Title: End Discriminatory State Taxes for Automobile Renters Act of 2017
Policy area: Taxation

Summary:
End Discriminatory State Taxes for Automobile Renters Act of 2017
This bill prohibits state or local taxes that discriminate against the rental of motor vehicles, the business of renting motor vehicles, or motor vehicle rental property, except where such tax is imposed as of the enactment date of this bill, the tax does not lapse, the tax rate does not increase, and the tax base for such tax does not change.
A tax that is imposed on the rental of motor vehicles or a motor vehicle rental business is discriminatory if: (1) it is not generally applicable to more than 51% of other rentals of tangible personal property or businesses within a state or locality on the same tax base as the state or locality employs respect to the business of renting motor vehicles, or (2) the rate exceeds the generally applicable tax rate on at least 51% of the other rentals of tangible personal property or businesses within the jurisdiction.
A tax discriminates against motor vehicle rental property if a state or locality: (1) assesses the property at a value that has a higher ratio to the true market value of the property than the ratio applicable to commercial and industrial property, or (2) levies or collects either a tax on an assessment prohibited by this bill or an ad valorem property tax on motor vehicle rental property at a generally applicable rate that exceeds the rate for commercial and industrial property in the jurisdiction.
A person who is aggrieved by a discriminatory tax may bring a civil action in a U.S. district court for damages, injunctive relief, other legal or equitable relief, or declaratory relief.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 1159 Introduced in Senate (IS)]

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115th CONGRESS
  1st Session
                                S. 1159

 To protect consumers from discriminatory State taxes on motor vehicle 
                                rentals.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 17, 2017

  Mr. Blunt (for himself, Mr. Blumenthal, Mr. Roberts, and Mr. Moran) 
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.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``End Discriminatory State Taxes for 
Automobile Renters Act of 2017''.

SEC. 2. FINDINGS; PURPOSE.

    (a) Findings.--Congress finds the following:
            (1) Congress has prohibited economic protectionism by State 
        and local governments that unduly burden or discriminate 
        against interstate commerce and transportation under the 
        authority granted by the Commerce Clause of the Constitution by 
        enacting laws such as the Railroad Revitalization and 
        Regulatory Reform Act of 1976, the Motor Carrier Act of 1980, 
        the Bus Regulatory Reform Act of 1982, and the Airport and 
        Airway Improvement Act of 1982.
            (2) In Gibbons v. Ogden (22 U.S. 1 (1824)), a case 
        challenging the exclusive right of navigating the waters of New 
        York granted by that State, the Supreme Court affirmed that it 
        is the sole right of Congress to regulate commerce between the 
        States under what Chief Justice John Marshall recognized as the 
        dormant Commerce Clause.
            (3) Since 1990, over 100 discriminatory taxes have been 
        imposed by State and local governments on motor vehicle rentals 
        in violation of the dormant Commerce Clause.
    (b) Purpose.--The purpose of this Act is to prohibit prospectively, 
and provide a remedy for, tax discrimination by a State or Locality 
against the rental of motor vehicles.

SEC. 3. PROHIBITION ON DISCRIMINATION.

    (a) In General.--Chapter 805 of title 49, United States Code, is 
amended by adding at the end the following new section:

``SEC. 80505. TAX DISCRIMINATION AGAINST MOTOR VEHICLE RENTAL PROPERTY.

