II 

114TH CONGRESS 

1ST SESSION S. 1164 

To protect consumers from discriminatory State taxes on motor vehicle 

rentals. 

IN THE SENATE OF THE UNITED STATES 

APRIL 30, 2015 

Mr. KIRK (for himself, Mr. BLUMENTHAL, Mr. BLUNT, Mr. MORAN, and Mr. 

ROBERTS) introduced the following bill; which was read twice and referred to the Committee on Finance 

A BILL 

To protect consumers from discriminatory State taxes on 

motor vehicle rentals. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘End Discriminatory 

5 State Taxes for Automobile Renters Act of 2015’’. 

6 SEC. 2. FINDINGS; PURPOSE. 

7 (a) FINDINGS.—Congress finds the following: 

8 (1) Congress has prohibited economic protec9 tionism by State and local governments that unduly 

10 burden or discriminate against interstate commerce 


smartinez on DSK4TPTVN1PROD with BILLS
2 

•S 1164 IS

1 and transportation under the authority granted by 

2 the Commerce Clause of the Constitution by enact3 ing laws such as the Railroad Revitalization and 

4 Regulatory Reform Act of 1976, the Motor Carrier 

5 Act of 1980, the Bus Regulatory Reform Act of 

6 1982, and the Airport and Airway Improvement Act 

7 of 1982. 

8 (2) In Gibbons v. Ogden, (22 U.S. 1 (1824)), 

9 a case challenging the exclusive right of navigating 

10 the waters of New York granted by that State, the 

11 Supreme Court affirmed that it is the sole right of 

12 Congress to regulate commerce between the States 

13 under what Chief Justice John Marshall recognized 

14 as the dormant Commerce Clause. 

15 (3) Since 1990, over 100 discriminatory taxes 

16 have been imposed by State and local governments 

17 on motor vehicle rentals in violation of the dormant 

18 Commerce Clause. 

19 (b) PURPOSE.—The purpose of this Act is to prohibit 

20 prospectively, and provide a remedy for, tax discrimination 

21 by a State or Locality against the rental of motor vehicles. 

22 SEC. 3. PROHIBITION ON DISCRIMINATION. 

23 (a) IN GENERAL.—Chapter 805 of title 49, United 

24 States Code, is amended by adding at the end the fol25 lowing new section: 


smartinez on DSK4TPTVN1PROD with BILLS
3 

•S 1164 IS

1 ‘‘SEC. 80505. TAX DISCRIMINATION AGAINST MOTOR VEHI2 CLE RENTAL PROPERTY. 

3 ‘‘(a) DEFINITIONS.—In this section: 

4 ‘‘(1) ASSESSMENT AND ASSESSMENT JURISDIC5 TION.— 

6 ‘‘(A) ASSESSMENT.—The term ‘assess7 ment’ has the meaning given that term in sec8 tion 11501(a)(1). 

9 ‘‘(B) ASSESSMENT JURISDICTION.—The 

10 term ‘assessment jurisdiction’ has the meaning 

11 given that term in section 11501(a)(2). 

12 ‘‘(2) COMMERCIAL AND INDUSTRIAL PROP13 ERTY.—The term ‘commercial and industrial prop14 erty’ means property, other than motor vehicle rent15 al property and land used primarily for agricultural 

16 purposes or timber growing, which is devoted to a 

17 commercial or industrial use. 

18 ‘‘(3) COMMERCIAL AND INDUSTRIAL TAX19 PAYERS.—The term ‘other commercial and indus20 trial taxpayers’ means persons or entities who are 

21 engaged in a trade or business, other than the trade 

22 or business of renting motor vehicles, within a State 

23 or Locality. 

24 ‘‘(4) COVERED PERSON.—The term ‘covered 

25 person’ means a person who— 


smartinez on DSK4TPTVN1PROD with BILLS
4 

•S 1164 IS

1 ‘‘(A) rents motor vehicles to another per2 son; 

3 ‘‘(B) is engaged in the business of renting 

4 motor vehicles; 

5 ‘‘(C) owns motor vehicle rental property; 

6 ‘‘(D) rents a motor vehicle from another 

7 person; or 

8 ‘‘(E) purchases motor vehicle rental prop9 erty. 

