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Thursday, September 6, 2007

Flexcar Drivers to be Charged Rental-Car Tax

posted by on September 6 at 13:13 PM

This week, FlexCar put its members on notice that, starting October 1, they will have to pay the state-authorized rental car tax on top of the sales tax they already pay. That brings the total tax rate to 18.7 percent.

There are a lot of reasons this is completely unfair, several of which were enumerated in an e-mail to FlexCar members:

As you know, car-sharing provides a valuable alternative to personal car-ownership and fosters increased use of public transportation among local residents. It is also a membership-based organization, making it significantly different in function and structure from traditional car-rental.

The logic behind charging a rental-car tax is this: Rental cars, like hotels, are mostly used by people from out of town—people who don’t vote here and don’t spend their tax dollars locally. Itís a relatively uncontroversial way of funding city services, primarily convention and visitor services.

Carsharing is different. The vast majority of FlexCar members have made the often difficult and inconvenient decision to live without cars. They shouldn’t be penalized for good behavior. Unlike renting, carsharing produces quantifiable benefits. It provides an alternative to car ownership (whereas renting usually just supplements a car the driver already owns), takes cars off the road, reduces congestion, improves the climate, and reduces the total number of vehicle miles traveled in a city. To sign the petition to reinstate the carsharing exemption to the rental tax, go here.

RSS icon Comments

1

What's next, a tax on bus passes? FlexCar dues and fees should be tax DEDUCTIBLE, not taxed!

Posted by DOUG. | September 6, 2007 1:17 PM
2

I read this yesterday and AM PISSED OFF!!!! And the link to the petition is not working

Posted by Just Me | September 6, 2007 1:19 PM
3

Um, perhaps I'm being totally dense, but I can't find how to sign the petition following the link.

Posted by Tracy | September 6, 2007 1:19 PM
4

@1,
Right on. Make the scene, Doug!

Posted by Josh Feit | September 6, 2007 1:20 PM
5

Oh, blather. Businesses rents most Flex cars in all cities except Seattle.

They are a car rental outlet with a great system of neighbor hood access. My business uses them at least twice a week. And as a benefit, employees use them as they wish at the company expense ... moving, day trip and weekends.

Pay the tax.

It is a rapidly expanding totally privately owned company, mercy, mercy they should pay taxes.

They have lots of cars on the Hill, really sweet vs. trekking downtown.

Posted by GUEST | September 6, 2007 1:21 PM
6

Erica,
For starters, the tax on rental cars is in large part a funding mechanism for stadiums.

But where do you get off calling for yet another exemption for a tax? Revenue likes this goes for lots of important services, like meal programs, police service, etc. Further gutting the tax code is a mistake.

And finally, spare us the blather about the virtue of FlexCar. It's a for-profit company owned by AOL founder Steve Case.

People who drive a FlexCar are driving...a car!

Your logic would make some sense if you called for tax exemptions for taxis, which is another alternative to private ownership of a car.

Posted by Join the rest of the world, Erica | September 6, 2007 1:22 PM
7

Doug One - all rental expenses are business expense - hence - deductible.

They are a for profit business, why should they be subsidized?

Engage brains.

Posted by Doug two | September 6, 2007 1:24 PM
8

Does corporate welfare ring in thine ears.

Private corporate company, good idea, lots of profits, expanding all over America, charge a lot - but the genius - really handy, no wait self serve, and can pay by the hour, not the day.

Sure, all you good Republicans, demand they pay no taxes. You'll pay their share.

Sure.

Posted by Seattle Hippie | September 6, 2007 1:29 PM
9

What people in favor of the tax are saying is this "I own a car that I will never give up and if there is a chance that someone who has decided to forgo a vehicle and do something environmentally viable then they should be fucked in any way possible."

Still, with the tax which adds $20.00 a month onto your Flex Car bill (assuming the most common billing rate) it is still cheaper than paying for gas, insurance ect. And since there is a Flex Car 3 blocks from my house in Wedgewood I will be still using it.

Posted by Just Me | September 6, 2007 1:30 PM
10

Fuck that!!!!