    ``(a) Definitions.--In this section:
            ``(1) Assessment and assessment jurisdiction.--
                    ``(A) Assessment.--The term `assessment' has the 
                meaning given that term in section 11501(a)(1).
                    ``(B) Assessment jurisdiction.--The term 
                `assessment jurisdiction' has the meaning given that 
                term in section 11501(a)(2).
            ``(2) Commercial and industrial property.--The term 
        `commercial and industrial property' means property, other than 
        motor vehicle rental property and land used primarily for 
        agricultural purposes or timber growing, which is devoted to a 
        commercial or industrial use.
            ``(3) Commercial and industrial taxpayers.--The term `other 
        commercial and industrial taxpayers' means persons or entities 
        who are engaged in a trade or business, other than the trade or 
        business of renting motor vehicles, within a State or Locality.
            ``(4) Covered person.--The term `covered person' means a 
        person who--
                    ``(A) rents motor vehicles to another person;
                    ``(B) is engaged in the business of renting motor 
                vehicles;
                    ``(C) owns motor vehicle rental property;
                    ``(D) rents a motor vehicle from another person; or
                    ``(E) purchases motor vehicle rental property.
            ``(5) Discriminatory tax.--The term `discriminatory tax' 
        includes the following:
                    ``(A) A tax discriminates against the rental of 
                motor vehicles if a State or Locality imposes the tax 
                on, or with respect to--
                            ``(i) the rental of motor vehicles but the 
                        tax is not a generally applicable tax on, or 
                        with respect to, more than 51 percent of the 
                        rentals of other tangible personal property 
                        within the State or Locality; or
                            ``(ii) the rental of motor vehicles at a 
                        tax rate that exceeds the generally applicable 
                        tax rate on at least 51 percent of the rentals 
                        of other tangible personal property within the 
                        same State or Locality.
                    ``(B) A tax discriminates against the business of 
                renting motor vehicles if a State or Locality imposes 
                the tax on, or with respect to--
                            ``(i) the business of renting motor 
                        vehicles but the tax is not a generally 
                        applicable tax on, or with respect to, more 
                        than 51 percent of the businesses of other 
                        commercial and industrial taxpayers within the 
                        State or Locality, on the same tax base as the 
                        State or Locality employs with respect to the 
                        business of renting motor vehicles; or
                            ``(ii) the business of renting motor 
                        vehicles at a tax rate that exceeds the 
                        generally applicable tax rate on at least 51 
                        percent of the business of commercial and 
                        industrial taxpayers within the State or Local 
                        jurisdiction.
                    ``(C) A tax discriminates against motor vehicle 
                rental property if a State or Locality--
                            ``(i) assesses motor vehicle rental 
                        property at a value that has a higher ratio to 
                        the true market value of the property than the 
                        ratio of the assessed value to the true market 
                        value applicable to commercial and industrial 
                        property in the same assessment jurisdiction;
                            ``(ii) levies or collects a tax on an 
                        assessment that may not be made under clause 
                        (i); or
                            ``(iii) levies or collects an ad valorem 
                        property tax on motor vehicle rental property 
                        at a generally applicable tax rate that exceeds 
                        the tax rate applicable to commercial and 
                        industrial property in the same assessment 
                        jurisdiction.
            ``(6) Local or locality.--The terms `Local' and `Locality' 
        mean a political subdivision of any State, or any governmental 
        entity or person acting on behalf of such Locality, with the 
        authority to impose, levy, or collect taxes.
            ``(7) Motor vehicle.--The term `motor vehicle' has the 
        meaning given that term in section 13102(16).
            ``(8) Motor vehicle rental property.--The term `motor 
        vehicle rental property' means property owned or used by a 
        person engaged in the business of renting motor vehicles and 
        used to provide rentals of motor vehicles.
            ``(9) Rental of motor vehicles.--The term `rental of motor 
        vehicles' means the rental of a motor vehicle that is given by 
        the owner of the motor vehicle for exclusive use to another for 
        not longer than 180 days for valuable consideration and only 
        includes the rental of motor vehicles with a prearranged driver 
