House Bill 102 would tax car-sharing companies

Should those who “share” their cars with others on digital platforms be taxed? What does “sharing” even mean?

House Bill 102, sponsored by Rep. Adam Wool and short-titled the “Vehicle Rental Modernization Act,” would allow the Alaska Department of Revenue to collect taxes on peer-to-peer car-sharing transactions, just as a standard car rental service like Enterprise or Hertz pay taxes.

“HB 102 brings equity to the rental industry for motor vehicles, and will generate additional income for the State’s general fund as the private vehicle rental network industry continues to grow and diversify in the Alaskan economy,” Wool wrote in his sponsor statement, available under documents on HB 102’s Alaska State Legislature website.

The concept of peer-to-peer car-sharing is like Airbnb: utilizing someone else’s privately-owned property with the compensation of money per day, booking the desired service through a website or mobile app. However, instead of opting to stay in someone’s guest bedroom for a couple of nights instead of a major hotel, car-sharing customers are renting someone’s RAV4 or minivan for the week instead of renting from a major car rental company. This allows someone who has an unused vehicle to earn some extra cash by “sharing” it.

Turo, a San Francisco-based company, is one example of a car-sharing business. Ethan Wilson, a representative of Turo, was present at the House Labor and Commerce Committee’s hearing on HB 102 in Juneau on April 8. Wilson gave testimony at the hearing to express Turo’s opposition to the bill.

“We find it frustrating that the proponents of this bill have kept the peer-to-peer car-sharing industry in the dark. Alaska is just the latest attempt, or experiment, to stuff peer-to-peer car-sharing into a box of antiquated, complex and corporately manipulated regulation and taxation,” Wilson said during his testimony.

Turo does not own any of the cars available to customers. They are only the platform that allows people to offer their cars for rent. However, they do take about 25 percent of the revenue made per transaction, according to Wilson. Turo has a presence in Alaska cities like Anchorage, Fairbanks and Juneau, with approximately 700 Alaskan hosts. Wilson did not have numbers for the gross revenue that Alaskans received from Turo, but said that, on average, monthly income for Turo hosts was about $300.

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Wilson stated that Turo is not “anti-tax,” but rather willing to work out a “taxation framework,” or appropriate and fair car-sharing businesses like theirs. He called Turo’s transactions “inherently different” — as it is people sharing their own, personal vehicle— than what is offered at a standard car rental. Similar to Turo, other peer-to-peer car sharing platforms and apps include Getaround, car2go and Zipcar.

Brian Rothery is vice president of government and public affairs for Enterprise Holdings, the company that operates Enterprise, Alamo and National car rental companies. Rothery gave testimony in support of HB 102 via phone call at the Committee’s recent April 15 teleconference meeting.

“We view this as a new source of supply into an existing market,” Rothery said of car-sharing platforms that are purely digital, during the teleconference.

Rothery, later on, commented that there’s “nothing wrong” with car-sharing platforms, but rather hopes to see a set of rules embraced, fair for all companies who are competing for customers.

The April 17 hearing for HB102 was canceled. The next scheduled hearing was on Monday, April 22.