FEDERAL LEGISLATION THREATENS CITY VENUE TAXES ON RENTAL CARS

This week, Congressman Sam Graves (R-MO) submitted an amendment to the Federal Aviation Administration (FAA) Reauthorization and Reform Act of 2011 that would prohibit local governments from imposing taxes on car rental companies and consumers at airport and non-airport locations.  (Currently, state law authorizes Texas cities to hold an election to adopt a tax on the short-term rental of a motor vehicle to support certain sports and community venue projects located in the city or county.) 
 
The effect of the amendment would be to invalidate the Texas law allowing cities to hold an election to adopt a venue tax on rental cars to fund local sports and community projects.  The amendment was recently modified in the Rules Committee of the U.S. House of Representatives, but still may call into question a city’s ability to adopt a tax on rental cars in the future.

The League will continue to monitor and report as needed on the FAA Reauthorization and Reform Act as it moves through the legislative process.


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