IBJNews

Car-rental companies say higher tax will hurt locals, too

Back to TopCommentsE-mailPrintBookmark and Share

A proposal by the city of Indianapolis to raise the local tax on car rentals is drawing the ire of the industry, which argues the increase will affect the local population as much as visitors.

Mayor Greg Ballard and City-County Council President Maggie Lewis on Monday announced an agreement on the city's $1.1 billion budget that calls for raising local car-rental taxes and the city’s admission tax to avoid a potential reduction in services. The proposal still must be approved by the council.

The local tax on car rentals would increase to 6 percent from 4 percent. Combined with 4-percent state rental tax and the 7-percent state sales tax, Marion County car-rental customers would pay a combined 17-percent tax after the increase.

Without the raise, the 15-percent car rental tax rate already accounts for Indianapolis’ being ranked No. 8 on the Global Business Travel Association's list of the worst 10 cities for travel taxes in 2012. The group also considered Indianapolis' 9-percent tax on food and beverages and its 17-percent tax on hotels when making the ranking.

Visit Indy, the city's tourism agency, typically favors proposals that support the Capital Improvement Board of Marion County, spokesman Chris Gahl said. The CIB, which collects the car-rental tax, funds half of the agency’s operating budget.

The CIB oversees Lucas Oil Stadium, Bankers Life Fieldhouse and the Indiana Convention Center. It collected $2 million in car-rental taxes in 2011. Last year’s collection figures are not yet available.

“We are positioned and seen in the visitor’s mind as a high-value destination, even taking into consideration the hotel tax and the projected [higher] car rental tax,” Gahl said.
 
A study released last month by Visit Indy estimated the economic impact of the tourism industry increased 10 percent in 2011, to $3.95 billion. An estimated 22 million visitors came to the city, most of them for leisure activities.

Gahl said Visit Indy plans to convene its executive committee to study the proposal to raise the car-rental tax.

The car-rental industry opposes a tax increase, arguing that it affects local residents as well as out-of-towners.

“It’s flat out discriminatory and unfair,” said Laura Bryant, a spokeswoman for St. Louis-based Enterprise Holdings Inc., which operates the Enterprise-Rent-A-Car, Alamo Rent A Car and National Car Rental chains.

The three combined have 24 locations in Marion County that would be affected by the tax increase.

Enterprise Holdings and its competitors have argued in recent years, as more cities turn to rental-car taxes to raise revenue, that the taxes may cause more harm than good.

Though local politicians routinely market the levies as so-called travel or hospitality taxes on visitors, more than half of car rentals are actually local, industry figures show.

Indianapolis-based Ace Rent A Car, for instance, rents cars every week to motorists whose vehicles are being serviced or repaired following an accident, said Charlie Mullen, co-owner of the local chain.

“We do a lot of replacement rentals,” he said, "so everybody pays.”

Nationwide, more than 100 car-rental excise taxes have been enacted across 43 states and the District of Columbia in recent years, raising more than $7.5 billion, according to the industry.

The American Car Rental Association last year supported federal legislation that would prohibit future “discriminatory taxes” imposed upon car rental customers by state and local governments. The proposal failed to advance out of a House committee.

Meanwhile, the tax on tickets to attend Indianapolis Colts and Indiana Pacers games would rise to 10 percent.

 

ADVERTISEMENT

  • singapore tour
    I want to make sure that it is very important to see whether or not his is something that is going to improve in many way.
  • Oh, I get it...
    ...it's Orwellian because the CIB only improves the capital of Jim Irsay and Mel Simon rather than the capital of the public, whom it is said to represent.
  • Orwellian CIB
    The real issue is the existence of the CIB and the phony tourism industry - an industry supported totally by tax dollars, with profits going to billionaire sports team owners and hotel chain owners, with a few wage slaves sweeping up the crumbs.
  • Council
    First, while Ballard earns most of the blame for this proposal (has the man ever met a tax or fee he didn't want to increase?), Republicans and some Democratic councilors are also supporting it. Second, it is clear that neither the Mayor or Council members care one bit that these taxes hit locals far more than "visitors." Their goal is to put more money in the pockets of the CIB so the CIB has the money to give millions out to the Pacers and Colts. The CIB is the absolute worst gov't (or quasi gov't) entity in the city/county. The CIB leadership appointed by Ballard, Bob Grand and Ann Lathrop, have proven to be completely disinterested in doing what is best for the public.
  • Car rental rates
    The city of Indianapolis seems to want to get out of town visitors to return to all events in this city. Why would they raise the rates on car rentals. This would tend to keep tourists trade down.
  • Ridiculous!
    I recently rented a car from the airport ( I live in Indy) and it was almost double the estimated cost due to all the taxes surcharges and fees. I've never seen so many different taxes for one thing. I will definitely be limiting my use of car rentals. I am willing to contribute to reasonable taxes and participate in making Indy a nice place to live, but this is out of line. Lets focus on reducing spending and especially irresponsible spending!
  • So Republicans want to raise taxes
    Perfect example of how this hurts everyone: My car has to go in to the shop for repairs and an insurance company is providing me a rental. This car is being rented from a car rental company in Indianapolis. Now, when taxes are raised on rental car companies, the cost of the rental to the insurance company will increase, therefore premiums will increase to cover the new fees, therefore I will pay those increased premiums. So thanks for raising taxes, republicans. Isn't that supposed to be one of the reasons to vote republican? I guess when you're preoccupied with forcing children to learn a communication style as outdated as the telegraph (cursive) and adding amendments to the constitution for which we already have a law on the books to prevent (gay marriage), you lose the focus on your party's core values.
  • sorry
    When you are in the travel industry, tough sow said the cow.
  • Unintended Consequences
    This is what happens with such narrow-focus tax policy. Indiana and all the locals need to seriously rethink their approach to revenue...and stop wasting money. Broadest possible consumption tax, on everything, even used goods, durable goods, food, meds, literally everything, makes much more sense, and would be a vastly lower rate. It's far past time to repeal all these nit-pick taxes and replace the whole lot with broader application of the sales tax and stop this madness.

