Legislature(2021 - 2022)BELTZ 105 (TSBldg)
04/26/2022 01:30 PM Senate TRANSPORTATION
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| Audio | Topic |
|---|---|
| Start | |
| HB90 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 166 | TELECONFERENCED | |
| += | HB 90 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
HB 90-VEHICLE RENTALS & VEHICLE RENTAL NETWORKS
1:35:31 PM
CHAIR MYERS announced the consideration of HOUSE BILL NO. 90
am(efd fld) "An Act relating to rental vehicles; relating to
vehicle rental networks; relating to vehicle rental taxes; and
relating to vehicle rental fees."
[HB 90 am(efd fld) was before the committee.]
[HB 90 was previously heard on 4/7/22. Public testimony was
opened and closed.]
1:35:41 PM
SENATOR SHOWER moved to adopt the Senate committee substitute
(SCS) for HB 90, work order 32-LS0396\B, as the working
document.
1:35:47 PM
CHAIR MYERS objected for discussion purposes.
1:36:08 PM
MICHAELA ANDERSON, Staff, Senator Robert Myers, Alaska State
Legislature, Juneau, Alaska, explained the summary of changes
between Version A and Version B of HB 90 on behalf of the
committee. She stated that there was a title change that added
the collection of a municipal sales tax for certain vehicle
rentals and an effective date.
1:36:32 PM
MS. ANDERSON reviewed the changes in the Senate Committee
Substitute (SCS) for HB 90(TRA), Version B, beginning with the
changes in Section 2.
[Original punctuation provided.]
Changes the rate of passenger vehicle rental taxes
from 10 percent to five percent for the lease or
rental of a passenger vehicle. Makes conforming
language changes by removing disused vehicle rental
individuals term.
MS. ANDERSON reviewed the changes in Section 3.
Removes and replaces vehicle rental business and
vehicle rental individual with a vehicle rental
network company. Clarifies the liability for payment
of vehicle rental taxes to include both a vehicle
rental network company or a person who provides the
lease or rented vehicle through a vehicle rental
network.
1:37:12 PM
MS. ANDERSON reviewed the changes in Section 5.
Replaces section five amendment of AS 43.52.099 and
inserts new section five that amends AS 43.52.090.
Establishes that a passenger vehicle rental tax does
not apply to a person who rents three or fewer
vehicles in the state.
MS. ANDERSON reviewed the changes in Section 6.
Adds the collection of a municipal sales tax for
vehicle rentals if the municipality imposes a sales
tax. Vehicle rental network company will collect and
pay the municipal sales tax on behalf of a vehicle
rental business. Makes conforming language changes and
removes obligation for vehicle rental individual
regarding electronic notice and disclosure.
MS. ANDERSON reviewed the changes in Sections 7 and 8.
Makes conforming language changes removing disused
vehicle rental individuals terms.
MS. ANDERSON reviewed the changes in Section 9.
Makes conforming language changes to the definitions
of vehicle rental business and removes the definition
of vehicle rental individual.
MS. ANDERSON reviewed the changes in Section 10.
st
Adds an effective date of January 1, 2023 for
sections 1-5 of the act.
1:38:31 PM
SENATOR MICCICHE asked whether Version B changed all vehicle tax
rates from 10 percent to five percent.
MS. ANDERSON answered yes.
1:38:56 PM
SENATOR KIEHL asked whether the vehicle rental taxes for
existing businesses not using the network platform would be
halved in Version B.
CHAIR MYERS answered yes. He explained that Version B would
reduce the Vehicle Rental Tax from 10 percent to 5 percent for
car rental agencies such as Enterprise, Avis, National, or
Alamo.
SENATOR KIEHL noted that the exception would be for Turo or
peer-to-peer network platform rentals who rent three or fewer
vehicles to customers on the platform.
CHAIR MYERS agreed that peer-to-peer platforms renting three or
fewer cars would not be subject to a vehicle rental tax.
1:39:41 PM
MS. ANDERSON pointed out that municipalities could collect
taxes, so the Municipality of Anchorage could collect its 8
percent Vehicle Rental Tax and the City of Juneau could collect
its five percent tax. The reduction would apply solely to the
state rate.
1:39:55 PM
CHAIR MYERS removed his objection.
SENATOR MICCICHE objected.
1:40:05 PM
At ease
1:42:41 PM
CHAIR MYERS reconvened the meeting.
1:42:49 PM
SENATOR MICCICHE removed his objection.
CHAIR MYERS found no further objection, and Version B was before
the committee.
CHAIR MYERS solicited amendments.
1:43:25 PM
SENATOR KIEHL moved to adopt Conceptual Amendment 1 to HB 90,
which read:
Offered in the Senate
To: HB 90 ver. B
Pg. 1 ln 10:
Delete "five"
Insert "ten"
Page 2, ln. 13-15:
Delete all material.
