Florida Governor Kills New Rental Car Excise Tax

June 27, 2006

Download Gov. Bush S.B. 1350 Veto Order

In a rare stumbling block toward the growth of special excise taxes on car rentals, Florida Gov. Jeb Bush today vetoed a controversial $2 per day rental car tax passed by the Florida legislature earlier this year.

In his veto message, he specifically notes that lawmakers crafted the tax to target outside visitors—what economists call “tax exporting.” For that reason alone, the tax fails to satisfy even the most basic criteria for good policy. From The Ledger:

Gov. Jeb Bush vetoed a bill Tuesday that would have allowed counties to double a daily $2 surcharge on car rentals with approval from local voters…

“While I appreciate the inclusion of voter approval as a prerequisite to implementing the new tax, these taxes will be paid disparately by tourists visiting Florida, consequently creating taxation without representation,” Bush wrote in his veto message. “Philosophically, I cannot support this.”

Bush acknowledged that the bill also contained revisions to state fiscal policies and requirements designed to address rising costs of transportation needs and improve the level of competition among road contractors.

“Although these are important to the state’s infrastructure needs, I cannot overlook the bill’s provision that gives counties the option to impose a $2 per day tax on rental cars, if approved by countywide referendum,” Bush wrote. (Full piece here.)

You can read Gov. Bush’s full veto order here (PDF).

The controversial $2 per day Florida tax was supported by many of Gov. Bush’s fellow Republicans, making his veto all the more surprising.

In previous posts, we’re repeatedly made the case against special discriminatory taxes on the rental car industry. For our full case against them, see here, here and here.

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