Legislature(2003 - 2004)
04/21/2004 09:09 AM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= 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 second hearing for this bill in the Senate Finance Committee. Co-Chair Wilken explained that this legislation would exempt taxicabs from the passenger vehicle rental tax by removing them from the definition of a passenger vehicle. He reminded that this tax, which specified that a ten-percent vehicle would be imposed on the rental and lease of passenger vehicles, was enacted during the previous Legislative Session. He informed the Committee that the fiscal "unintended consequence" of adopting Amendment #1 during the first hearing on this bill was a $400,000 decrement to the budget. 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 to rescind the March 9, 2004 Committee action of adopting Amendment #1. There being no objection, the Committee action of adopting Amendment # 1 was RESCINDED. Co-Chair Wilken specified, therefore, that HB 347, Version 23- LS1311\D is before the Committee. JAMES BRENNAN, Attorney, representing Anchorage Taxicab Permit Owners Association, testified via teleconference from Anchorage and commented that he is available to answer questions. He noted that a copy of his April 7, 2004 letter [copy on file], addressed to Senator Wilken is included in Members' packets. Senator Olson asked the Association's position on the legislation. Mr. Brennan responded that the Association "is strongly in favor" of this legislation as the tax "accidentally" imposed a burden on taxicab drivers. He explained that the sponsor of the tax legislation that was adopted the previous year, were unaware that, "imbedded in the Anchorage taxicab industry" was a rental arrangement in which independent drivers rent their taxicab vehicle from "an operator," who maintains the taxicab and pays for such things as liability insurance. Therefore, he continued, the taxicab drivers rent the vehicle and are therefore subject to the ten- percent tax. Furthermore, he detailed that these rentals are considered daily rentals. He shared that there are 158 general permits and that a taxicab could be rented out for both a day shift and night shift. In all cases, he continued, the taxicab drivers are local Anchorage residents. He stated that it came to "a shock" to the bill's sponsor, Representative Pete Kott, and to the Department of Revenue that these drivers would be subject to this tax. Therefore, he urged that this legislation be adopted to remove this burden from taxicab drivers. Co-Chair Wilken surmised therefore, that the testifier is "strongly in favor" of the legislation. Mr. Brennan concurred. The bill was HELD in Committee.