10 ‘‘(5) DISCRIMINATORY TAX.—The term ‘dis11 criminatory tax’ includes the following: 

12 ‘‘(A) A tax discriminates against the rental 

13 of motor vehicles if a State or Locality imposes 

14 the tax on, or with respect to— 

15 ‘‘(i) the rental of motor vehicles but 

16 the tax is not a generally applicable tax on, 

17 or with respect to, more than 51 percent of 

18 the rentals of other tangible personal prop19 erty within the State or Locality; or 

20 ‘‘(ii) the rental of motor vehicles at a 

21 tax rate that exceeds the generally applica22 ble tax rate on at least 51 percent of the 

23 rentals of other tangible personal property 

24 within the same State or Locality. 


smartinez on DSK4TPTVN1PROD with BILLS
5 

•S 1164 IS

1 ‘‘(B) A tax discriminates against the busi2 ness of renting motor vehicles if a State or Lo3 cality imposes the tax on, or with respect to— 

4 ‘‘(i) the business of renting motor ve5 hicles but the tax is not a generally appli6 cable tax on, or with respect to, more than 

7 51 percent of the businesses of other com8 mercial and industrial taxpayers within the 

9 State or Locality, on the same tax base as 

10 the State or Locality employs with respect 

11 to the business of renting motor vehicles; 

12 or 

13 ‘‘(ii) the business of renting motor ve14 hicles at a tax rate that exceeds the gen15 erally applicable tax rate on at least 51 

16 percent of the business of commercial and 

17 industrial taxpayers within the State or 

18 Local jurisdiction. 

19 ‘‘(C) A tax discriminates against motor ve20 hicle rental property if a State or Locality— 

21 ‘‘(i) assesses motor vehicle rental 

22 property at a value that has a higher ratio 

23 to the true market value of the property 

24 than the ratio of the assessed value to the 

25 true market value applicable to commercial 


smartinez on DSK4TPTVN1PROD with BILLS
6 

•S 1164 IS

1 and industrial property in the same assess2 ment jurisdiction; 

3 ‘‘(ii) levies or collects a tax on an as4 sessment that may not be made under 

5 clause (i); or 

6 ‘‘(iii) levies or collects an ad valorem 

7 property tax on motor vehicle rental prop8 erty at a generally applicable tax rate that 

9 exceeds the tax rate applicable to commer10 cial and industrial property in the same as11 sessment jurisdiction. 

12 ‘‘(6) LOCAL OR LOCALITY.—The terms ‘Local’ 

13 and ‘Locality’ mean a political subdivision of any 

14 State, or any governmental entity or person acting 

15 on behalf of such Locality, with the authority to im16 pose, levy, or collect taxes. 

17 ‘‘(7) MOTOR VEHICLE.—The term ‘motor vehi18 cle’ has the meaning given that term in section 

19 13102(16). 

20 ‘‘(8) MOTOR VEHICLE RENTAL PROPERTY.— 

21 The term ‘motor vehicle rental property’ means 

22 property owned or used by a person engaged in the 

23 business of renting motor vehicles and used to pro24 vide rentals of motor vehicles. 


smartinez on DSK4TPTVN1PROD with BILLS
7 

•S 1164 IS

1 ‘‘(9) RENTAL OF MOTOR VEHICLES.—The term 

2 ‘rental of motor vehicles’ means the rental of a 

3 motor vehicle that is given by the owner of the 

4 motor vehicle for exclusive use to another for not 

5 longer than 180 days for valuable consideration and 

6 only includes the rental of motor vehicles with a pre7 arranged driver or motor vehicles without a driver, 

8 but shall not include taxi cab service as defined by 

9 section 13102(22). 

10 ‘‘(10) RENTALS OF OTHER TANGIBLE PER11 SONAL PROPERTY.—The term ‘rentals of other tan12 gible personal property’ means any rental of tangible 

13 personal property, other than the rental of motor ve14 hicles. 

15 ‘‘(11) STATE.—The term ‘State’ means any of 

16 the several States, the District of Columbia, or any 

17 territory or possession of the United States, or any 

18 governmental entity or person acting on behalf of 

19 such State, and with the authority to impose, levy, 

20 or collect taxes. 