1:43:29 PM
CHAIR MYERS objected for discussion purposes.
1:43:33 PM
SENATOR KIEHL stated that Version B made some good changes by
clarifying who remits the tax and ensuring that municipalities
are covered. He explained that Conceptual Amendment 1 uses the
existing 10 percent tax rate and applies it to all vehicle
rentals in the state. He characterized it as creating a level
playing field. It does not matter if the company is a national
company that operates in Alaska, an Alaskan who owns a
franchise, an Alaskan who owns a couple of dozen cars available
for rent at the airport or dock, if a person lists 20 cars using
a peer-to-peer platform such as Turo, or if a person only lists
one vehicle rental. There is no government distortion of the
market since the vehicle rental rate is 10 percent no matter the
business model used.
1:44:41 PM
SENATOR MICCICHE moved to adopt Conceptual Amendment 1 to
Conceptual Amendment 1.
1:44:47 PM
CHAIR MYERS objected for discussion purposes.
1:44:51 PM
SENATOR MICCICHE stated Conceptual Amendment 1 to Conceptual
Amendment 1 would eliminate the second part of Conceptual
Amendment 1 on page 2, lines 13-15 of HB 90, which read.
(b) The tax imposed in AS 43.52.020 does not apply to
a person who rents three or fewer vehicles in the
state.
1:45:01 PM
SENATOR MICCICHE explained Conceptual Amendment 1 to Conceptual
Amendment 1 would mean that someone renting three or fewer
vehicles in the state would not pay the tax. Still, it would
retain the ten percent vehicle rental tax contained in the first
part of Conceptual Amendment 1.
1:45:14 PM
SENATOR KIEHL objected to Conceptual Amendment 1 to Conceptual
Amendment 1.
1:45:38 PM
CHAIR MYERS removed his objection.
1:45:41 PM
SENATOR KIEHL maintained his objection.
1:45:50 PM
A roll call vote was taken. Senators Shower, Micciche, and Myers
voted in favor of Conceptual Amendment 1 to Conceptual Amendment
1, and Senator Kiehl voted against it. Therefore, Conceptual
Amendment 1 to Conceptual Amendment 1 was adopted by a 3:1 vote.
1:46:28 PM
CHAIR MYERS stated that Conceptual Amendment 1, as amended, was
before the committee.
1:46:35 PM
SENATOR KIEHL offered his belief that Conceptual Amendment 1, as
amended, was still a good amendment.
1:46:49 PM
SENATOR MICCICHE stated his belief that Alaskans pay for
everything. He offered his view that reducing the Alaska Vehicle
Rental Tax from 10 to 5 percent would also reduce fundings that
pay for highways throughout Alaska. He characterized it as anti-
resident. He indicated that Version B does not increase taxes on
Alaskans, but effectively would decrease the taxes on primarily
out-of-state residents who rent vehicles in Alaska. He stated
that Conceptual Amendment 1, as amended would increase the
Alaska Vehicle Rental Tax to 10 percent, which is the current
rate. This would allow visitors to pay for some of the services
it receives.
1:47:41 PM
CHAIR MYERS removed his objection; he found no further objection
and Conceptual Amendment 1, as amended, was adopted.
1:47:57 PM
SENATOR MICCICHE stated he would like a moment to write an
amendment to create a tax rate for peer-to-peer network
vehicles.
1:48:23 PM
At ease
1:54:24 PM
CHAIR MYERS reconvened the meeting
1:54:29 PM
SENATOR MICCICHE moved to adopt Conceptual Amendment 2.
1:54:31 PM
CHAIR MYERS objected for discussion purposes.
1:54:33 PM
SENATOR MICCICHE stated that the committee discussed a level
playing field, but the reality is that the larger companies
obtain breaks on insurance and when purchasing vehicles. He said
he would like to address mom-and-pop peer-to-peer businesses
that offer rental vehicles by providing them with a lower tax
rate.
SENATOR MICCICHE stated Conceptual Amendment 2:
On page 1 line 10, after, is, insert ": 1. 10 percent
of the total fees and costs charged for the lease or
rental of a passenger vehicle by a rental business, or
2. Five percent of the total fees and costs charged
for the lease or rental of a passenger vehicle by a
vehicle rental individual.
1:56:04 PM
SENATOR SHOWER asked him to clarify the intent in Section 5
[page 2, lines 13-15] would cover the real mom-and-pop
businesses.
1:56:25 PM
SENATOR MICCICHE explained that Section 5 states that the tax
proposed in AS 43.52.020, which the committee proposes to amend,
does not apply to a person who rents three or fewer vehicles in
the state.
SENATOR SHOWER thanked him for stating the intent for the
record.
