Lawmakers took a first step Monday to force peer-to-peer car sharing companies to pay some of the same taxes that traditional car rental companies face — a battle akin to earlier clashes between Uber and taxi companies or Airbnb vs. hotels.
The Senate Transportation Committee voted unanimously to endorse SB190, and sent it to the full Senate.
That comes as Salt Lake City also is expected to pass an ordinance Tuesday to impose hefty fines — from $500 to $1,000 per violation — to car sharing companies that operate without formal agreements at the Salt Lake City International Airport.
Bill Wyatt, executive director at the airport, says Turo is operating illegally there, although the company has said it is working in good faith to reach an operating agreement with the city.
Turo uses its online service to connect people who would like to rent out their personal cars with potential customers. The cars are not kept at the airport. The owners and renters make arrangements on where to meet, and the owner often picks them up at the airport to exchange keys and information.
Car rental companies testified Monday that Turo and similar companies escape many of the fees, taxes and regulation they face — which gives them a significant advantage, up to 30 percent or more.
“Is it fair for them to have a huge advantage over us because they are ‘sharing’ instead of ‘renting?’” asked Jesse Hubbard, owner of Rugged Rental.
Sen. Curt Bramble, R-Provo, sponsor of the bill, said all sides are still negotiating exactly where taxes should be set — but asked to pass the bill out of committee to keep it in play with less than two weeks left in the legislative session.
He said some groups were “slow-baking” the bill, hoping to kill it by arguing not enough information is available or that it is too complicated.
Greg Curtis, a former House speaker who is a lobbyist for Allstate, which operates a peer-to-peer car service, took umbrage at that. He told the committee Bramble had been negotiating with others but not him. Bramble said the various sides seem not to be far apart.
Bramble said he will leave airport fees to the city to decide and negotiate, but it sounds like the car sharing companies — which would not use many airport facilities — would pay about $6 a day, while traditional rental companies pay a 10 percent fee. SB198 would simply require an agreement with the airport to operate there.
Bramble said his bill will allow car sharing firms to pay less in state and county tourism taxes than traditional car rental companies, although those numbers are still being negotiated.
He said that is because traditional car rental companies pay no sales tax when they purchase cars, but charge sales tax as they rent vehicles. With car sharing, individual owners paid sales tax when they purchased their cars.
Bramble said separate tax restructuring bills are looking at how much sales tax to charge on various types of car rental transactions.
Bramble’s bill also requires insurance and outlines other regulation for car sharing firms.
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