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. Good Day I am Mr (Victoria Wright) from United state of America, i stayed in NEW YORK, and i have a broke up business, until i found this company email who help me to gain a loan for business,, and now i want to used this short medium to congratulate the below company for the fast and safe money they loan to me without any form of collateral, i loan 500,000USD from the company to save my business and lots more, i saw their mail on the internet, everyone always give testimony for what they did, so i quickly contacted them and they all did everything for me without stress and my money was sent to my account just 3 days later, i was surprise and i feel so glad, now i have a standard business control agent who help me, now i will advice those who need urgent loan to contact him at the bellow email:zenithfirm12@gmail.com

  2. NOTICE:This is to inform the general public that Vampires are real. My name is James Franklyn.,am an agent of vampire,am here to introduce our new world trend to you,a world of vampire where life get easier,we have made so many persons vampires and have turned them rich,you will be assured long life and prosperity,you shall be made to be very sensitive to mental alertness,stronger and also very fast,you will not be restricted to walking at night only even at the very middle of broad day light you will be made to walk.In case you are wildly oppressed by some unscrupulous persons we can still help you fight them.Your protection is assured immediately you join.Just contact the bellow email if you are interested we are here to attend to you anytime you want us. Contact the bellow email for more details. Email:vampirescreed@hotmail.com Sincerely: James Franklyn.

  3. Bravo! Someone else that is willing to speak the truth! Bravo!_____NBCSN is available in almost 2 MILLION more homes than just a few years ago, but Indycar STILL gets less total viewers than it did just a few years ago when NBC took over Versus. Attendance and ratings cratered with the end of season races (just when the title battle got "interesting" HAH!__________And now...new race in Basilia, where Miles celebrated the "rich history" of Indycar racing there. Rich history? What, 7 events in the 100 years of AOW? Yep, some history. Well, at least its an oval. It's not??? Are you kidding me??? Gosh darn road racin furriners.

  4. PURITY RAY LOAN OFFER........ Have you been denied by your banks,or are you in need of of an urgent loan to pay of your bills we are capable of giving loans @ cheaper rate to interested individuals, student, companies and members of the public in need of finance to settle bills, we do offer considerable loans which you can count on. For more information on our various types of loan,then you will have to contact PURITY RAY LOAN FIRM, to help you achieve your desire LOAN APPLICATION FORM TO BE FILLED BORROWERS INFORMATION * Full name:………………………. * SEX * ……………………………. * Country………………………….. * State:……………………………. * Land:…………………………….. * Occupation:…………………….. * phone number:…………………. * Telephone: ………………………….. * Age:………………………………. * Amount needed as loan:……… * Loan Duration:………………….. * Propose of Loan:……………….. * Annual revenue:………………… * Monthly Income:……………….. * Guarantee:………………………. * Payment: monthly or annually Email.....purityrayloanfirm@gmail.com Thank you and God bless Mr Purity Ray PURITY RAY LOAN FIRM we tend to serve you better

  5. Problem: most of the people responding to this article don't know about this service AT ALL! Why? Lack of awareness. This isn't IndyGo. This is CIRTA: might as well be the mattress company because they are asleep at the wheel - something like 3 directors over the last year? Playing with federal grant money is great! This "region" wants commuter rail service, has spent MILLIONS on Transportation studies yet can't even support a commuter bus line? This is largely for suburban riders to get to downtown - not for "service people to work in our hotels and restaurants" ! Get your head out of your backside!! These are professionals, students etc. that don't want to fight traffic, save some money on parking, gas, stress.... if CIRTA would put their federal money into widely promoting the sevive to Greenwood, Fishers & Carmel instead of finding directors and studies - this would be a successful service. Our family uses(d) it daily for the last several years - but the recent uncertainty & now unreliability due to cuts from Carmel has been a problem. Now, costs us an additional $350/month for gas & parking ( $4200/year) plus vehicle wear, service, environmental impact ... YES - this REGION needs this this type of service in order to keep growing and getting the people it needs to fill skilled positions in downtown Indianapolis. Think outside of your own car !!!

ADVERTISEMENT