        or motor vehicles without a driver, but shall not include taxi 
        cab service as defined by section 13102(22).
            ``(10) Rentals of other tangible personal property.--The 
        term `rentals of other tangible personal property' means any 
        rental of tangible personal property, other than the rental of 
        motor vehicles.
            ``(11) State.--The term `State' means any of the several 
        States, the District of Columbia, or any territory or 
        possession of the United States, or any governmental entity or 
        person acting on behalf of such State, and with the authority 
        to impose, levy, or collect taxes.
            ``(12) Tax.--Except as otherwise specifically provided 
        below, the term `tax' means any type of charge required by 
        statute, regulation, or agreement to be paid or furnished to a 
        State or Locality, regardless of whether such charge is 
        denominated as a tax, a fee, or any other type of exaction. The 
        term `tax' does not include any charge imposed by a State or 
        Locality with respect to a concession agreement at a federally 
        assisted airport (provided the agreement does not violate the 
        revenue diversion provisions of section 47107(b), or the 
        registration, licensing, or inspection of motor vehicles), if 
        the charge is imposed generally with respect to motor vehicles, 
        without regard to whether such vehicles are used in the 
        business of renting motor vehicles within the State or 
        Locality.
            ``(13) Tax base.--The term `tax base' means the receipts, 
        income, value, weight, or other measure of a tax to which the 
        rate is applied. The `tax base' of a tax imposed on a per unit 
        basis is the unit.
            ``(14) Generally applicable tax.--The term `generally 
        applicable tax' may be determined by--
                    ``(A) the gross receipts of rentals of other 
                tangible personal property or other commercial and 
                industrial taxpayers within the State or Locality to 
                which the tax is imposed by the State or Locality 
                compared to the gross receipts of rentals of other 
                tangible personal property or other commercial and 
                industrial taxpayers within the State or Locality; or
                    ``(B) another method used to determine whether more 
                than 51 percent of rentals of other tangible personal 
                property or other commercial and industrial taxpayers 
                is subject to the tax.
    ``(b) Unreasonable Burdens and Discrimination Against Interstate 
Commerce.--
            ``(1) In general.--The following acts unreasonably burden 
        and discriminate against interstate commerce, and a State or 
        Locality may not do any of them:
                    ``(A) Levy or collect a discriminatory tax on the 
                rental of motor vehicles.
                    ``(B) Levy or collect a discriminatory tax on the 
                business of renting motor vehicles.
                    ``(C) Levy or collect a discriminatory tax on motor 
                vehicle rental property.
            ``(2) Exclusion.--Discriminatory taxes are not prohibited 
        under this section if the tax is imposed as of the date of the 
        enactment of this section, does not lapse, the tax rate does 
        not increase, and the tax base for such tax does not change.
    ``(c) Remedies.--
            ``(1) In general.--Notwithstanding section 1341 of title 
        28, a covered person aggrieved of a violation of subsection (b) 
        may bring a civil action in a district court of the United 
        States seeking damages, injunctive relief, other legal or 
        equitable relief, or declaratory relief.
            ``(2) Relief.--In granting relief against a tax levied or 
        collected in violation of subsection (b), if the tax is a 
        discriminatory tax the court shall strike only the 
        discriminatory or excessive portion of the tax.
            ``(3) Burden of proof.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), a covered person shall have the 
                burden of proving, by a preponderance of the evidence, 
                that the levying or collecting of a tax violates 
                subsection (b).
                    ``(B) Equivalent of other taxes.--If the court 
                determines that the levying or collecting of a tax 
                violates subsection (b), the State or Locality shall 
                have the burden of proving, by a preponderance of the 
                evidence, that the tax is the equivalent of a tax 
                imposed on other commercial and industrial taxpayers 
                under paragraph (2).
            ``(4) Other remedies.--Nothing in this subsection shall 
        limit any cause of action or remedy available under any other 
        provision of Federal or State law.
    ``(d) Limitations.--This section shall not be construed to 
constitute the consent of Congress to State or Local taxation that 
would be prohibited in the absence of this section.''.
    (b) Clerical Amendment.--The table of sections for chapter 805 of 
title 49, United States Code, is amended by inserting after the item 
relating to section 80504 the following:

``80505. Rules relating to State taxation with respect to automobile 
                            rentals.''.
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