Court Opinion

ID: 3260400
Source: CourtListenerOpinion
Date Created: 2016-07-05 16:31:58.462303+00
Date Added: 2024-06-11T13:11:38.379890
License: Public Domain

The Honorable Bud Canada State Senator Post Office Box 2210 Hot Springs, Arkansas 71914
Dear Senator Canada:
This is in response to your request for an opinion concerning "privilege fees" imposed by municipal airports that are based upon a rental car agency's gross receipts. More specifically, you have presented the following question:
  Is there any law in the State of Arkansas that would prohibit a rental car agency from passing on these privilege fees or taxes (whatever they are) to its lessees if the contract between the rental car agency and the lessee discloses that part of the monies being paid by the lessee are to defray such expenses?
As you noted in your letter, in Opinion No. 95-100 (copy enclosed) I opined that "a charge imposed by an airport commission (or by a county or municipality) based upon a payor's gross receipts would likely be deemed to be a tax rather than a fee." Further, I opined that municipalities and airport commissions did not have the authority to impose a charge based upon the gross receipts received by a vehicle rental company "[b]ecause there is no statutory authority to levy a discrete tax on gross receipts arising from vehicle rentals, and because such a charge likely would be deemed to be a tax rather than a fee." Thus, because there is no authority for a municipality or airport commission to impose such a tax, I cannot render an opinion on whether a rental car agency may pass on such a tax to its customers.1
The foregoing opinion, which I hereby approve, was prepared by Assistant Attorney General Warren T. Readnour.
Sincerely,
WINSTON BRYANT Attorney General
WB:WTR/cyh
1 It should, however, be noted that if a municipality or airport commission is simply charging the rental car agency a valid fee for the use of airport facilities, see Op. Att'y Gen. 95-100, then, under state law, the question of whether the rental car agency may pass on this cost to the lessees of the vehicles by either including the charge in the general cost of the rental or separately stating the charge on the rental contract appears to be a matter of contract between the parties involved.