1:56:49 PM
SENATOR KIEHL said that "vehicle rental individual" is not
defined in Version B. The definition in the previous version,
Version 32-LS0396\A.A read:
(8) "vehicle rental individual" means a person who
(A) engages in the business of renting a
vehicle in the state or, through a vehicle
rental network, arranging or executing a
vehicle rental in the state; and
(B) rents three or fewer vehicles in the state
SENATOR KIEHL asked how "vehicle rental individual" would be
defined.
1:57:26 PM
SENATOR SHOWER asked whether page 4, paragraphs (7) and (8)
would cover it.
1:57:50 PM
CHAIR MYERS stated that a definition for "vehicle rental
individual" was in the prior version of HB 90, but it is not in
the current committee substitute, Version B. He suggested that
the committee would need to define vehicle rental individual.
1:58:05 PM
SENATOR SHOWER stated that the definition [on page 7, lines 10-
12, paragraph (7),] vehicle rental business" means a person who
engages in the business of renting a vehicle in the state or,
through a vehicle rental network, arranging or executing a
vehicle rental in the state.
1:58:14 PM
CHAIR MYERS stated that the definition would need to change.
1:58:21 PM
SENATOR MICCICHE stated that he would view Senator Kiehl's
suggested language on page 4, lines 18-21 of the previous
version as a friendly amendment.
1:59:11 PM
At ease
2:03:32 PM
CHAIR MYERS reconvened the meeting
2:03:43 PM
SENATOR MICCICHE moved Conceptual Amendment 1 to Conceptual
Amendment 2 to bring the language on page 4, lines 18-21 of the
previous version, Version, 32-LS0396\A.A into Version B as
paragraph (8), which read:
(8) "vehicle rental individual" means a person who
(A) engages in the business of renting a
vehicle in the state or, through a vehicle
rental network, arranging or executing a
vehicle rental in the state; and
(B) rents three or fewer vehicles in the state
SENATOR MICCICHE stated that the definition of "vehicle rental
network" would be renumbered as paragraph (9).
2:04:16 PM
SENATOR MICCICHE explained Conceptual Amendment 1 to Conceptual
Amendment 2. He stated that the conceptual amendment would
indicate that the traditional brick and mortar businesses would
be subject to a 10 percent vehicle rental tax, vehicle rental
individuals would be subject to a five percent vehicle rental
tax, whether they use an or not, and individuals who have
three or fewer vehicles, would not be subject to any vehicle
rental tax.
2:04:40 PM
CHAIR MYERS objected for discussion purposes.
2:04:44 PM
SENATOR KIEHL suggested that the person includes corporations.
He stated that 5 percent would apply to natural persons or
anyone who uses the App.
SENATOR MICCICHE agreed that is correct.
2:05:20 PM
CHAIR MYERS withdrew his objection.
CHAIR MYERS stated that Conceptual Amendment 1 to Conceptual
Amendment 2 was adopted. Conceptual Amendment 2, as amended, was
now before the committee.
2:05:32 PM
SENATOR KIEHL said he understood the sponsor's intent and goal.
He related his understanding that Conceptual Amendment 2, as
amended, would treat the mom-pop renting a couple of dozen cars
at the 10 percent level as though they were a car rental agency
such as Avis, National, or Hertz. However, if an individual like
himself wanted to start renting cars, he could rent up to three
cars in his name, three cars in his wife's name, and three cars
in his 20-year-old daughter's name, avoiding paying any vehicle
rental tax. He offered his belief that it causes problems to try
to tilt an excise tax in this manner. He said he would object to
the principle.
2:07:21 PM
SENATOR MICCICHE related that in his community, the way brick
and mortar cars are funded, the companies sell off their
existing vehicles to purchase new ones. When the pandemic hit,
these companies sold off the bulk of their vehicles, making no
vehicles available. He stated that his community depended on
this business model. He offered his view that there is room in
the marketplace for both types, noting that the traditional
model depends on selling vehicles when difficult things happen,
whereas the other is not. He offered his view that Conceptual
Amendment 2, as amended, will create a level playing field.
2:08:46 PM
CHAIR MYERS withdrew his objection.
2:08:52 PM
SENATOR KIEHL objected.
2:08:55 PM
A roll call vote was taken. Senators Micciche, Shower, and Myers
voted in favor of Conceptual Amendment 2, as amended, and
Senator Kiehl voted against it. Therefore, Conceptual Amendment
2, as amended, was adopted by a 3:1 vote.
2:09:21 PM
CHAIR MYERS solicited other amendments, and there were none.
2:09:32 PM
SENATOR SHOWER moved to report the Senate Committee Substitute
(SCS) for HB 90, work order, 32-LS0396\B, as amended, from
committee with individual recommendations and attached fiscal
note(s).
CHAIR MYERS found no further objection, and SCS HB 90(TRA) was
reported from the Senate Transportation Standing Committee.
2:09:54 PM
CHAIR MYERS stated that Legislative Legal Services is directed
to make any technical and conforming changes to the suggested
language or bill title changes to accomplish the intent of any
conceptual amendments to the bill.
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