Posted by Andrew | September 6, 2007 1:32 PM
11

Nifty though Flexcar may be, I don't see how it's significantly different than other car rental services. Out-of-town visitors in rental cars do spend tax dollars locally while they are in the area - they pay gas taxes and sales taxes like anyone else. I don't see how their contribution is necessarily disproportionate to their use, as compared to locals.

Furthermore, why is it assumed that rental cars should be primarily the domain of visitors, and not also an alternative to cars for locals who seldom need them? What would Budget or Hertz have to offer that would make their services sufficiently equivalent to Flexcar, and thus suddenly exempt from the tax?

Posted by tsm | September 6, 2007 1:34 PM
12

Um, it's not a petition asking that Flexcar be exempt from taxes. It's a petition asking that Flexcar members remain exempt from paying rental car tax ON TOP OF sales tax. So how is any information about Flexcar's profitability relevant?

Posted by Duh | September 6, 2007 1:35 PM
13

Haw! Haw! Haw! - Finally, a tax the liberals don't like. (Must be the End Times...)

Posted by You_Gotta_Be_Kidding_Me | September 6, 2007 1:37 PM
14

It sounds like the people in favor of the tax think that Flexcar will be paying it (except for Guest @ 5, who thiks that businesses are the main clients of FlexCar). My undesrtanding is that the owners of the for-profit FelxCar won't be affected - it's the clients/members of FlexCar who will be paying. And I have a hard time believing that those members are overwhelmingly businesses themselves.

I think this tax would definitely make FlexCar a less attractive option, especially considering the basis for car rental tax (the out-of-towner model).

Posted by genevieve | September 6, 2007 1:38 PM
15

@3: The petition has an extra period at the end of the link. Delete the period, and you'll be fine.

@Erica: Delete the period at the end of the link.

Posted by Christin | September 6, 2007 1:39 PM
16

@14 - "I think this tax would definitely make FlexCar a less attractive option"

Relative to what? Buying a car? I don't think the tax will significantly change the cost calculations for most non-car owners. It may make Flexcar membership less appealing than occasionally renting a car from another rental service instead, but I honestly don't see how that qualifies as a problem.

Posted by tsm | September 6, 2007 1:42 PM
17

#9 - good remarks.

Another business user, we deliver using flex cars. Fast, can be on the road in 5 minutes, often one hour only.

Cheaper and more sure than the bicycle guys.

Since they pay gas and no insurance add on, all the better.

Cars are often dirty, well mussy.

They are fussy about drives since they pay insurance.

In Green Seattle, they have some individual accounts. Elsewhere, almost all business.

I like their service, for profit business need to pay their taxes.

Posted by Grunfeld | September 6, 2007 1:44 PM
18

I would like to sign the petition online as well, but also had difficulty in doing so with the link provided.

I found the working link http://www.petitiononline.com/carshare/petition.html

thanks to http://radar.planetizen.com/node/54424

Posted by Matt M | September 6, 2007 1:44 PM
19

# 14

I was not making a guess - before I signed up, had some friendly long conversations with their staff.

Wanted to buy some of the stock, not for sale. Not a public company.

The tax will be inconsequential to users. Another couple of bucks for a couple of hours.

Last minute day rentals downtown, Hertz, Avis, etc. can push 100.00.

Posted by GUEST | September 6, 2007 1:52 PM
20

Yeah, the purpose of the rental car tax (like the hotel tax) was to soak tourists for revenue. Flexcar needs to work on getting an exemption pronto because, IMHO, Flexcar is a mighty pricey alternative as it stands now.

Does the state impose a rental tax on moving vans like Penske and U-Haul? Flexcar seems to be more in that vein than in the Hertz/Avis/Dollar/Alamo/Thrifty type of rental.

Posted by Bauhaus | September 6, 2007 2:04 PM
21

There's a lot of ignorance on this thread.

First, I doubt the hippie with the grocery bags or the couple with the IKEA table getting out of FlexCars in my neighborhood are using it for "business" purposes.

Second, FlexCar members pay sales tax.

Third, walk-up last minute car rentals in Seattle cost around $40 (not $100) meaning $7 is being paid in taxes on that car. Meanwhile a single FlexCar that is used for 12 hours a day (not uncommon) pays closer to $22 a day in taxes.

