Congressmen Cohen, Chabot Introduce the “End Discriminatory State Taxes for Automobile Renters Act”

September 12, 2019
Press Release
Say it’s unfair for state governments to shift tax burden to car renters

WASHINGTON – Congressmen Steve Cohen (D-TN-09) and Steve Chabot (R-OH-01) today introduced the End Discriminatory State Taxes for Automobile Renters Act, limiting the use of excise taxes on “out-of-town” visitors renting cars to raise revenue for local needs.   

The bill would impose a moratorium on new car rental excise taxes while grandfathering in the existing ones.  Congress has the Constitutional authority to regulate interstate commerce and courts have ruled that car rentals involve a national market. In addition, car rental taxes hit those least able to pay them while affecting car insurance rates for every motorist. 

Congressman Cohen made the following statement:  

“State and local governments are looking to raise revenue with the least impact on their constituents, and I understand that.  However, these taxes, which are supposed to target ‘outsiders,’ actually hurt residents with the least ability to pay these taxes. These taxes can be particularly problematic in areas that have insufficient public transit. This is an unfair practice that must stop.” 

Congressman Chabot made the following statement: 

The car rental industry is a key component of our interstate economy, especially with respect to travel and tourism.  Unfortunately, because many of their customers are out-of-town travelers, car rental businesses have increasingly become an easy target for local governments looking to raise tax revenue without upsetting local residents.  These discriminatory tax practices are a drag on the economy, reducing demand for rental cars, raising car insurance rates, and negatively impacting new car purchases by rental companies.  Our legislation will place a permanent moratorium on these discriminatory taxes and help ease this unfair tax burden on American consumers.”