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Get The Facts

The Truth About Rental Car Taxes

Rental car excise taxes are different from other taxes. They are regressive, discriminatory, economically harmful and violate the Constitution. And did you know that the majority of rental car customers are locals, and not tourists?

A Tax That Hurts Us All

Car Rental Tax Myths
Rental Car Taxes and Interstate Commerce
Rental Cars and the Auto Industry

Here, you can get the facts about rental car taxes by clicking through the issues below:

Who really pays the tax?

Car rental taxes hurt poor Americans in neighborhood locations

  • Households earning less than $100,000 annually pay half of all car rental excise taxes, making this tax regressive.
  • 19% of all car rental excise taxes are paid by working families earning less than $50,000 annually.
  • 7% of all car rental taxes are paid by households earning less than $25,000 annually.

Minorities are hit hard by car rental taxes
  • African-Americans generate 26% of rental car revenues and pay 27% of the excise taxes despite only accounting for 12% of the population.
  • Members of other minority groups pay 13% of all car rental excise taxes despite being only 7% of the population.

We ALL Pay

Even if you never rent a car in your lifetime, you pay in the form of increased auto insurance costs resulting from insurance claims costs passed on to all policyholders.

All survey results are based on the Brattle Group Study

Stadium Spotlight

Rental car taxes financed dozens of sports stadiums and many remain in place after the stadiums are built

At least 33 professional sports stadiums have been funded through excise taxes on rental cars. Excise taxes are taxes ON TOP of regular sales taxes. Excise taxes used to fund stadiums have a pile-on effect when combined with other narrowly-focused taxes, which can total to nearly a dozen different taxes and fees. The result? Millions of people, both locals and travelers, are forced to pay for stadiums that they'll never step foot in.

Local governments target rental car customers because they believe that most renters are travelers, not locals who vote and pay taxes in the area. But the fact is, the majority of those who rent cars are locals.


Interstate Commerce

Only Congress has the authority to regulate interstate commerce, not local governments

Rental car taxes are by definition discriminatory and place an undue burden on interstate commerce. Congress, not state or local governments, has the sole right to regulate interstate commerce. When excessive local taxes burdened the airline, railroad, bus and motor carrier industries, Congress stepped in to protect the rights of consumers and companies engaged in interstate commerce. Undoubtedly, if Congress had not acted, these industries would be subject to the same unfair taxes rental car customers are subjected to today.


Here, you can download and share our rental car tax graphics and studies

Taken for a Ride: Economic Effects of Car Rental Taxes
  • William G. Gale, Ph.D. - The Brookings Institution
  • Kim Reuben, Ph.D. - Urban Institute
Economic Effects of Excise Taxes on Car Rentals
  • Dr. Kevin Neels - The Brattle Group
"It's time to give drivers a break"