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San Mateo County Rental Car Taxes Defeated at Ballot Box

1 min readBy: Joseph Bishop-Henchman

A reader points us to two ballot initiatives hiking taxes on parking lots and rental cars in San Mateo County, California that failed on Tuesday. Measure Q would have imposed an 8% gross receipts taxA gross receipts tax, also known as a turnover tax, is applied to a company’s gross sales, without deductions for a firm’s business expenses, like costs of goods sold and compensation. Unlike a sales tax, a gross receipts tax is assessed on businesses and apply to business-to-business transactions in addition to final consumer purchases, leading to tax pyramiding. on commercial parking facilities (San Francisco International Airport is located in San Mateo County), which failed by a vote of 47.9% to 52.1%. Measure R would have imposed a 2.5% gross receipts taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. on rental cars, but failed 47.5% to 52.5%. The county hoped to use the $28 million raised by the taxes to close its budget shortfall.

Excise taxAn excise tax is a tax imposed on a specific good or activity. Excise taxes are commonly levied on cigarettes, alcoholic beverages, soda, gasoline, insurance premiums, amusement activities, and betting, and typically make up a relatively small and volatile portion of state and local and, to a lesser extent, federal tax collections. es like taxes on rental cars are increasingly used as a way to shift punitive tax burdens to non-constituents like tourists. This is dangerous because it allows people to consume more government than they are willing to pay for, and assume incorrectly that there is such a thing as a free lunch. If San Mateo County’s taxes aren’t enough to cover the spending San Mateo County citizens want, they should either be willing to raise broad-based taxes on everyone or cut spending.

After all, we’re all tourists to everyone else, and if everyone shifts huge taxes to tourists, we all pay in the end.