The Global Business Travel Association (GBTA) testified before the House of Representatives Committee on Judiciary, Subcommittee on Courts, Commercial and Administrative Law at hearing focused on H.R. 2469, the "End Discriminatory State Taxes for Automobile Renters Act of 2011".Introduced by Rep. Steve Cohen (D-TN) and Rep. Sam Graves (R-MO) in July of 2011, the bill proclaims that excise taxes on car rental consumers are unwarranted and would enforce a permanent halt on any new taxes. In August 2011, it was referred to the House Judiciary Subcommittee on Courts, Commercial and Administrative Law. Congress has enacted similar protections from discriminatory state and local excise taxes for other interstate travelers such as airline, train and bus passengers, GBTA agrees with the bill’s sponsors that this is a logical and needed extension to protect business travelers.
A “discriminatory” travel tax is a tax that imposes a burden on travel services above and beyond general sales taxes. Excise taxes on car rentals are classic examples. This sort of tax differential is often justified with the claim that travel taxes shift part of the tax burden to nonresidents, but the reality is that businesses spend substantial amounts for rental cars in their own cities.
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