Dunleavy vetoes tax breaks for Turo operators, leaving owners to collect rental car taxes themselves

The Alaska State Capitol successful Juneau, pictured May 6, 2024. (Eric Stone/Alaska Public Media)

Gov. Mike Dunleavy has vetoed a bipartisan measure that would person required peer-to-peer car rental apps to cod authorities excise taxes connected car owners’ behalf. Advocates opportunity Senate Bill 127, which besides included a taxation break for app-based rentals, would person made it harder for owners of vehicles connected Turo and akin platforms to skip retired connected their taxation bills.

A spokesperson for nan politician says Dunleavy vetoed nan measure connected Tuesday because “unnecessary taxation of a caller and increasing manufacture is bad nationalist policy.” The spokesperson, Jeff Turner, did not reply to a mobility seeking to explain his veto message, since nan measure would person successful truth reduced nan taxation connected app-based car rentals from 10% to 8%.

Sen. Matt Claman, D-Anchorage, said he worked intimately pinch Dunleavy’s Departments of Law and Revenue to hammer retired a woody that satisfied some Turo and accepted rental car companies.

“The situation was, nan existing taxation rule makes nan Turo proprietor responsible for collecting nan tax, and it wasn’t being collected,” Claman said by phone.

Deputy Revenue Commissioner Fadil Limani told nan Senate Transportation Committee astatine nan bill’s first proceeding successful April 2023 that nan measure wouldn’t enforce a caller taxation — it would simply explain who was responsible for sending nan costs to nan state. 

“Absent this legislation, nan Department of Revenue would person to spell fundamentally aft each individual taxation holder successful bid to beryllium capable to cod nan tax,” Limani said. “With this legislation, we would beryllium receiving that straight from nan sharing platform.”

Limani said immoderate 25 taxpayers, mostly car rental companies that had moved to Turo, were delinquent connected astir $470,000 successful rental car taxes — and that’s not counting an chartless number of further conveyance owners who person grounded to support up pinch their taxation bills. The measure would not person been retroactive, which intends existing Turo owners would not person been penalized for missing past taxation payments.

The measure is akin to efforts astatine nan section level crossed Alaska and astir nan state requiring online merchants for illustration Amazon to cod income taxes. That followed a 2018 U.S. Supreme Court ruling that allowed states and municipalities to require online vendors without a beingness beingness to cod income taxes. Before that, consumers were responsible for paying income taxes to their states and localities astatine nan extremity of nan year, and galore did not.