LIHU‘E — Major rental-car companies are opposing a bill before the Kaua‘i County Council that seeks to create and define a real-property-tax class for rental-car fleets.
The bill was introduced in July as a means of taxing the tourism industry for its impacts on county infrastructure.
“We believe the measure unfairly assumes that the rental-car industry disproportionately impacts county infrastructure and roads,” Mark Cochrane, controller for Enterprise Holdings in Hawai‘i, said on Wednesday at a council public hearing on the bill.
Bill No. 2828, introduced by Councilmember Luke Evslin by request of the administration, would quantify a car-rental fleet as more than 10 cars. Currently, rental-car companies are taxed in the industrial class, which runs $8.10 per $1,000 net assessed valuation. In the current form of the bill, there is no set rate for the proposed tax class.
Cochrane estimated that rental cars only make up about 8.5% of cars on Kaua‘i.
“Therefore, we are talking about a smaller amount of total vehicles,” Cochrane said. “In addition, the type of vehicles that we are renting are passenger vehicles. We do not rent any heavyweight, commercial-sized vehicles, so the use does not cause the same amount of damage as a larger vehicle could.”
Cochrane on behalf of clients Enterprise Holdings, Alamo Rent-A-Car, National Car Rental and Enterprise Commute, in written testimony also pointed to the unfair nature of this bill not similarly taxing moving companies, tour operators, car dealerships, mail carriers and other services that also are in the business of moving goods or people with cars.
“Why is the rental-car industry being singled out when there are many other businesses that facilitate vehicular usage on the island, such as delivery services, that do not remain within the confines of the parcel taxed?” Robert Muhs of Avis Budget Group wrote, echoing that point. “This is an equal-protection issue.”
The rental-car industry already pays into the state general excise tax, a $5 per day rent tax, a 10% airport concession fee and a $4.50 per day consolidation facility charge.
The county’s real-property tax is based on use, which provides the county the ability to tax different uses separately based on the underlying assessed value of the property. Real-property-tax classification runs with the use on the land, similarly to how the county taxes short-term vacation rentals separately from the property of a residential home.
“The pandemic has presented unprecedented challenges, and our industry is still recovering,” Muhs said. “Bill 2828 will create an undue burden not only on visitors, but on Hawai‘i residents that need to rent cars.”
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Sabrina Bodon, editor, can be reached at 245-0441 or sbodon@thegardenisland.com.
“Cochrane estimated that rental cars only make up about 8.5% of cars on Kaua‘i.” Baloney, try counting all the cars the rental car companies have funneled back into Kauai since they re opened, plus Turo increases, plus non Turo citizen rentals. And then there is the fact that there were NO traffic issues when rental cars were off the road during the pandemic. This bill needs to pass or we need new council members.
They pass all there hidden fees to the customers anyway so why are they crying now. Tax the rip off mainland corporate companies.
Tourists are willing to pay. Hawaii is a premium experience. Most of the issues of “over tourism” can be solved by simply charging more and improving infrastructure. Restricting access to the beach and attractions will just drive the wealthy tourists away. They won’t put up with it, but they are willing to pay a premium to get what they want.
Unfortunately for the current residents the wealthy are also willing to pay more for housing. Housing is the real problem for those who live here today. If nothing is done they will simply be displaced off island by the new comers. New wealthy residents don’t want tourists either. I don’t see anyone stopping their kids from having kids.
They deserved to be taxed more with all the traffic they cause and money they make off the visitors, they should contribute more to the county to repair the infrastructure.
you cannot tax your way to prosperity….clarification of this statement: “The rental-car industry already pays into the state general excise tax, a $5 per day rent tax, a 10% airport concession fee and a $4.50 per day consolidation facility charge.”
actually, the consumer pays these, in the form of higher rental rates/fees…
randy seems to have gotten it…tourists are already paying their share!
The car companies are richer. They don’t need to provide a service to Kaua’i. Tough luck.
I’m not backing up your Democrats on office on this issue. Some failed.
When the tourists started coming, I noticed an increase in traffic, but it was manageable. But now that school has started, traffic is horrible. That’s the problem.
The difference in congestion is obvious. Yeah, school traffic added to it, but I the traffic I experienced through Kapaa was minimal when tourism was down 50-90% compared to when Kauai opened up. The surcharges noted in the article are paid to the State…how much of that makes it to Kauai for our county roads? Rental cars affect county roads and planners need to determine how much of the maintenance is due to rental cars and charge accordingly. One solution might be to base the county registration fee on mileage as well as vehicle weight, #axles.