Legislature(2019 - 2020)ADAMS 519
02/27/2020 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB79 | |
| HB30 | |
| HB102 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 205 | TELECONFERENCED | |
| += | HB 206 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 79 | TELECONFERENCED | |
| += | HB 30 | TELECONFERENCED | |
| += | HB 102 | TELECONFERENCED | |
HOUSE BILL NO. 102
"An Act relating to rental vehicles; relating to
vehicle rental networks; relating to liability for
vehicle rental taxes; and providing for an effective
date."
3:05:23 PM
REPRESENTATIVE ADAM WOOL, BILL SPONSOR, provided a brief
statement about the bill. He read the sponsor statement:
The ways that Alaskans procure transportation services
have changed over time. In the past, getting off a
commercial flight and heading to the nearest rental
car agency was common practice. Now, consumers are
turning increasingly to ridesharing, carpooling, and
rental vehicle network options to get around. Vehicle
rental networks are rental car businesses that arrange
or execute personal passenger vehicle rentals through
a network of individual private vehicle owners and are
becoming a common alternative to traditional rental
car options.
HB 102 adds a definition for the new service of
providing private vehicle rental programs, including
these services into existing statutes that regulate
car rental providers to reflect changes in how people
secure transport in Alaska. It also extends the same
laws and regulations which apply to rental car
companies to private vehicle rental networks,
including the payment of the State's Vehicle Rental
Tax. Therefore, HB 102 brings equity to the rental
industry for motor vehicles and will generate
additional income for the State's general fund as the
private vehicle rental network industry continues to
grow and diversify in the Alaskan economy.
Please join me in supporting House Bill 102 to bring
our statutes up to date and to incorporate this new
industry into the existing language governing vehicle
rentals in Alaska.
Representative Wool compared a peer-to-peer auto rental to
Airbnb. He detailed that if an individual wanted to rent
out their car, they listed it on a platform such as Turo
and paid a fee to Turo. An interested party could rent the
car through the platform. He pointed out that Airbnb paid a
bed tax in the municipalities that they operated. The bill
indicated to the platform companies that the car renter
must pay the state vehicle rental tax and any municipal
tax, if applicable, and aligned peer-to-peer car rental
companies with traditional vehicle rental companies.
3:09:36 PM
ASHLEY CARRICK, STAFF, REPRESENTATIVE ADAM WOOL, reviewed
the sectional analysis:
This bill amends Alaska Statutes 43 and 45.
Section 1: States that this act may be known as the
"Vehicle Rental Modernization Act."
Section 2: Specifies that Alaska's existing Vehicle
Rental Tax should be paid by the individual who either
provides the leased or rented vehicle, or by a vehicle
rental network.
Section 3: References the definitions for "Vehicle
Rental Business" and "Vehicle Rental Network" in
Section 7.
Section 4: A "Vehicle Rental Network" is a business
that arranges or executes personal passenger vehicle
or recreational vehicle rentals, and which is subject
to laws which govern vehicle rental businesses,
including AS 19.75.915, AS 28.10.375, AS 28.35.320, AS
45.32, and AS 45.45.425-459. Electronic notices or
disclosures apply to vehicle rental networks.
Section 5: Adjusts language to specify that vehicle
rental businesses and individual owners leasing or
renting their vehicles should disclose all costs,
fees, airport-costs, government taxes, and government
surcharges applied to consumers.
Section 6: Adjusts language to specify that vehicle
rental business may only charge renters or consumers
fees relevant to recovering actual costs of operating
and must adjust costs based on the actual costs of
operation.
Section 7: Deletes existing definitions of "car" and
"rental car business." Adds new definitions to include
passenger vehicles, personal vehicles, and
recreational vehicles, vehicle rental businesses and
vehicle rental networks. A vehicle rental business can
be either a direct renter of vehicles or a vehicle
rental network.
