115th CONGRESS 1st Session |
To protect consumers from discriminatory State taxes on motor vehicle rentals.
April 6, 2017
Mr. Graves of Missouri (for himself, Mr. Cohen, Mr. Rodney Davis of Illinois, Mr. Long, Mr. Luetkemeyer, Mr. Smith of Missouri, Mr. Bost, Mr. Farenthold, Mr. Clay, Mr. Richmond, Ms. Moore, Mr. Chabot, Mr. Bishop of Michigan, Mr. Franks of Arizona, Mr. Duncan of Tennessee, Mr. Jordan, Mr. Barr, Mrs. Napolitano, Mr. Raskin, and Mr. Issa) introduced the following bill; which was referred to the Committee on the Judiciary
To protect consumers from discriminatory State taxes on motor vehicle rentals.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
This Act may be cited as the “End Discriminatory State Taxes for Automobile Renters Act of 2017”.
(a) Findings.—Congress finds the following:
(1) Congress has prohibited economic protectionism by State and local governments that unduly burden or discriminate against interstate commerce and transportation under the authority granted by the Commerce Clause of the Constitution by enacting laws such as the Railroad Revitalization and Regulatory Reform Act of 1976, the Motor Carrier Act of 1980, the Bus Regulatory Reform Act of 1982, and the Airport and Airway Improvement Act of 1982.
(2) In Gibbons v. Ogden, 22 U.S. 1 (1824), a case challenging the exclusive right of navigating the waters of New York granted by that State, the Supreme Court affirmed that it is the sole right of Congress to regulate commerce between the States under what Chief Justice John Marshall recognized as the dormant Commerce Clause.
(3) Since 1990, over 100 discriminatory taxes have been imposed by State and local governments on motor vehicle rentals in violation of the dormant Commerce Clause.
(b) Purpose.—The purpose of this Act is to prohibit prospectively, and provide a remedy for, tax discrimination by a State or Locality against the rental of motor vehicles.
SEC. 3. Prohibition on discrimination.
(a) In general.—Chapter 805 of title 49, United States Code, is amended by adding at the end the following new section:
Ҥ 80505. Tax discrimination against motor vehicle rental property
“(a) Definitions.—In this section:
“(1) ASSESSMENT AND ASSESSMENT JURISDICTION.—
“(A) ASSESSMENT.—The term ‘assessment’ has the meaning given that term in section 11501(a)(1).
“(B) ASSESSMENT JURISDICTION.—The term ‘assessment jurisdiction’ has the meaning given that term in section 11501(a)(2).
“(2) COMMERCIAL AND INDUSTRIAL PROPERTY.—The term ‘commercial and industrial property’ means property, other than motor vehicle rental property and land used primarily for agricultural purposes or timber growing, which is devoted to a commercial or industrial use.
“(3) COMMERCIAL AND INDUSTRIAL TAXPAYERS.—The term ‘other commercial and industrial taxpayers’ means persons of entities who are engaged in a trade or business, other than the trade or business of renting motor vehicles, within a State or Locality.
“(4) COVERED PERSON.—The term ‘covered person’ means a person who—
“(A) rents motor vehicles to another person;
“(B) is engaged in the business of renting motor vehicles;
“(C) owns motor vehicle rental property;
“(D) rents a motor vehicle from another person; or
“(E) purchases motor vehicle rental property.
“(5) DISCRIMINATORY TAX.—The term ‘discriminatory tax’ includes the following:
“(A) A tax discriminates against the rental of motor vehicles if a State or Locality imposes the tax on, or with respect to—
“(i) the rental of motor vehicles but the tax is not a generally applicable tax on, or with respect to, more than 51 percent of the rentals of other tangible personal property within the State or Locality; or
“(ii) the rental of motor vehicles at a tax rate that exceeds the generally applicable tax rate on at least 51 percent of the rentals of other tangible personal property within the same State or Locality.
“(B) A tax discriminates against the business of renting motor vehicles if a State or Locality imposes the tax on, or with respect to—
“(i) the business of renting motor vehicles but the tax is not a generally applicable tax on, or with respect to, more than 51 percent of the businesses of other commercial and industrial taxpayers within the State or Locality; or
“(ii) the business of renting motor vehicles at a tax rate that exceeds the generally applicable tax rate on at least 51 percent of the business of commercial and industrial taxpayers within the State or Local jurisdiction.
“(C) A tax discriminates against motor vehicle rental property if a State or Locality—
“(i) assesses motor vehicle rental property at a value that has a higher ratio to the true market value of the property than the ratio of the assessed value to the true market value applicable to commercial and industrial property in the same assessment jurisdiction;
“(ii) levies or collects a tax on an assessment that may not be made under clause (i); or
“(iii) levies or collects an ad valorem property tax on motor vehicle rental property at a generally applicable tax rate that exceeds the tax rate applicable to commercial and industrial property in the same assessment jurisdiction.
