02/02/2022 09:00 AM House FINANCE

HOUSE BILL NO. 90                                                                                                             
                                                                                                                                
     "An  Act  relating  to  rental  vehicles;  relating  to                                                                    
     vehicle  rental  networks;  relating to  liability  for                                                                    
     vehicle rental  taxes; and  providing for  an effective                                                                    
     date."                                                                                                                     
                                                                                                                                
9:25:16 AM                                                                                                                    
                                                                                                                                
Co-Chair Foster reported that the  bill was previously heard                                                                    
on May 13, 2021.                                                                                                                
                                                                                                                                
REPRESENTATIVE  ADAM WOOL,  SPONSOR,  indicated  that HB  90                                                                    
applied the existing vehicle rental  tax that Alaska already                                                                    
had in place  to peer-to-peer network rentals  like Turo. He                                                                    
reiterated  that  there was  already  a  10 percent  tax  on                                                                    
rental  cars in  the state  that  should be  applied to  the                                                                    
peer-to-peer  rentals. However,  the state  did not  enforce                                                                    
it. He  detailed that the  state had lacked  the information                                                                    
to  collect the  tax  and the  Department  of Revenue  (DOR)                                                                    
asked Turo  for a list of  names of drivers and  the company                                                                    
did not  comply. The tax  would apply to the  person renting                                                                    
the car  through the app and  Turo would pay the  tax to the                                                                    
state. He emphasized that similar  to renting a car though a                                                                    
company like  AVIS, the tax  was paid by the  person renting                                                                    
the car  through the app  and the owner  of the car  did not                                                                    
pay the  tax. He noted  that through the pandemic,  Turo use                                                                    
soared due to  the scarcity of rental cars.  He guessed that                                                                    
the  tax  would  raise   several million   dollars  for  the                                                                    
state. He analogized  Airbnb that  paid a bed tax, which was                                                                    
a similar premise as the peer-to-peer car rental networks.                                                                      
                                                                                                                                
Co-Chair Foster reviewed the testifiers available online.                                                                       
                                                                                                                                
Representative Wool  also pointed out that  the municipality                                                                    
of  Anchorage  in  addition  the states   tax  had  its  own                                                                    
municipal tax  for vehicle rentals.  Anchorage passed  a law                                                                    
requiring the peer-to-peer networks to pay the city tax.                                                                        
                                                                                                                                
9:29:32 AM                                                                                                                    
                                                                                                                                
Representative Thompson  reported that  Recreational Vehicle                                                                    
(RV)  rentals only  required a  3 percent  tax. He  asked if                                                                    
Turo had engaged in any  discussions regarding the disparity                                                                    
in the  tax percentages or  offered to compromise  between 3                                                                    
percent and 10 percent.                                                                                                         
                                                                                                                                
Representative Wool  relayed that the  3 percent tax  RV was                                                                    
already in  state law.  He did not  want to  change existing                                                                    
statute.  He commented  that if  someone rented  an RV  from                                                                    
Turo they would pay the 3  percent tax. He was uncertain why                                                                    
there were  different rates for  the different  vehicles. He                                                                    
noted that the  bill did not attempt to  change the existing                                                                    
tax rates.  The peer-to-peer tax  rate would be the  same as                                                                    
what existed  in state law.  He was merely wanting  to apply                                                                    
the  car  rental  tax to  the  peer-to-peer  network  model.                                                                    
Representative  Thompson asked  whether the  municipality of                                                                    
Anchorage collected 3 percent  on RV rentals. Representative                                                                    
Wool acknowledged that the Anchorage  vehicle rental tax was                                                                    
8  percent  and  did  not know  what  the  municipality  did                                                                    
regarding taxing  RV rentals. He  reiterated that  the state                                                                    
tax for RV rentals was 3  percent, and a brick and mortar RV                                                                    
rental agency was accountable for the tax.                                                                                      
                                                                                                                                
9:33:03 AM                                                                                                                    
                                                                                                                                
Vice-Chair Ortiz  asked if it  was safe  to say if  the bill                                                                    
were  to pass  it would  apply to  all peer-to-peer  vehicle                                                                    
rental  networks.   It  would   not  be  limited   to  Turo.                                                                    
Representative Wool  answered in  the affirmative.  He noted                                                                    
that  other  peer-to-peer  vehicle rental  networks  existed                                                                    
besides Turo.                                                                                                                   
                                                                                                                                
9:33:55 AM                                                                                                                    
                                                                                                                                
Co-Chair  Merrick declared  a conflict  of  interest as  her                                                                    
family rents out a car as a Turo vehicle.                                                                                       
                                                                                                                                
9:34:35 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:35:12 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair  Foster   did  not  hear  any   objections  to  her                                                                    
conflict.                                                                                                                       
                                                                                                                                
                                                                                                                                
9:35:28 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:36:41 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair Foster asked  for a motion to move the  bill out of                                                                    
committee.                                                                                                                      
                                                                                                                                
Vice-Chair Ortiz requested an at ease.                                                                                          
                                                                                                                                
9:36:41 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:37:35 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Vice-Chair  Ortiz MOVED  to report  HB 90  out of  Committee                                                                    
with individual recommendations  and the accompanying fiscal                                                                    
notes.                                                                                                                          
                                                                                                                                
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
HB  90  was REPORTED  out  of  committee  with a  "do  pass"                                                                    
recommendation  and  with a  new  zero  fiscal note  by  the                                                                    
Department of  Administration and  a new fiscal  impact note                                                                    
by the Department of Revenue.