21 ‘‘(12) TAX.—Except as otherwise specifically 

22 provided below, the term ‘tax’ means any type of 

23 charge required by statute, regulation, or agreement 

24 to be paid or furnished to a State or Locality, re25 gardless of whether such charge is denominated as 


smartinez on DSK4TPTVN1PROD with BILLS
8 

•S 1164 IS

1 a tax, a fee, or any other type of exaction. The term 

2 ‘tax’ does not include any charge imposed by a State 

3 or Locality with respect to a concession agreement 

4 at a Federally assisted airport (provided the agree5 ment does not violate the revenue diversion provi6 sions of section 47107(b), or the registration, licens7 ing, or inspection of motor vehicles), if the charge is 

8 imposed generally with respect to motor vehicles, 

9 without regard to whether such vehicles are used in 

10 the business of renting motor vehicles within the 

11 State or Locality. 

12 ‘‘(13) TAX BASE.—The term ‘tax base’ means 

13 the receipts, income, value, weight, or other measure 

14 of a tax to which the rate is applied. The ‘tax base’ 

15 of a tax imposed on a per unit basis is the unit. 

16 ‘‘(14) GENERALLY APPLICABLE TAX.—The 

17 term ‘generally applicable tax’ may be determined 

18 by— 

19 ‘‘(A) the gross receipts of rentals of other 

20 tangible personal property or other commercial 

21 and industrial taxpayers within the State or Lo22 cality to which the tax is imposed by the State 

23 or Locality compared to the gross receipts of 

24 rentals of other tangible personal property or 


smartinez on DSK4TPTVN1PROD with BILLS
9 

•S 1164 IS

1 other commercial and industrial taxpayers with2 in the State or Locality; or 

3 ‘‘(B) another method used to determine 

4 whether more than 51 percent of rentals of 

5 other tangible personal property or other com6 mercial and industrial taxpayers is subject to 

7 the tax. 

8 ‘‘(b) UNREASONABLE BURDENS AND DISCRIMINA9 TION AGAINST INTERSTATE COMMERCE.— 

10 ‘‘(1) IN GENERAL.—The following acts unrea11 sonably burden and discriminate against interstate 

12 commerce, and a State or Locality may not do any 

13 of them: 

14 ‘‘(A) Levy or collect a discriminatory tax 

15 on the rental of motor vehicles. 

16 ‘‘(B) Levy or collect a discriminatory tax 

17 on the business of renting motor vehicles. 

18 ‘‘(C) Levy or collect a discriminatory tax 

19 on motor vehicle rental property. 

20 ‘‘(2) EXCLUSION.—Discriminatory taxes are 

21 not prohibited under this section if the tax is im22 posed as of the date of the enactment of this section, 

23 does not lapse, the tax rate does not increase, and 

24 the tax base for such tax does not change. 

25 ‘‘(c) REMEDIES.— 


smartinez on DSK4TPTVN1PROD with BILLS
10 

•S 1164 IS

1 ‘‘(1) IN GENERAL.—Notwithstanding section 

2 1341 of title 28, a covered person aggrieved of a vio3 lation of subsection (b) may bring a civil action in 

4 a district court of the United States seeking dam5 ages, injunctive relief, other legal or equitable relief, 

6 or declaratory relief. 

7 ‘‘(2) RELIEF.—In granting relief against a tax 

8 levied or collected in violation of subsection (b), if 

9 the tax is a discriminatory tax the court shall strike 

10 only the discriminatory or excessive portion of the 

11 tax. 

12 ‘‘(3) BURDEN OF PROOF.— 

13 ‘‘(A) IN GENERAL.—Except as provided in 

14 subparagraph (B), a covered person shall have 

15 the burden of proving, by a preponderance of 

16 the evidence, that the levying or collecting of a 

17 tax violates subsection (b). 

18 ‘‘(B) EQUIVALENT OF OTHER TAXES.—If 

19 the court determines that the levying or col20 lecting of a tax violates subsection (b), the 

21 State or Locality shall have the burden of prov22 ing, by a preponderance of the evidence, that 

23 the tax is the equivalent of a tax imposed on 

24 other commercial and industrial taxpayers 

25 under paragraph (2). 


smartinez on DSK4TPTVN1PROD with BILLS
11 

•S 1164 IS

1 ‘‘(4) OTHER REMEDIES.—Nothing in this sub2 section shall limit any cause of action or remedy 

3 available under any other provision of Federal or 

4 State law. 

5 ‘‘(d) LIMITATIONS.—This section shall not be con6 strued to constitute the consent of Congress to State or 

7 Local taxation that would be prohibited in the absence of 

8 this section.’’. 

9 (b) CLERICAL AMENDMENT.—The table of sections 

10 for chapter 805 of title 49, United States Code, is amend11 ed by inserting after the item relating to section 80504 

12 the following: 

‘‘80505. Rules relating to State taxation with respect to automobile rentals.’’. 

Æ 


smartinez on DSK4TPTVN1PROD with BILLS