“(6) LOCAL OR LOCALITY.—The terms ‘Local’ and ‘Locality’ mean a political subdivision of any State, or any governmental entity or person acting on behalf of such Locality, with the authority to impose, levy, or collect taxes.
“(7) MOTOR VEHICLE.—The term ‘motor vehicle’ has the meaning given that term in section 13102(16).
“(8) MOTOR VEHICLE RENTAL PROPERTY.—The term ‘motor vehicle rental property’ means property owned or used by a person engaged in the business of renting motor vehicles and used to provide rentals of motor vehicles.
“(9) RENTAL OF MOTOR VEHICLES.—The term ‘rental of motor vehicles’ means the rental of a motor vehicle that is given by the owner of the motor vehicle for exclusive use to another for not longer than 180 days for valuable consideration and only includes the rental of motor vehicles with a pre-arranged driver or motor vehicles without a driver, but shall not include taxi cab service as defined by section 13102(22).
“(10) RENTAL OF OTHER TANGIBLE OR PERSONAL PROPERTY.—The term ‘rental of other tangible or personal property’ means any rental of tangible or personal property, other than the rental of motor vehicles.
“(11) STATE.—The term ‘State’ means any of the several States, the District of Columbia, or any territory or possession of the United States, or any governmental entity or person acting on behalf of such State, and with the authority to impose, levy, or collect taxes.
“(12) TAX.—Except as otherwise specifically provided below, the term ‘tax’ means any type of charge required by statute, regulation, or agreement to be paid or furnished to a State or Locality, regardless of whether such charge is denominated as a tax, a fee, or any other type of exaction. The term ‘tax’ does not include any charge imposed by a State or Locality with respect to a concession agreement at a federally assisted airport (provided the agreement does not violate the revenue diversion provisions of section 40116(d)), or the registration, licensing, or inspection of motor vehicles, if the charge is imposed generally with respect to motor vehicles, without regard to whether such vehicles are used in the business of renting motor vehicles within the State or Locality.
“(13) TAX BASE.—The term ‘tax base’ means the receipts, income, value, weight, or other measure of a tax to which the rate is applied. The ‘tax base’ of a tax imposed on a per unit basis is the unit.
“(14) GENERALLY APPLICABLE TAX.—The term ‘generally applicable tax’ may be determined by—
“(A) the gross receipts of rentals of other tangible personal property or other commercial and industrial taxpayers within the State or Locality to which the tax is imposed by the State or Locality compared to the gross receipts of rentals of other tangible personal property or other commercial and industrial taxpayers within the State or Locality; or
“(B) another method used to determine whether more than 51 percent of rentals of other tangible personal property or other commercial and industrial taxpayers is subject to the tax.
“(b) Unreasonable burdens and discrimination against interstate commerce.—
“(1) IN GENERAL.—The following acts unreasonably burden and discriminate against interstate commerce, and a State or Locality may not do any of them:
“(A) Levy or collect a discriminatory tax on the rental of motor vehicles.
“(B) Levy or collect a discriminatory tax on the business of renting motor vehicles.
“(C) Levy or collect a discriminatory tax on motor vehicle rental property.
“(2) EXCLUSION.—Discriminatory taxes are not prohibited under this section if the tax is imposed as of the date of the enactment of this section, does not lapse, the tax rate does not increase, and the tax base for such tax does not change.
“(1) IN GENERAL.—Notwithstanding section 1341 of title 28, a covered person aggrieved of a violation of subsection (b) may bring a civil action in a district court of the United States seeking damages, injunctive relief, other legal or equitable relief, or declaratory relief.
“(2) RELIEF.—In granting relief against a tax levied or collected in violation of subsection (b), if the tax is a discriminatory tax the court shall strike only the discriminatory or excessive portion of the tax.
“(A) IN GENERAL.—Except as provided in subparagraph (B), a covered person shall have the burden of proving, by a preponderance of the evidence, that the levying or collecting of a tax violates subsection (b).
“(B) EQUIVALENT OF OTHER TAXES.—If the court determines that the levying or collecting of a tax violates subsection (b), the State or Locality shall have the burden of proving, by a preponderance of the evidence, that the tax is the equivalent of a tax imposed on other commercial and industrial taxpayers under paragraph (2).
“(4) OTHER REMEDIES.—Nothing in this subsection shall limit any cause of action or remedy available under any other provision of Federal or State law.
“(d) Limitations.—This section shall not be construed to constitute the consent of Congress to State or Local taxation that would be prohibited in the absence of this section.”.
(b) Clerical amendment.—The table of sections for chapter 805 of title 49, United States Code, is amended by inserting after the item relating to section 80504 the following:
“80505. Rules relating to State taxation with respect to automobile rentals.”.