On Monday, the Senate passed SB 127, bipartisan legislation introduced by our office, by a vote of 15-4.
Currently, Alaska levies a 10% tax on all passenger vehicle rentals. While traditional car rental companies like Hertz, Avis, and Enterprise have collected this tax from their customers for years, the newer vehicle rental platform companies like Turo do not collect this tax on behalf of their vehicle owners. Many Alaskans renting cars through Turo are not aware they owe the tax, and it has been challenging to collect the tax without Turo's cooperation.
Senate Bill 127 will require Turo to collect the vehicle rental tax. It does not create a new tax. In fact, it lowers the tax rate to 8% for vehicle rental platforms like Turo, while keeping the rate at 10% for traditional rental companies.
Importantly, the bill protects Turo owners who haven't been collecting the tax by preventing the Department of Revenue from going after Turo owners to collect back taxes from previous years.
The revenue from the vehicle rental tax is historically appropriated to the Department of Transportation and that Alaska State Parks. It makes good sense that the folks who are renting cars to drive on our roads and visit our parks also pay to help maintain those services.
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