Industry Wire

Trucks Exempted from New Jersey Rental Tax

TRALA and its Industry Council for Vehicle Renting and Leasing succeeded in limiting the application of a new 5% tax on vehicle rentals to exclude trucks and to apply only to rental locations in industrial zones near large commercial airports. TRALA and the Industry Council opposed the tax in its entirety when it was introduced in May 2008. The truck exclusion and further limitations were added to the proposal following TRALA’s contact with the bill sponsor and other key lawmakers.

Though legislation authorizing the new 5% tax was introduced in 2008 as Assembly Bill 2765, the final proposal was included in AB 4048, the “New Jersey Economic Stimulus Act of 2009,” which was signed into law on July 28, 2009. The 5% tax can be applied in any municipality that has a population of 100,000 or more, and an airport that schedules at least 10 commercial flights per day. An eligible municipality must adopt an ordinance in order to impose the tax authorized by this new law.

The initial rental tax proposal considered by the New Jersey legislature would have applied to all motor vehicle rentals, including commercial truck rentals and trucks rented to the general public. The tax as enacted into law will be applied only to motor vehicles “intended primarily for passenger (as distinct from cargo) use.”

TRALA and the Industry Council remain strongly opposed to discriminatory state and local taxes targeting the motor vehicle rental industry. In many cases, such as the recently passed rental tax in New Jersey, new taxes are piled on top of existing taxes imposed on the industry. New Jersey already charges a $5 per day fee for motor vehicle rentals in the state.

To see a copy of the section of AB 4048 that authorizes the new 5% local rental tax, please click here. For more information on TRALA’s fight against rental taxes, please contact Tom James at 703-299-9120 or at tjames@trala.org.