Legislature(2005 - 2006)HOUSE FINANCE 519
05/03/2005 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB186 | |
| SB174 | |
| SB133 | |
| SB139 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 186 | TELECONFERENCED | |
| + | SB 133 | TELECONFERENCED | |
| + | SB 174 | TELECONFERENCED | |
| += | SB 139 | TELECONFERENCED | |
| + | TELECONFERENCED |
SENATE BILL NO. 174
An Act excluding certain trucks from the definition of
'passenger vehicle' for purposes of the passenger
vehicle rental tax; and providing for an effective
date.
SENATOR CHARLIE HUGGINS, SPONSOR, noted that SB 174 had been
introduced to correct an unintended consequence of
legislation passed in 2003. At that time, the Legislature
passed HB 271 as a tourism-based tax on passenger rental
cars and recreational vehicles. The purpose was to tax
visitors using the road system, not local citizens. HB 271
has negatively impacted:
* Alaska citizens needing to move,
* Local independent outlets, and
* Cnsumer truck rental business.
Senator Huggins added that the Department of Revenue has
assessed the tourism-based tax on all rental vehicles,
including trucks less than 26,000 pounds. Interpretation of
the law has resulted in a 10% tax applied to businesses and
citizens renting trucks. The 10% State tax, along with the
local municipal and city taxes, add considerably to the
total rental fee.
In 2004, HB 347 was introduced to correct the unintended
consequence created by HB 271. It provided an exemption for
taxicabs. That corrective legislation was signed into law.
SB 174 ensures that the tax applies more specifically to the
intended target of visitors renting passenger vehicles and
recreational vehicles, rather than the unintended target of
Alaska businesses and citizens who rely on truck rentals for
the continued flow of commerce and movement of household
goods.
2:37:41 PM
Representative Weyhrauch commented that the intent was not
to assess a tax charge on commercial vehicles. He
questioned if it would reign-in the Department's
interpretation of the tax. Senator Huggins explained there
was no ill intended approach on the Department of Revenue.
The target of HB 271 was a not "self-move" type vehicle and
that SB 174 would correct it.
Representative Hawker commented on passage of the previous
legislation and the impact SB 174 would have. Co-Chair
Meyer agreed with the assessment made by Representative
Hawker and that the original intent was not to tax U-Haul
trucks.
2:40:08 PM
JOHN NORRIS, PRESIDENT, U-HAUL COMPANY OF ALASKA, ANCHORAGE,
spoke in support of the proposed legislation. He pointed
out that HB 271 has impacted Alaska citizens needing to
move. The consumer does have other options for moving that
are not taxed. He reiterated the history and the impacts of
the previous legislation. He acknowledged that SB 174
provides relief for trucks that has been given to taxicabs.
Mr. Norris pointed out that the Alaska Trucking Industry
supports the legislation.
2:44:55 PM
SYDNI SWENSON, (TESTIFIED VIA TELECONFERENCE), U-HAUL, NORTH
POLE, voiced support for SB 174.
2:46:39 PM
Representative Hawker MOVED to ADOPT Amendment #1. Co-Chair
Meyer OBJECTED.
Representative Hawker explained that Amendment #1 was
offered on behalf of the House sponsor of the companion
Senate bill. The amendment provides an additional
exemption; "vehicles provided by automobile dealers as
replacement transportation during warranty or service
contract repairs". He acknowledged that the amendment
involves a title change but that it would not endanger the
substance of SB 174.
2:51:10 PM
Co-Chair Meyer inquired the impact the amendment would have
on the Department of Revenue.
JOANNA BALES, (TESTIFIED VIA TELECONFERENCE), PROGRAM
MANAGER, VEHICLE REVENUE TAX DIVISION, DEPARTMENT OF
REVENUE, ANCHORAGE, indicated that they do not have the data
necessary to determine the amount.
2:52:40 PM
Co-Chair Meyer requested the amount anticipated
collected. Ms. Bales said it would be small. There are
only six other states that have their own vehicle rental tax
and it appears it is a 50/50 exemption. Co-Chair Meyer knew
that the City of Anchorage has a car rental tax; he asked
how they dealt with such situations. Ms. Bales replied that
they do exempt U-Haul vehicles.
2:53:53 PM
Co-Chair Chenault asked about the replacement transportation
service contracts and if they would include rentals from a
dealer during the time of repairs. Representative Hawker
understood that was not accommodated.
2:54:59 PM
Co-Chair Meyer asked if Senator Huggins supported the
amendment. Senator Huggins responded that he hoped it was
"friendly" and that he would support it.
2:57:09 PM
Representative Holm asked if Amendment #1 would generate an
indeterminate fiscal note. Co-Chair Meyer thought it would
be slightly higher than the one provided.
2:57:47 PM
Representative Hawker pointed out that Ms. Bales had
indicated that the information was not immediately
forthcoming. Ms. Bales explained it would be a minimal
impact on the rental tax and that the existing note should
be sufficient.
2:59:37 PM
Vice-Chair Stoltze inquired if the language was broad enough
to cover recall. Representative Hawker thought a recall
activity would be part of the warranty process.
3:00:53 PM
Representative Weyhrauch stated that there are no guarantees
with the proposed language. A service contract does not
necessarily include a recall.
Representative Hawker suggested amending the amendment by
adding, "recall".
3:01:32 PM
Vice-Chair Stoltze MOVED the friendly amendment proposed by
Representative Hawker. There being NO OBJECTION, it was
amended.
3:02:12 PM
Co-Chair Meyer WITHDREW his OBJECTION. There being NO
further OBJECTION, amended Amendment #1 was adopted.
Representative Kelly MOVED to REPORT HCS SB 174 (FIN) out of
Committee with individual recommendations and with the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
HCS SB 174 (FIN) was reported out of Committee with a "do
pass" recommendation, with fiscal note #1 by the Department
of Revenue and a House Concurrent Resolution to address the
title change.
3:03:51 PM
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