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PHOENIX (AP) – When Chris Williamson was looking for a new family car, timely advertising and conversations with a colleague 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 private car sharing app called Turo.
This allows his family of seven to have a more enjoyable car, essentially for free.
"It's great to have that little extra income and not have to worry about car payments," said Williamson, a Phoenix area teacher.
But its customers and other rideshare users in the United States benefit from renting their rentals tax-free. This has made it a prime target for car rental companies, airport authorities and local governments. They say that users of new apps must pay the same taxes and fees as traditional rental cars.
So are hundreds of millions of dollars in revenue that cities and airports rely on to pay for stadiums and convention centers or to fund police, fire and other operations.
"These companies are very sophisticated and state-of-the-art companies, each investing in hundreds of millions of dollars," said Ray Wagner, senior vice president of government relations at Enterprise Holdings, the parent company of the largest corporation. car rental country. "They should be required to abide by the same rules as those of a small family-owned car rental company located in rural areas of Arizona."
Turo says Enterprise is trying to stifle competition.
Carpool companies, including Turo and GetAround, operate as Airbnb for vehicles, allowing people to rent their car when they are not using it. Founded about ten years ago, they have recently started with the help of millions of dollars from venture capitalists and other investors.
This puts them in conflict with the car rental industry, which costs $ 42 billion a year, and with tourism agencies and government agencies that tax and regulate safety and consumer protection.
The battle is heating up in about three dozen national legislatures, as well as in the courts and offices of local tax authorities. Faced with lobbying on both sides, lawmakers are wondering how to regulate an emerging industry without destroying it – a repeat of recent fighting between the taxi industry and Uber and Lyft, as well as between hotels and Airbnb.
"The tragedy would be if we delete something like this in his childhood that has a lot of potential," said Arizona representative Travis Grantham, a Republican who introduced a law backed by Turo that would exempt the Carpool from any rental car taxes except standard sales taxes.
Tourist taxes have long been popular with politicians who can use supplements on hotel rooms and rent cars – paid in large part by visitors who vote elsewhere – to raise funds for local priorities.
Forty-four states levy excise taxes on rental cars – in addition to the standard sales tax, where applicable – and most allow local governments to also levy theirs, according to a March study of the Tax Foundation, a conservative think tank. Airports often add surcharges to pay for sprawling car rental facilities.
Taxes, fees and surcharges can add up to 30% to the cost of renting a car while generating millions of dollars.
In the Phoenix metropolitan area, the baseball league that attracts fans in ten stadiums for spring training, could experience a sharp drop in revenue as the new car rental platform grows, said its chairman Jeff Meyer. Rental car taxes cover the debts of some Cactus League facilities and the Arizona Cardinals football stadium.
California, Oregon and Washington passed a car-sharing law several years before the industry took off, and Maryland did so last year. Legislation governing this practice has been introduced in more than 30 other states, with the fight being particularly controversial in Alaska, Arizona, Colorado, Florida, Illinois, New Mexico and the United States. ;Ohio.
Turo is also fighting in the courts against Los Angeles and San Francisco airport authorities, who argue that the company should pay a fee. At the same time, the Chicago tax authorities have written that car-sharing is subject to rental car taxes in response to questions from a company lawyer, according to a letter provided by the society.
In Arizona, Enterprise supports legislation that would tax carpools like rental cars and force them to sign agreements with airports to use their facilities. Turo supports a proposal that would exempt carpool companies from most taxes.
In Ohio, a detailed set of new regulations on rideshare companies has been incorporated into the House's transport budget version in the House. This occurred when the Columbus Regional Airport Authority inaugurated a new $ 140 million car rental facility, which is based on a steady stream of rental fees.
The peer-to-peer companies got a temporary stay last month, when the provision was removed from the bill. But Ohio Sen. Bob Peterson, Republican No. 2, said he expected an independent bill on regulation would be introduced soon.
"I think everyone was in agreement that it's a new industry that needs more regulation," Peterson said.
Both parties describe their position as a matter of equity.
Proponents of stricter regulations say that people renting cars for profit must not only pay taxes, but must also meet the requirements of security and transparency.
"The goal is to level the playing field," said Arizona representative David Livingston, a Republican who sponsors legislation to treat car-sharing companies as rental companies. of cars. "You want all these companies to operate with the same kind of rules and regulations so you can compete and the best one wins, no matter what."
Turo lobbyists point out that car rental companies save billions of dollars in taxes. Most states do not levy sales tax on vehicles sold exclusively for rental and allow these companies to pass on vehicle registration fees to their customers.
Turo asks why its users should pay the rental taxes if they are not exempt from other vehicle taxes that benefit the car rental companies.
"Our host community is made up of people who are just trying to offset the cost of a car," said Steve Webb, vice president of communications for the company. "And Enterprise is this $ 24 billion Goliath, which uses its political connections to stifle innovation."
Turo says more than 95 percent of its 197,000 "hosts" share three cars or less on the platform. However, some of the company's 350,000 listed vehicles are owned by people who rent small fleets.
Wagner, the company's executive, calls it a "politically motivated fiction" for Turo to focus on taxes paid by people who occasionally sign up for their car.
For Williamson, Professor Phoenix who rents his BMW through Turo, it is worrying to see his customers assume these taxes and surcharges. People who rent his BMW are looking to splurge. He also sometimes rents the Honda Pilot SUV from his family.
"Every time you start raising prices, you'll get people saying," Oh, I guess we're not going to take the convertible this weekend. We will just take what Hertz has in special, "he said.
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Associated Press editor Julie Carr Smyth in Columbus, Ohio, contributed to this report.
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