Legislature(2003 - 2004)
03/09/2004 09:03 AM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL NO. 347
"An Act exempting taxicabs from the passenger vehicle rental
tax; and providing for an effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
Co-Chair Wilken stated that this legislation would exempt taxicabs
from the ten percent vehicle tax imposed on the lease and rental of
passenger vehicles. The bill, he continued, would also exempt
taxicabs from the definition of what constitutes a passenger
vehicle.
SUE STANCLIFF, Staff to Representative Pete Kott, the bill's
sponsor, concurred with Co-Chair Wilken's analysis of the bill.
Amendment #1: This amendment changes the bill's title to read as
follows.
"An Act exempting taxicabs and certain other motor vehicles
from the passenger vehicle rental tax; and providing for an
effective date."
In addition, the amendment deletes, in Section 1, subsection
(2)(E), the word "or" on page two, line two and inserts language on
page two, line three following the word "taxicab." This language
would read as follows.
(E) a taxicab, [or]
(f) a vehicle that is used exclusively for the hauling or
delivery of cargo;
Furthermore, the amendment inserts new language in Sec. 2, page
two, line seven following "taxicabs" as follows.
IMPLEMENTATION. The Department of Revenue shall refund any tax
collected and remitted to the department under AS 43.52.010 -
43.52.099 on the rental of taxicabs and other rentals that are
exempt from the passenger vehicle rental tax because of the
amendments to AS 43.52.099(2) made by sec.1 of this Act for
rentals made on or after January 1, 2004,…
New Text Underlined [DELETED TEXT BRACKETED]
Co-Chair Green moved for the adoption of Amendment #1.
Co-Chair Wilken objected for purposes of an explanation.
Co-Chair Green explained that this amendment would expand the
bill's title to include "and certain other vehicles," and would,
therefore serve to exclude certain vehicles used for the hauling
and delivery of cargo. She noted that vehicles exceeding 26,000
pounds are exempt from the tax and this amendment, she stated,
would expand that exemption to include such vehicles as U-Haul
moving vans that exceed 10,000 pounds. She noted that the
Municipality of Anchorage already exempts these vehicles from the
tax. She noted that this issue could either be addressed locally as
Anchorage has done or via this amendment. She noted that there
would be minimum fiscal impact incurred by this exemption.
Ms. Stancliff stated that the bill's sponsor has no objection to
the amendment. Continuing, she agreed that while the issue could be
addressed locally, amending the legislation would be "the simplest
approach." She stated that it was not the intent of the original
bill to negatively impact small businesses.
LANDA BAILY, Special Assistant, Office of the Commissioner,
Department of Revenue, stated that in addition to discussing the
amendment with the both the bill and the amendment's sponsors, she
had conferred with Dan Dickinson, Director, Tax Division,
Department of Revenue. Mr. Dickinson, she shared, stated that this
amendment mirrors the Municipality of Anchorage's exemption
language, and would not present any administrative issues to the
Tax Division.
Co-Chair Wilken removed his objection.
Senator Bunde objected, as he declared that taxes are imposed to
raise money. Therefore, he continued, exempting anyone from a tax
is contrary to the desired affect, particularly in light of the
State's current fiscal direction.
A roll call was taken on the motion.
IN FAVOR: Senator B. Stevens, Co-Chair Green, Senator Olson,
Senator Hoffman, Senator Dyson, and Co-Chair Wilken
OPPOSED: Senator Bunde
The motion PASSED (6 - 1)
Amendment #1 was ADOPTED.
JOHN NORRIS, President, U-Haul Company of Alaska, testified via
teleconference from an offnet site on behalf of the 54 U-Haul
locations in the State. He urged that the amendment be approved as
he noted that the ten percent tax as originally presented was
intended to apply to out-of-state tourists for any passenger car
rental rather than to Alaska residents using such things as rental
trucks. However, he stated that the original bill only exempted
vehicles in excess of 26,000 pounds. He stated that a ten percent
tax on truck rentals would present a hardship for citizens and
businesses.
Senator Bunde pointed out that the passenger car rental tax applies
to everyone renting a car, including Alaskan residents.
MICHAEL BELL, Representative, Alaska Trucking Association,
testified via teleconference from an offnet site and voiced support
for the amendment as he noted, "the vast majority" of trucks used
to transport and deliver goods in cities, such as grocery delivery
trucks, weight less than 26,000 pounds. He stated that were a
business's truck to breakdown, it would be required to rent a
replacement and be subject to the ten percent tax. He stated that
this tax would present a hardship to the company as in most cases
it would be unable to pass the burden of the tax on to the end
user, as rental surcharges are not usually included in contracts.
Co-Chair Wilken stated that this bill would be HELD in Committee.
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