Since the beginning of 2019, Montpelier lobbying firms have collected nearly $80,000 to fight a battle that has barely even begun.
At issue is whether peer-to-peer ridesharing services such as Turo should be responsible for paying the same 9% tax that traditional car-rental companies must pay. In the words of Sen. Mark MacDonald, D-Orange, it’s “Son of Airbnb.” Once again, a digital startup is disrupting an established industry, raising questions about how it should be defined, taxed and regulated.
Turo provides an online platform that connects individuals who have rentable vehicles with customers looking for a car. The company has barely even begun operating in Vermont; a check of its website shows that only eight vehicles are rentable via Turo in the state, five in Chittenden County.
No legislation has been introduced in the House or Senate, but the lobbyists are on the case. Enterprise Holdings, which owns Enterprise, National and Alamo, has spent $44,000 on lobbying in Vermont, mostly to independent lobbyist Jeanne Kennedy and James Feehan of Primmer Piper. The American Car Rental Association has retained the firm of Morris and DeMag to the tune of $20,000. Turo has paid nearly $15,000 to Leonine Public Affairs.
On Tuesday, the Senate Finance Committee heard testimony from Kennedy and from Leonine’s Dylan Zwicky. Kennedy argued that Turo should be classified as a vehicle rental service, subject to the tax on rentals. “We’ve always abided by state laws covering car rentals,” she told the committee. “Now there’s a new technology, peer-to-peer. Its business model avoids paying tax on car rentals.”
Zwicky pointed out that while traditional rental agencies pay the 9% rental tax, they don’t have to pay Vermont’s 6% purchase and use tax when they buy vehicles for their fleets. Individuals who rent through the Turo platform do pay that tax. In addition, he said, Turo “will pay a 6% sales tax on each transaction.”
In that way, Zwicky said, Turo is not an exact parallel to AirBnB or online retailers like Amazon and Wayfair. Even without the 9% car rental tax, he argued, the state gets its fair share from Turo.
Committee chair Sen. Ann Cummings, D-Washington, said her goal is to “make sure everybody pays something, so no one gets a competitive advantage.”
But it’s unclear what that means to lawmakers. “I’m not sure who comes out ahead” in the current system, said Sen. Chris Pearson, P/D-Chittenden. There’s a general sense that the issue needs to be addressed one way or the other, but no real direction so far.
– John Walters, VTDigger political columnist
