Special tax for car rentals OK’d

Monday, June 4, 2001 | 10:31 a.m.

CARSON CITY -- Tourists flying into Las Vegas could be hit with another 3 percent tax when they rent a car.

That would be added to the present 23 percent now charged on car rentals.

The Senate Sunday approved 19-2 an amendment offered by the auto rental companies to permit them to increase the fee by 3 percent to cover cost of registration and other expenses imposed by the state.

Bob Ostrovsky of Hertz said it was still below the taxes and fees charged in other major cities, some of which impose the tax to build sports stadiums.

The bill returns to the Assembly for agreement on the amendment. Assemblyman David Parks, D-Las Vegas, who sponsored Assembly Bill 460, said he wanted to study the amendment but initially did not have any objections.

AB460 will allow the state to recapture some $29 million now going to the auto rental business over the next two years. That money would help give schoolteachers a raise.

At present, a person renting a car at McCarran International Airport pays a 6 percent sales tax. The rental business keeps 4 percent, with the other 2 percent coming to the state. Under AB460, the full amount comes to the state.

In addition to the 6 percent, rental customers are charged the state's standard 7 percent sales tax, plus a 10 percent airport fee, Ostrovsky said. Another $3 a day is scheduled to be tacked on the cost of renting a car, he said, to build a new headquarters for the car rental agencies and move them out of the airport.

If the full amount is imposed, a car renting for $50 a day will actually cost customers $65.50, with the added tax and fees.

Ostrovsky said the new 3 percent would be optional and could be used in price competition among the firms.

Gov. Kenny Guinn said previously he would not oppose any plan to allow the rental companies to recover their expenses. In adopting a stance of hitting tourists, Guinn said he didn't care about the person coming from Chicago having to pay the tariff.

Guinn's spokesman, Jack Finn, said Sunday he doubted Guinn had any problem with the new proposal.

AB460 was opposed by Sens. Maggie Carlton, D-Las Vegas, and Mike McGinness, R-Fallon. Carlton objected to removal of a section of the bill that allowed all companies to keep up to $100,000 to cover registration and other state costs. That was deleted when the new 3 percent tax was included to take care of those costs.

She said the loss of that section would hurt the small operator. The big companies, Carlton said, could afford not to impose the 3 percent while smaller operators would have to levy the extra fee.

The bill now includes also the creation of a legislative oversight committee of the state Transportation Department.