Doug Two @7: All rental expenses are business expenses? You embarrass my good name!

Posted by DOUG. | September 6, 2007 2:14 PM
22

"Doug One - all rental expenses are business expense - hence - deductible."

How d'ya figure? An awful lot of car rentals are tourists, not business travelers.

Posted by Fnarf | September 6, 2007 2:17 PM
23

So sorry - you have for sure not rented many cars. I have not owned a car in ten years , not does my business own. We rent.
I rent.

Quite expert from EXPERIENCE.

If I rent for business purpose, whatever the cost, it is a business deduction, and a few bucks more will change nothing.

Two, at times in this city, rental cars via th reg. Avis, Hertz are not even possible. Sold out. Walk up full size can run 100.00.

Our Flex car tab is about a grand a month, but, then you know more than I.

Three you are kinda a rude son of a bitch. Un like most posters, a snarmy know it all.

Posted by Doug two | September 6, 2007 2:25 PM
24

"Three you are kinda a rude son of a bitch. Un like most posters, a snarmy know it all."

Well, they don't know it ALL, but at least they know a thing or two about spelling and grammar.

Posted by Hernandez | September 6, 2007 2:35 PM
25

oh mommie, teacher is here. He enters, the august Mr. Hernandez.

"Well, dear mother, your kid can't go to Oxford, just lacks perfect English on the Slogggggg"

So sad, I was gonna take my Flex car to Oxford.

Posted by Doug two | September 6, 2007 2:46 PM
26

Just take a helicopter and drop a flex car on one of the unnecessary stadiums.

Problem solved.

Go Sonics! ... Go long! ... Keep traveling ! ... (until they get to Oklahoma, land of the Big Suckers)

Posted by Will in Seattle | September 6, 2007 2:54 PM
27

currently the privately owned flexcar is subsidized by the county (metro) and the city (parking spots).

it would seem that flexcar does little to reduce driving but rather increases available parking to regular drivers. instead of maybe 10 cars flexcar users share 1 therefore 9 extra parking spots for car owners. ECB probably helped the environment more by owning a car that took up a parking spot than by joining FC and driving around in a Mini when not kidnapped to WS.

the rental car tax is a rip-off for everybody but if it makes people drive less isn't that good?

Posted by whatever | September 6, 2007 2:59 PM
28

whatever @27: Most FlexCars are parked in private lots, not on city streets.

Posted by DOUG. | September 6, 2007 3:13 PM
29

Yo, Doug two: whom are you addressing? What are you trying to say, exactly? Other than "I rent a lot of cars"? Whatever you are quite expert in, it is not written communication, that's for sure. Perfect spelling and grammar is nice, but not necessary; being able to make yourself understood is.

Posted by Fnarf | September 6, 2007 3:29 PM
30

Just reading along - and some off topic here.

If this is a for profit business funded by rich capitalists, and is very successful, as in growing - so - why not tax them?

And by any but the PR maven who thought up shared cars - all car rentals are shared cars.

Just a new angle, smart folks, making money, creating a good greenie image tailor made for Seattle, self service car rentals, oops, car sharing, what a good idea. And cars in the hood, great.

Raise their taxes, hell. I take the bus. And the train, and walk a lot. U haul to move.

And what is with the grammar queen? Is this Slog a thesis for someone?

Posted by hilda | September 6, 2007 3:40 PM
31

I use Flex car occasionally when I have an errand I can't do by bus and greatly appreciate the convenience.
Paying more for it sucks, and I do think it is different from a car rental service sine I pay a membership fee and I don't pay a fee to use Avis or Hertz, et al.

What I don't get is why folks who don't use it are so worked up. Why are you conservative/liberatarian/anarchist Sloggers in such a lather?.
Some of you seem to think that it is just desserts for liberals to get a tax on a supposedly liberal thing like car-sharing. Does Flexcar threaten you? Are you afraid it will lead to you losing your right to own a car? You anti-corporates are just blindly happy some rich person is having a little trouble. Childish and ineffective. Flap your pie holes about something that actually effects you.

