Industry Wire

TRALA Fights Back Rental Tax Hike and Insurance Increases in Florida

TRALA teamed up with its industry allies in Florida to defeat proposals to add a new $2 per day tax on car and truck leases and rentals and to increase the minimum levels of insurance requirements for rented and leased vehicles. The battle against both of these onerous proposals was waged up to the last day of the Florida legislative session, which ended on Friday, May 1.

Revenue from the $2 per day rental tax proposal would have helped fund the construction of the SunRail commuter rail system in central Florida between DeLand and Orlando. The tax proposed in Senate Bill 1212, would have given counties the ability to impose the tax, in addition to the already existing $2 statewide rental surcharge. The tax would have applied to the first 30 days of any rental or lease agreement, regardless of whether the vehicle was based in Florida or based out of state. TRALA argued aggressively that an additional tax on the motor vehicle rental industry was discriminatory and would hurt tourism and increase the cost of commercial transportation for Florida businesses.

At the same time TRALA was fighting back the rental tax increase, it was battling an effort to increase by 1000% the minimum levels of insurance required for coverage on rented and leased vehicles. While legislation had been introduced in identical bills SB 2622 and HB 1289 earlier in 2009 without much action, there was a last minute push by trial lawyers to pass the higher insurance requirements during the final days of the session. The effort to raise the minimum insurance requirements was seen by TRALA and other organizations as an attempt to circumvent the federal law eliminating vicarious liability known as the Graves Amendment.

The bills would have required lessees to have motor vehicle liability coverage with limits of $100,000 per person, $300,000 per incident for bodily injury liability and $50,000 for property damage liability, with $500,000 for combined bodily injury liability and property damage liability for rentals and leases of less than one year. This is an increase from the existing requirements of $10,000 per person/$20,000 per incident/$10,000 for property damage. The increase would have come with a stipulation that would have made it illegal for a company to rent or lease a vehicle if these minimum financial responsibility requirements were not met.

TRALA greatly appreciates the help of its industry allies in Florida in defeating the rental tax and minimum financial responsibility increases. These allies include the Florida Trucking Association, the Associated Industries of Florida, and the Florida Justice Reform Institute. For more information, contact TRALA’s Tom James at 703-299-9120 or at tjames@trala.org.