3:11:49 PM
Representative LeBon asked if a Bed and Breakfast operator
offering a peer-to-peer car rental not going through a
platform could carry out the transactions on the quiet
and not be subject to taxes. Ms. Carrick responded in the
negative. She related that the individual would be liable
for state and local taxes, but it would be difficult to
collect it. Representative LeBon asked if there were
individuals on Turo that had multiple vehicles and were
essentially running a business.
Representative Wool answered that the number of vehicles
rented through Turo in Alaska was unknown. Turo refused to
release the information to the state. He relayed that the
State of Alaska was currently involved in a lawsuit to get
Turo to release information about the individuals operating
through Turo. He shared from personal experience that he
knew someone who operated an Airbnb and ran a multiple
vehicle rental through Turo. He was also aware of many
people who purchased cars for the sole purpose of renting
them out on Turo. He offered that the Turo rentals are
often more expensive than the rental car companies' rates.
3:14:45 PM
In response to a question by, Representative Knopp,
Representative Wool indicated that Turo was not happy with
the idea of paying the tax and other technology companies
along with Turo were in opposition to the bill. The
platforms wanted to negotiate and pay lower tax rates than
entities such as Uber and Lyft or through traditional
rental car companies. He recounted that Uber, Lyft, and
Airbnb had to pay the full amount of applicable taxes. He
did not understand the logic for a discounted tax but
acknowledged that the car rental platforms made the
argument for lower taxes.
3:17:18 PM
Representative Carpenter pointed to page 1, lines 11 and 12
of the bill and read, person who provides the leased or
rented vehicle; vehicle rental business. He asked if the
legislation would apply to a mother and father who rent
their vehicle to their child. Representative Wool responded
that it was not his intent for family members to have to
pay a tax. He reiterated that the intent of the bill was
strictly meant for peer-to peer rental platforms. He
emphasized that people in the car rental business should
pay the tax. He revealed that the state collected over $10
million in vehicle rental tax in the prior year and
expected the number would be higher if peer-to-peer rentals
were included. He reminded the committee that a rental
transaction between two individuals was still liable for
the tax. Representative Carpenter wanted to avoid any
unintended consequences of a non-business owing taxes.
Ms. Carrick interjected that if someone wanted to start
their own traditional car rental business with a small
number of cars the bill would capture that type of business
as well. The bill included any type of car rental business
that was a source of income. She recounted testimony in the
prior year in the House Labor and Commerce Committee from
Brandon Spanos [Deputy Director, Tax Division, Department
of Revenue] that it would be unlikely that individuals
would do proper reporting to alert the department that
taxes were owed making enforcement difficult.
3:21:11 PM
Representative Josephson referred to his notes from the
previous hearing of the bill. He noted testimony that over
700 peer-to-peer cars were being rented. He asked for an
estimate of the amount of income the state was not
collecting. Representative Wool responded that presently,
Turo would not release information and without the data it
was difficult to calculate. He was unaware of the 700
figure. He asked Ms. Carrick if she remembered the
testimony.
Ms. Carrick recalled that in the prior year a testifier
from Turo had roughly estimated the number of owners
renting vehicles at 700. She emphasized that the Turo
testifier stressed that his number was a very rough
estimate.
Co-Chair Johnston referenced Representative Wool's account
of a person who was running a car rental business through
Turo. She wondered if the individual received a vehicle
manufacturer's discount as well. Representative Wool did
not know the answer to the question. He guessed that the
purchases were random. Co-Chair Johnston commented that one
platform that was highly likely to pop up in Alaska was the
popular scooter rentals. She wondered how it would work
with HB 102. Representative Wool replied that he was
familiar with the scooter rental. He voiced that it was a
vehicle rental platform and wanted to see it under the HB
102 umbrella as a vehicle rental. He did not believe the
state should forego potential revenue especially when the
traditional vehicle rental companies were collecting it.
Co-Chair Johnston reviewed the agenda for the following
day.
HB 102 was HEARD and HELD in committee for further
consideration.