Posted by inkweary | September 6, 2007 3:42 PM
32

I think it would be a serious mistake to say that folks are worked up based on two or three Slog comments. Three Sloggers does not a cabal make.

Posted by Fnarf | September 6, 2007 4:18 PM
33

Flexcar is really starting to suck. I haven't owned a car for 7 years and the only time I've rented is for vacation or hiking trips out into the mountains. When flexcar first came out they were a great alternative and ended up being cheaper than most rental cars. Not long after joining they put mileage caps on and charge ridiculous amounts if you go over this cap (like say if you want to drive anywhere outside of the greater seattle area). Now the only thing they are good for is a move or a big grocery run. I already hardly ever use them anymore because renting a car is cheaper. This tax sure isn't helping that.

Posted by thaumaturgist guy | September 6, 2007 4:19 PM
34

@34 - you should switch to U-Flex then. If you work or study at the UW, you can rent the UW biofueled hybrids even cheaper.

Plus, they clean them.

Posted by Will in Seattle | September 6, 2007 4:39 PM
35

@31 - So if Hertz offered membership cards that provided discounts or gave you a flat rate for rentals, would that then move them from "uncool, taxable business" to "cool business that deserves a tax exemption"?

You, and the Flexcar fans, seem to be drawing an arbitrary line here; that's what is being objected to. And BTW, tax policies do actually effect us, being citizens and all, y'know.

Posted by tsm | September 6, 2007 4:41 PM
36

@35 - make that "affect". I can't believe I did that.

Posted by tsm | September 6, 2007 4:42 PM
37

That makes FlexCar even less worth it than it currently is, for anything other than working for a company too cheap to provide a company car or taxi reimbursement for all the cross-town gophering they make you do.

I've used FlexCar once to do an errand, but I really could have just used the bus. It would have been cheaper, less hassle, and less risky.

The Urban Mobility Group offered free FlexCar memberships to downtown workers during the tunnel closure, in the theory that the loss of the tunnel somehow reduced transit options (it didn't) and that a FlexCar will make up for it (it doesn't). You can't, for example, run home early on a Flexcar, unless you feel like paying for it overnight, and driving back tomorrow.

Posted by K | September 6, 2007 4:49 PM
38

What the shit are you assholes talking about? Hilda, @30, and everyone with a similar posting, this is not about TAXING THE CORPORATION. This is about TAXING MEAGAN. That's me, Meagan. The girl with no car who needs to drive sometimes BECAUSE THE FUCKING BUS DOESN'T GO EVERYWHERE. Flexcar is not going to pay the tourist tax on my behalf. I AM GOING TO HAVE TO PAY IT. ME. MEAGAN.

Posted by MEAGAN | September 6, 2007 5:16 PM
39

Will in Seattle @34: Do you have a pointer to more information on that U-Flex thing? I can't find any mention of it anywhere else.

Posted by Josh | September 6, 2007 5:39 PM
40

@38, sales and use taxes are borne by both the customer and the company. You'll feel the pinch, but so will FlexCar.

Posted by joykiller | September 6, 2007 5:56 PM
41

You're annoying, Erica, but I signed this petition and will spread the word. What horseshit the rental tax is.

Posted by Gomez | September 6, 2007 7:03 PM
42

Ah, this is nothing new. My wife and i were founding members with 'lifetime memberships' locking in our rate plans as they were whnever the hell that freakin' ripoff was the new hotness. Long story short, a bit before Mr. Flexcar Honcho decamps for DC, ooooh, nooo, did we say lifetime? we meant, um, two years! so sorry!

A shouting match later in which departing CEO attempted to pin my abrogated contract on expiring city subsidies and I had had enough. This tax thing is just another example of this operation's poor planning and willingness to play the victim due to either deceptive or willfully naive marketing. Fuck 'em.

Posted by mike | September 6, 2007 8:39 PM
43

@40 Flexcar will feel a pinch related to decreased use when this tax goes into effect, but Flexcar is not the one who will be paying the tax. That's how the revenue is generated in other industries (hotel/rental car). Tourists come to town and pay the tax - Hertz doesn't cover it and neither does the Four Seasons. However, when people go on vacation, they're already PLANNING on spending a lot of money. Residents shouldn't be expected to make similar expenditures.

