"I can't believe it. Let's get out of here," a disgusted Mike Taylor said Friday morning after a House committee approved a bill that would add a 4 percent tax on his rental car business.
House Majority Leader Chris Fox, R-Orem, wants the increase so Salt Lake County can expand the Salt Palace. Rental car fees are used, in part, to help the tourism industry. Fox's bill only allows counties of the first class to increase car rental fees, and Salt Lake County is the only county that fits that requirement.But Taylor, who besides owning a rental car outlet also is president of the Utah Lease and Rental Car Association, said with airport fees added in, Fox's bill would allow taxes and fees of 25.85 percent on every $1 of rental costs. "This would put us up in the top of the nation" in taxation, said Taylor.
"I went home from the Legislature last year ready to shoot myself in my foot because you increased car rental fees by 2.5 percent. But at least I had a little hope that you wouldn't come back to the trough (in 1998). This is absolutely unbelievable," Taylor said of Fox's bill.
He said that national studies show when rental car fees hit 19 percent to 21 percent, people stop renting and look elsewhere. "We had an outdoor convention here (last summer) and they didn't rent one car - in the past their convention came and you couldn't find a (rental) car," said Taylor.
Convention bookers and managers aren't stupid, said Taylor. They look for taxis, limousines and charter buses to take their groups if they expect too many complaints about rental car costs, he said.
But Fox said the Salt Palace expansion must take place if Salt Lake City hopes to keep pace with the ever-growing, ever-expanding convention business. The Salt Palace expansion, estimated to cost $39.5 million, will add $86 million to the state's economy each year, she said.
County Commission Chairman Brent Overson said without the rental car tax increase, he doubts the Salt Palace expansion could proceed. "We just don't have the revenue" to bond for the building, he said.