H. R. 4175
IN THE HOUSE OF REPRESENTATIVES
December 2, 2009
Mr. Boucher (for himself, Mr. Akin, Mr. Carnahan, Mr. Graves, Mr. Boren, Mr. Sullivan, Mr. Israel, Mr. Wilson of South Carolina, and Mr. Carter) introduced the following bill; which was referred to the Committee on the Judiciary
To protect consumers from discriminatory State taxes on motor vehicle rentals.
This Act may be cited as the
End Discriminatory State Taxes for
Automobile Renters Act of 2009.
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.
Assessment and assessment jurisdiction
The term assessment means valuation for a property tax levied by a taxing district. The term assessment jurisdiction means a geographical area in a State or Locality used in determining the assessed value of property for ad valorem taxation.
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, devoted to a commercial or industrial use, and subject to a property tax levy.
The term discriminatory tax includes the following:
A tax discriminates against the rental of motor vehicles if a State or Locality imposes the tax on, or with respect to—
the rental of motor vehicles but not on, or with respect to, the rental of more than 51 percent of the rentals of other tangible personal property rented within the State or Locality, or
the rental of motor vehicles at a tax rate that exceeds the tax rate generally applicable to at least 51 percent of the rentals of other tangible personal property within the same State or Locality.
A tax discriminates against the business of renting motor vehicles if a State or Locality imposes the tax on, or with respect to—
the business of renting motor vehicles but not on, or with respect to, the business of more than 51 percent of the other commercial and industrial taxpayers within the State or Locality, on the same tax base as the State or Locality employs with respect to the business of renting motor vehicles, or
the business of renting motor vehicles, at a tax rate that exceeds the tax rate generally applicable to the business of more than 51 percent of the other commercial and industrial taxpayers within the State or Local jurisdiction.
A tax discriminates against motor vehicle rental property if a State or Locality—
assesses motor vehicle rental property at a value that has a higher ratio to the true market value of the property than the ratio that the assessed value of other commercial and industrial property of the same type in the same assessment jurisdiction has to the true market value of the other commercial and industrial property,
levies or collects a tax on an assessment that may not be made under subparagraph (A), or
levies or collects an ad valorem property tax on motor vehicle rental property at a tax rate that exceeds the tax rate applicable to commercial and industrial property in the same assessment jurisdiction.
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, and with the authority to impose, levy or collect taxes.
The term motor vehicle has the same meaning as in section 13102(16) of title 49 of the United States Code.
Other commercial and industrial taxpayers
The term other commercial and industrial taxpayers means persons or entities who are engaged in trade or business within a State or Locality and who are subject to some form of taxation by a State or Locality.
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(20) of title 49 of the United States Code.
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.
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) of title 49 of the United States Code, 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.
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.
Tax rate generally applicable to other commercial and industrial taxpayers
The term tax rate generally applicable to other commercial and industrial taxpayers means the lower of—
the tax rate imposed on the greatest number of other commercial and industrial taxpayers or their customers, or
the unweighted average rate at which the tax is imposed.
No State or Locality may levy or collect a discriminatory tax on the rental of motor vehicles, the business of renting motor vehicles, or motor vehicle rental property.
Notwithstanding any provision of section 1341 of title 28, United States Code, or the constitution or laws of any State, the district courts of the United States shall have jurisdiction, without regard to amount in controversy or citizenship of the parties, to grant such mandatory or prohibitive injunctive relief, interim equitable relief, and declaratory judgments as may be necessary to prevent, restrain or terminate any acts in violation of this Act, except that such jurisdiction shall not be exclusive of the jurisdiction which any Federal or State court may have in the absence of this section.
Burden of proof
The burden of proof in any proceeding brought under this Act shall be upon the party seeking relief and shall be by a preponderance of the evidence on all issues of fact.
In granting relief against a tax which is imposed in violation of section 4, the court shall strike the tax in its entirety, unless the court finds the tax—
is the equivalent of a specific tax imposed on at least 51 percent of other commercial and industrial taxpayers, and
is not discriminatory in effect. If such tax is discriminatory in effect with respect to tax rate or amount only, the court shall strike only the discriminatory or excessive portion of the tax as determined by the court. Notwithstanding subsection (b) of this section, the burden of proof on the issue of whether a tax is the equivalent of a tax imposed on other commercial and industrial taxpayers shall be on the State or Locality that imposes the tax.
Cause of action
An action to enforce the provisions of this Act may be brought only by a person who—
rents motor vehicles to another person,
is engaged in the business of renting motor vehicles,
owns motor vehicle rental property, or
rents a motor vehicle from another person.
A person who rents a motor vehicle from another person and is seeking relief under this Act may only bring a cause of action against the State or Locality imposing the discriminatory tax as defined by this Act.
This Act shall not be construed to constitute the consent of Congress to State or Local taxation that would be prohibited in the absence of this Act.
The provisions of this Act shall become effective on December 2, 2009.
Discriminatory taxes as defined by this Act are not prohibited under this Act if—
State or Local legislative authorization for a discriminatory tax that is in effect as of December 2, 2009, does not lapse, the tax rate does not increase and the tax base for such tax does not change; or
a State enacts legislation by December 2, 2009;
that specifically authorizes a Locality to impose a discriminatory tax;
the Locality imposes the authorized tax within five years from the date the State enacted the authorization for the Local tax; and
the tax rate imposed by the Locality is not increased and the tax base for such tax does not change.