US car companies back end of unfair taxes on hire cars

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Car Rental News - 17/06/2010


American automakers are supporting moves to end taxes that discriminate against car hire customers.

A policy body acting on behalf of US car makers announced its support for moves in the Congress to end a variety of state taxes that discriminate against people who use car or truck hire services. The taxes, which so-far total $7.5 billion dollars, were set up on the assumption that only tourists rent cars or trucks. As tourists are assumed to be wealthy, the taxes are considered a form of ‘luxury tax’.

The American Automotive Policy Council (AAPC) represents General Motors, Ford Motor Company and Chrysler Group. AAPC President Stephen Council said the logic behind the taxes is a fallacy and it simply is not true that most people using hire services are wealthy or tourists. In fact, figures show that more than half of all cars are hired from neighbourhood locations, not airports. Collins insisted that a large percentage of cars hired in the USA are used by those in low- and middle-income families.

The AAPC insists that this taxation regime is not founded on fair taxation principles and hurts all American jobs. Therefore, AAPC is supporting H.R. 4175, “The End Discriminatory State Taxes for Automobile Renters Act.” The act prevents local and state governments from enacting discriminatory taxes on hire vehicles in the future.

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