As the president and CEO of the Arizona Tourism & Lodging Association, I want to ensure that we cultivate a business environment where all of our state’s leading industry partners have a fair opportunity to succeed, which is why I am supporting SB1305.
SB1305 would ensure that no single entity has an unfair competitive advantage within the car rental industry. Peer-to-peer car rental companies like Turo and Getaround want the ability to rent out vehicles, a tangible product, without paying certain excise and transactional taxes that other similar companies are required to pay. But allowing certain businesses to avoid paying taxes is essentially picking winners and losers, which creates a very real threat to maintaining and promoting one of our greatest economic drivers: tourism.
Tourism dollars and fees on hotel stays and car rental transactions help to significantly fund promotional activities that allow us to attract and retain both visitors and business decision-makers from across the country and around the world to visit our beautiful state. In fact, tourism is the only industry to have a positive impact in all 15 Arizona counties.
This industry fuels the economy providing for nearly a quarter of the state’s general fund, bringing in $22.7 billion a year in direct visitor spending, resulting in more than $3.3 billion in tax revenues and supporting more than 300,000 quality statewide jobs.
Additionally, voters have approved excise and transactional revenues to support the Cactus League and its facilities, and the building of State Farm Stadium, home to the Arizona Cardinals, the Fiesta Bowl and two Super Bowls, understanding that large sporting events have a tremendously positive impact on our economy.
Some legislators recently compared economic disruptors like Turo and Getaround to Airbnb. And I assure you, this is an industry that welcomes competition – healthy competition–on a legal and level playing field. These startups are bucking the traditional business models and empowering a new brand of entrepreneurs. Arizona is a leader in this trend, and that is a good thing. Nevertheless, in 2016, the Legislature decided that the commercial transaction of renting a room or an entire house was the same as securing a hotel room, but passed legislation which was not-balanced, and has been working to correct the unintended consequences ever since. We learned an important lesson: various excise and transactional taxes should be assessed the same way for similar businesses.
It’s time for the budding peer-to-peer car rental industry to be formalized using the wisdom gained the past few years, and that is captured and evidenced within the model legislation of SB1305. Sen. David Livingston’s bipartisan bill takes away any unfair competitive advantages among peer-to-peer companies, embraces innovation and ensures tourism taxes are collected.
Arizona should do everything it can to encourage and foster economic disrupters and new business forces. But the state must do so by creating an even playing field. For people renting cars, it means passage of SB1305. This legislation is paramount to the future of our Cactus League, our competitiveness for attracting technology corporations, and to attracting global travelers to our great state of Arizona.
— Kim Sabow is the president and CEO of the Arizona Lodging and Tourism Association.