Legislature(2013 - 2014)BARNES 124
04/01/2014 01:00 PM House TRANSPORTATION
| Audio | Topic |
|---|---|
| Start | |
| HB314 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 314 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE TRANSPORTATION STANDING COMMITTEE
April 1, 2014
1:03 p.m.
MEMBERS PRESENT
Representative Peggy Wilson, Chair
Representative Doug Isaacson, Vice Chair
Representative Eric Feige
Representative Lynn Gattis
Representative Bob Lynn
MEMBERS ABSENT
Representative Craig Johnson
Representative Jonathan Kreiss-Tomkins
COMMITTEE CALENDAR
HOUSE BILL NO. 314
"An Act relating to the application of the passenger vehicle
rental tax; and providing for an effective date."
- MOVED CSHB 314(TRA) OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: HB 314
SHORT TITLE: PASSENGER VEHICLE RENTAL TAX
SPONSOR(s): REPRESENTATIVE(s) THOMPSON
02/19/14 (H) READ THE FIRST TIME - REFERRALS
02/19/14 (H) TRA
02/25/14 (H) TRA AT 1:00 PM BARNES 124
02/25/14 (H) Heard & Held
02/25/14 (H) MINUTE(TRA)
04/01/14 (H) TRA AT 1:00 PM BARNES 124
WITNESS REGISTER
REPRESENTATIVE STEVE THOMPSON
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Testified as prime sponsor during the
discussion of HB 314.
JANE PIERSON, Staff
Representative Steve Thompson
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: On behalf of the prime sponsor,
Representative Steve Thompson, explained Version C of HB 314.
ACTION NARRATIVE
1:03:18 PM
CHAIR PEGGY WILSON called the House Transportation Standing
Committee meeting to order at 1:03 p.m. Representatives P.
Wilson, Isaacson, Feige, and Gattis were present at the call to
order. Representative Lynn arrived as the meeting was in
progress.
HB 314-PASSENGER VEHICLE RENTAL TAX
1:03:55 PM
CHAIR P. WILSON announced that the only order of business would
be HOUSE BILL NO. 314, "An Act relating to the application of
the passenger vehicle rental tax; and providing for an effective
date."
1:04:31 PM
REPRESENTATIVE ISAACSON moved to adopt the proposed committee
substitute (CS) for HB 314, labeled 28-LS1479\C, Strasbaugh,
3/27/14, as the working document. [Before the committee was
Version C.]
1:05:05 PM
REPRESENTATIVE STEVE THOMPSON, Alaska State Legislature, stated
that in 2003 the legislature passed a bill requiring a passenger
vehicle rental tax intended to raise revenue from tourist using
rental cars on the state road system. The rental car companies
collect the tax from their customers and subsequently submit the
rental tax to the state. For the first nine years of the
vehicle rental tax, the Department of Revenue (DOR) did not
apply the tax to Alaskan companies engaged in the long term
leasing of heavy vehicles to other Alaska businesses. In 2010
the DOR began an attempt to collect the vehicle rental tax from
Alaskan businesses who may not be involved in the visitor
industry and do not rent to tourists. Some companies had long-
term leases, mostly consisting of heavier vehicles that they
rented from other Alaska businesses. In order to clarify the
intent of the original vehicle rental tax, HB 314 would amend
the statute to clarify that the passenger vehicle rental tax
does not apply to Alaskan businesses making long term rentals to
other Alaska businesses. The proposed committee substitute,
(CS) for HB 314, Version C, would reduce the term of the rental
tax from 90 days to 28 days as exempt from the tax. This period
represents the typical rental time period for many vehicles
operated on the North Slope. Additionally, this bill better
organizes the statutes by consolidating the term "passenger" and
"recreational" into the same section.
