports often charge additional fees to pay for sprawling rental cars.

Taxes, Fees And surcharges can add as much as 30 percent to the cost of renting a car while generating millions of dollars. [196] 59002] In the capital Phoenix, the baseball league that draws fans to 10 stadiums for weapons training each March, can see a sharp decline in revenue as the new rental car platform grows, says President Jeff Meyer. Car hire taxes help cover debt payments for some of the Cactus League facilities and for the Arizona Cardinals football stadium.

California, Oregon and Washington adopted legislation sharing years before the industry took off, and Maryland did it last year. Bills of Practice have been introduced in more than 30 other states, with the fight in particular being contested in Alaska, Arizona, Colorado, Florida, Illinois, New Mexico and Ohio.

Turo also fights in court with the Los Angeles and San Francisco airport authorities, claiming the company should pay fees. Meanwhile, Chicago tax authorities wrote that car sharing is subject to rental car responses to corporate lawyer questions, according to a letter from the company.

In Arizona, Enterprise supports the law that would tax car exchanges as rental cars and requires them to enter into airport deals to use their facilities, while Turo supports a proposal that would exempt car companies from most taxes.

In Ohio, a detailed package of new car dealership regulations was tucked into the house version of the state's transport budget. It came as the Columbus Regional Airport Authority broke the ground on a new $ 140 million car rental facility that relies on a steady stream of car rental fees.

Partners won a temporary statement last month, when the provision was lost from the bill. But Ohio Sen. Bob Peterson, the No. 2 Republican, said he expects a stand-alone regulatory bill to be introduced soon.

"I think everyone agreed that this is a new industry that needs a bit more regulation," said Peterson.

Both sides describe their position as a matter of justice.

Those who support stricter regulations say that people who rent their cars for profit should not just pay taxes but fulfill the safety and transparency requirements of renting a car.

"The goal is leveling the playground," said Arizona Rep. David Livingston, a Republican sponsoring legislation to treat car companies as rental cars. "You want all these companies to operate with the same type of rules and regulations so they can compete and win the best, anyone."

Turos lobbyists point to billions of car rental companies that save taxes. Most states do not pay any sales tax for cars sold solely for rental, and allow these companies to pass consumer charges to customers.

Turo asks why users should pay rental fees if they are not exempt from other car taxes that are of benefit to rental car companies.

"Our host community are individuals just trying to compensate for a car," said Steve Webb, the company's communications director. "And Enterprise is this $ 24 billion Goliath that uses its political connections to stifle innovation."

Turo says more than 95% of Turo's 197,000 "hosts" share three or fewer cars on the platform. But some of the company's 350,000 listed cars are owned by people renting out small fleets.

Wagner, the Enterprise Executive, calls it a "politically motivated fiction" for Turo to focus on taxes paid by people who occasionally raise their car.

For Williamson, the Phoenix teacher who rents his BMW through Turo, the prospect of customers taking on the taxes and fees that apply. The people who rent their BMW seem to be splurge. He also sometimes rents his family Honda Pilot SUV.

"When you start crawling the price up for something, you're going to get people saying," Oh, I guess we won't take the convertible this weekend. We just take what Hertz has on special, "he said.


Associated Press author Julie Carr Smyth in Columbus, Ohio, contributed to this report.

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