Legislature(2011 - 2012)HOUSE FINANCE 519
04/12/2012 09:00 AM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB137 | |
| SB19 | |
| SB135 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 137 | TELECONFERENCED | |
| + | SB 19 | TELECONFERENCED | |
| + | SB 135 | TELECONFERENCED | |
| += | SB 23 | TELECONFERENCED | |
| += | SB 119 | TELECONFERENCED | |
| + | SCR 24 | TELECONFERENCED | |
| + | SB 160 | TELECONFERENCED | |
| + | TELECONFERENCED |
CS FOR SENATE BILL NO. 19(FIN)
"An Act specifying the vehicle rental tax for
motorcycles and motor-driven cycles; and providing for
an effective date."
5:33:31 PM
Vice-Chair Fairclough MOVED to ADOPT the proposed committee
substitute for CSSB 19, Work Draft 27-LS0157\B (Luckhaupt,
4/10/12) as a working document.
Co-Chair Stoltze OBJECTED for the purpose of discussion.
JOE MICHEL, STAFF, REPRESENTATIVE BILL STOLTZE, remarked on
two major changes in the House CS that incorporated SB 26
into the legislation. Section 1 was added to the CS;
Section 1 continued to page 2, line 21. On page 3, line 31,
Section 7 was added. On page 4, Sections 8 and 9 were
added.
Co-Chair Stoltze WITHDREW his OBJECTION. There being NO
further OBJECTION, Work Draft 27-LS0157\B was ADOPTED.
KRISTEN PETERSON, STAFF, SENATOR HOLLIS FRENCH, extended
the sponsor's apologies for being unable to attend in
person. She explained that motorcycles and motor driven
cycles were currently subject to the Passenger Vehicle
Rental Tax, which was 10 percent of the total fees and
costs that were charged for the rental of a passenger
vehicle; the tax was found in AS 43.52.010 and 43.52.020.
The CS for SB 19 would reduce the tax on motorcycles and
motor driven cycles to 3 percent, bringing it in line with
the tax on recreation vehicles, motorhomes, and campers
that was located in AS 43.53.030 and 43.53.040. She offered
that in 2003, the Alaska Legislature had passed the Vehicle
Rental Tax on passenger vehicles without having discussion
on the motorcycle rental businesses. She observed that
making an exception for a seasonal rental business had
already been done when the Vehicle Rental Tax was first
imposed, as motorhomes were given a lower rate of 3
percent. In 2008, the Department of Revenue (DOR)
discovered the existence of motorcycle rental businesses in
Alaska and notified the businesses that the 10 percent
rental tax would be collected. She related that with
Alaska's short summers and the cost of winter storage, the
businesses in question had found it more difficult to make
a profit when a 10 percent tax was added to the total. She
concluded that the bill was designed to help small Alaskan
businesses that had clients who were independent travelers,
which visited other small businesses in Alaska. The bill
had an immediate effective date to coincide with the
upcoming summer tourist season.
GENEVIEVE WOJTUSIK, STAFF, SENATOR LESIL MCGUIRE, noted
that the Senator's office was hoping to combine SB 26 with
SB 19. She explained that Section 1 of the new CS set
special registration fees for alternative fuel vehicles;
the legislation would impose a $20 biannual registration
fee for electric, alternative fuel, or compressed natural
gas (CNG) vehicles, rather than requiring the normal
registration fees. The sunset date of the SB 26 portion of
the new CS was in 2015 and was found in Section 7 of the
legislation. She concluded that the legislation represented
a trial program and that although the state did not have
many electric vehicles, the sponsor wanted to reward the
businesses that did have them.
5:39:14 PM
Representative Doogan inquired if both the sponsors of the
new CS were happy with the changes to the legislation. Ms.
Peterson responded in the affirmative.
Vice-Chair Fairclough discussed a fiscal note from DOR and
a fiscal note from the Department of Administration. She
pointed to the DOR fiscal note and mentioned that the
note's "change in revenues" section showed an expected
decrease of $8,400 each year from FY 13 through FY 18
NANCY HULL, OWNER, ALASKA MOTORCYCLE ADVENTURES, PALMER
(via teleconference), supported the bill and related that
her company was in its 19th summer of renting motorcycles
in Alaska. She indicated that there were unintended
consequences to the present tax and that her business had a
very limited operating season of about 90 days. She stated
that her average rental rate was $200 per day, per
motorcycle and that a customer renting for 10 days resulted
in a tax of $200. She explained that the current tax became
very punitive when a couple or a father and son rented two
motorcycles and were taxed $400 for 10 days of rental;
furthermore, there was no cap on the amount that could be
taxed. She stated that in order offset the high vehicle
rental taxes, her customers were choosing to rent for fewer
days or travel to different locations outside of Alaska.
She shared that her customers were able to get to the very
remote locations of Alaska because the vehicles that her
business used were capable of getting there. She offered
that because her customers were not in an RV, they required
services such as hotel rooms, meals, etc. She indicated a
preference to eliminate the tax altogether, rather than
reducing it to 3 percent and stated that the tax collected
from the state's four existing rental businesses would only
represent about $15,000 per year and was a very small
amount.["Four existing rental businesses" was made in
reference to seasonal rental businesses that rented
motorcycles.] She mentioned that the Harley Davidson rental
business in Anchorage was not expected rent after 2012 and
that Alaska would only have three seasonal motorcycles
businesses 2013. She questioned whether it was worth the
state's effort for DOR to track three or four businesses,
given the small amount of taxes that would be collected;
she reiterated that she would like the tax repealed.
Co-Chair Stoltze CLOSED public testimony.
5:46:17 PM
AT EASE
5:47:03 PM
RECONVENED
Co-Chair Stoltze communicated that the intent of the
committee was to repeal the 3 percent tax that was in the
bill.
Representative Costello offered a Conceptual Amendment on
behalf of the House Finance Committee to repeal the 3
percent rental tax that was mentioned in the bill.
Representative Gara clarified that the Conceptual Amendment
was repealing the 3 percent tax on motorcycles, not
recreational vehicles.
Co-Chair Stoltze stated that the committee's intent was to
repeal the 3 percent rental tax on motorcycles, but that
the bill would be brought back at a later date in order to
make sure the changes were done appropriately.
Ms. Peterson commented that the original version bill,
which excluded the motor cycle rental businesses, would
amend AS 43.52.099; she pointed out that this statute
housed the exceptions to the Alaska Vehicle Rental Tax. Co-
Chair Stoltze responded that intent of the committee was
made clear and that the changes would be done right.
5:49:29 PM
CSSB 19(FIN) was HEARD and HELD in committee for further
consideration.
5:49:33 PM
AT EASE
5:50:40 PM
RECONVENED