1:07:02 PM
JANE PIERSON, Staff, Representative Steve Thompson, Alaska State
Legislature, on behalf of the prime sponsor, explained Version
C. She stated that Section 1 is a housekeeping provision that
consolidates the two existing sections for passenger and
recreational vehicles into one group. Section 2 would amend the
90-day leasing period exemption to 28 days or more since many
commercial leases run for 28 days. Additionally, the bill
incorporated language from the Department of Revenue's
regulations regarding extensions. Thus, the vehicle rental
contract would be exempt if the vehicle rental is for 28 days or
more, is in a written contract, so long as the rental contract
is not terminated prior to the expiration of the 28-day lease or
rental period. An extension of the lease is exempt from the
vehicle rental tax so long as there is not any break between the
initial period and the period of extension, and the extension is
agreed upon before the 28-day lease or rental period. This
would bring it more in line with the 28-day leases, she said.
1:08:45 PM
MS. PIERSON stated that proposed Section 3 is a consolidation of
the terms "passenger" and "recreational" to better organize the
statute. This section clearly states that passenger vehicles
are taxed at a rate of 10 percent while recreational vehicles
are taxed at the rate of 3 percent. In fact, this provision was
in the current statute so this language doesn't represent a
change, but simply reorganizes the statute. Proposed Section 4
repeals AS 43.52.030 and AS 43.52.040 because these provisions
are no longer needed due to the consolidation. Finally,
proposed Section 5 provides for an immediate effective date.
Again, the intent of Version C of HB 314 is to clarify which
rental vehicles are to be taxed and which are not. The intent
of the tax is that it be limited to passenger rental cars as
described in AS 43.52.
1:09:44 PM
REPRESENTATIVE GATTIS asked for clarification on the 28-day
leasing period.
MS. PIERSON explained that in talking to equipment rental
companies that rent vehicles in long term leases, that the
shortest term spans 28 days. This bill would apply to those
leases. A tourist who rents a car typically will not rent it
for 28 days, and if so, the tourist would be spending
significant funds in Alaska. This describes the logic used and
draws "the line in the sand" to exempt long-term leases from the
vehicle rental tax.
1:10:30 PM
REPRESENTATIVE GATTIS asked for further clarification on the 28
days period versus 30 days.
MS. PIERSON indicated that 28 days represents a four-week lease.
Additionally, in reviewing other statutes, such as hotel taxes,
once the person has established residency for 30 days the room
is no longer taxed. This represents the logic used in
considering the length of time for vehicle rental tax
exemptions. Originally the sponsor considered 30 days but the
companies advised the sponsor that the lease terms are typically
28 days.
REPRESENTATIVE GATTIS related her understanding that the leases
are for a four week timeframe.
1:11:29 PM
CHAIR P. WILSON opened public testimony on HB 314. [The
committee treated it as not being opened as no one wished to
testify.]
1:11:48 PM
REPRESENTATIVE GATTIS commented that the sponsor cleaned up some
areas and did a good job. She said she would like the bill to
move from committee; that it is a good bill.
1:12:30 PM
REPRESENTATIVE ISAACSON moved to report Version C out of
committee with individual recommendations and the accompanying
fiscal notes. There being no objection, the CSHB 314(TRA) was
reported from the House Transportation Standing Committee.
REPRESENTATIVE ISAACSON indicated a fiscal note is forthcoming
for Version C.
CHAIR P. WILSON mentioned that there is currently a zero fiscal
note but she anticipated a forthcoming fiscal note for Version
C.
1:13:34 PM
ADJOURNMENT
There being no further business before the committee, the House
Transportation Standing Committee meeting was adjourned at 1:13
p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| CS- HB 314 version C 3 27 14.pdf |
HTRA 4/1/2014 1:00:00 PM |
HB 314 |
| HB 314 - Sectional Analysis 3 28 14.pdf |
HTRA 4/1/2014 1:00:00 PM |
HB 314 |
| HB 314 - Sponsor Statement ver C 3 28 14.pdf |
HTRA 4/1/2014 1:00:00 PM |
HB 314 |