Assigned to FIN                                                                                                                      FOR COMMITTEE

ARIZONA STATE SENATE

Fifty-Fourth Legislature, First Regular Session

FACT SHEET FOR S.B.1214

rental car surcharge; exception

Purpose

            Exempts government-owned vehicles from the five percent surcharge on rental contracts.

Background

            Current statute requires rental motor vehicle businesses to collect a five percent surcharge on each rental contract that is for a period of 180 days or less. The surcharge is computed based on the total rental contract price amount, less any applicable taxes and fees.

            The surcharge is used to reimburse the rental business for the vehicle license tax (VLT) imposed on the rental vehicle. The business is required to report the amount of VLT paid and the amount that surcharges collected exceeds VLTs paid to the Arizona Department of Transportation by February 15 of each year. The amount of surcharges collected that exceeds the amount of VLTs paid must be remitted to the state (A.R.S. § 28-5810).

            All federal, state, county and municipal property is exempt from taxation (Ariz. Const.
art. 9, § 2).

            There is no anticipated fiscal impact to the state General Fund associated with this legislation.

Provisions

1. Exempts motor vehicles owned by government entities from the five percent surcharge on vehicle rental contracts.

2. Makes technical changes.

3. Becomes effective on the general effective date.

Prepared by Senate Research

February 4, 2019

CS/LC/kja