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Lawmakers Look Into Taxing Peer-To-Peer Rental Car Services

Young and handsome businessman buying used car
Adobe Stock

Florida lawmakers want to tax companies that let people rent out their personal cars. A proposal in the legislature would apply the same surcharge regular rental car companies pay to transactions made through apps like Turo. But the same companies say they aren’t rental car agencies and shouldn’t be treated as such.

As new inventions and jobs are created new laws on what can be done with them usually follow. With rideshare services like Uber, it took time but Florida passed legislation regulating it. Now lawmakers are focusing on a new rideshare service. This one lets users shop around for a car to rent from private owners who’ve put their car on the app.

Rep. Chris Latvala (R-Pinellas) believes the users renting cars should have to pay the same fees they would if they were to rent from a place like Enterprise.

“The bill makes it clear that the rental car surcharge and sales tax which is levied on every renter of a vehicle in Florida includes rentals by peer-to-peer car sharing companies," Latvala said.

That sales tax was passed decades ago, mainly to make sure every car on Florida’s roads got taxed. Rental car companies get a tax break when they buy their fleet of cars in bulk. So Florida created a surcharge. Leslie Dughi with Enterprise National and Alimo Car Rental explains.

“In 1987, the State of Florida approved the rental car surcharge. And they decided that people who were putting wheels on the road, tourists, businesses, and Floridians, by renting cars should help pay for maintenance and building the roads," Dughi said.

The surcharge is $2 per day. Dughi thinks customers are at a disadvantage when renting with traditional companies because they are required to pay the fee, while there’s no fee for peer to peer sharing companies. Dughi says the apps should be treated just like car rental agencies. She says it’s not just an agreement between friends.

“Contractual agreement is between the owner of the vehicle and the peer-to-peer ccompany. Additionally, the contractual agreement is between the person who rents a car, and wants to rent a car from that site, and the site. So there is no real peer-to-peer," Dughi said.

Avail, owned by AllState, is one of the peer-to-peer companies, George Feijoo represents the company. He says it is not a rental car agency.

"I would submit to you that we are just a technology platform we own no cars; we own zero cars," Feijoo said. "So at the end of the day what we’re doing here is we’re recreating a system and trying to make it more efficient and consumer friendly and safe and insured - of a possible transaction that could happen today between you and your neighbor.

Feijoo says taxing his customers isn’t fair because the car owners already paid a tax when they purchased the car.

"The rental car surcharge, when it was developed and put into law, did not contemplate the inputs that are going into our business model, right?" Feijoo said. "Such as the sales tax that’s already being paid in. So that’s why what we’re submitting is that it will just inflate the cost on our side of the business model."

Latvala says he’s hoping to work with people on both sides of the issue as the bill moves forward.