National Consumers League

Group warns consumers about car rental taxes for upcoming holiday weekend

May 22, 2015

Contact: Carol McKay, NCL, 412-945-3242, carolm@nclnet.org

Washington, DC—With the Memorial Day holiday looming, the nation’s pioneering consumer advocacy organization, the National Consumers League (NCL), is warning consumers about excess taxes and fees that may be tacked on to their car rental bills this weekend. According to the League, car rental taxes have skyrocketed in recent years, growing 8 times since 1990. Today, 43 states and the District of Columbia place a tax on car rentals, and 118 rental car taxes are enforced.

This holiday weekend, according to AAA, an estimated 37.2 million Americans will travel 50 miles or more from their homes—a nearly 5 percent increase from the 35.5 million people who traveled last year and the highest travel volume for the holiday in 10 years. Of those, 33 million travelers will be driving to their destinations. With gas prices remaining relatively flat recently, this year’s Memorial Day gas prices are well under last year’s.

“With so many consumers renting cars for their travel this weekend, we wanted to warn them to be on the lookout for the taxes they may not have expected to pay, and to dispel some of the myths about who is affected by these taxes,” said NCL Executive Director Sally Greenberg. “There are a lot of misconceptions about who rents cars and is therefore footing the bill for the local projects the taxes fund. Many believe that the majority of car renters are tourists or businesses from out of state, making these taxes seem okay, but actually one in two car renters are local residents, and bear the brunt of these costs.”

Half of all cars are rented by in-state residents. The majority of self-paying car rental customers do not own cars and typically have low incomes; households earning a median household salary of less than $50,000 a year pay 31 percent of all home-city car rental taxes.

Where the taxes go is often another source of misconception, said Greenberg. “Revenue from these taxes rarely, if ever, goes to build roads, hospitals, schools, or libraries. Instead, they go to build stadiums, art museums, and convention centers—none of which are critical to the infrastructure of the community.”

In fact, said Greenberg, nearly half of all existing or proposed car rental taxes are earmarked for non-essential projects. NCL is a member of CART, a broad coalition of concerned organizations raising awareness of the dangers of an increasing reliance on car rental excise taxes.

For more tips, visit www.nclnet.org

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About the National Consumers League

The National Consumers League, founded in 1899, is America's pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit www.nclnet.org.