Posted by Meagan | September 6, 2007 9:16 PM
44

I love Flexcar despite all of it's faults. (kinda pricy, the cars need to be cleaned more often, some members never fill them back up with gas like they are supposed to, members know what I am talking about)

But, it is technically a car rental even though it is on an hourly basis. So there is a logic that we would get hit with the car rental tax at some point. What amazed me is that when Flexcar announced this in my monthly copy of "Flexnotes" was why isn't Flexcar picking up part or even all of the tax? They did give us a link to sign a petition, which I signed, but they did not really talk about trying to fight the tax being charged beyond that petition drive. Perhaps Flexcar could look at some rate adjustments or even look at totally dropping the annual membership renewal to offset the tax? (It would not be much of an offset but I doubt Flexcar is suffering for lack of money given how many new car locations they are adding in Seattle monthly)

I think Flexcar has some explaining to do at their occasional town meetings with members about this tax.

And there are too many people on this thread of commentaries that are frankly talking out of their asses and should retract their comments that NOTHING to do about this issue.

Posted by Cato the Younger Younger | September 7, 2007 4:06 AM
45

Putting on my tax hat... these taxes are becoming more and more common because the politicians have a much easier time imposing a tax on a person that doesn't vote in the jurisdiction.

Multnomah County Oregon was the first place in the country to do a car rental tax. It has spread like wildfire. So have occupancy taxes, the various taxes imposed when you fly, etc.

From a public policy perspective, the system Flexcar uses is a rental system. You rent by the hour, like you would a hotel room on Aurora when you pick up that hooker.

If there is a public policy direction to go it is to exempt this type of transportation. But that's how I'd approach it. It needs to be narrowly defined so that a Flexcar situation is made exempt. Expect a fight from the Hertz et al because they are pissed that the bill for which they advertise $50 for a rental ends up being $80 or $90 after all the additional charges/taxes are added in. Someone should call Helen Sommers and tell her to get her pencil ready to make the RCW's and WAC's more complicated. If she or another rep bites expect a study.

Posted by Dave Coffman | September 7, 2007 5:03 AM
46

Again with the greatness of Dave Coffman. Hero to Sloggers, and Man of the People.

We gave up owning a car and use Flexcar once or twice a week for errands. It's mostly affordable, and mostly convenient. If we had reliable mass transit I wouldn't use it at all.

The extra $20 a month will suck.

But it won't make me give up Flexcar and buy one a car of my own.

Posted by It's Mark Mitchell | September 7, 2007 7:59 AM
47

My Flexcar bill already runs in the $350 to $500 range a month. I use it for music gigs and rehearsals - lugging amps and guitars on a bus doesn't work. There is no Business Entity that reimburses me or pays me back. I don't make enough money to even claim on my taxes playing in my shitty bands, so this is not a Business Expense. I can not claim this on my taxes. At 18%, even if I only had my 'cheap' months ($350) for the year, I'm looking at over $750 extra.

Sure, I could go and buy a car - between Metro, which finds a way to break my heart every day - I often wonder why I don't. It'd be more convenient. My commute to my normal, non-Flexcar-endorsing day job, would be shorter. (It takes an hour and sometimes 3 busses to go from Montlake to SoDo by bus!) I'd be able to schedule rehearsals and errands and jaunts so much easier.

I made a decision 3 years ago to live car-free, to Do My Part, to Try Alternatives. I ride the buses. I use car-sharing. I sometimes bike to work, or (gasp!) even jog it. But fuck all if I'm not sick of being punished for it. The mockery, the puzzled looks from new acquaintances when I explain that I don't have a car, the inconvenience of not being able to just go whenever I need it, waiting for Metro in the rain, the women who have laughed in my face when I ask them on dates - and now an extra $750 a year, if I try to use Flexcar as little as possible?

Fuck it. SUV, come to me. Take THAT, environment!

Posted by Monty | September 7, 2007 9:15 AM
48

@43: Typically, the businesses hit by a new sales tax will lower their operating margin in order to lessen the pinch felt by the customer, thereby retaining as many customers as possible.

Are current customers' bills increasing by the exact amount of the add'l tax? If not, then Flexcar is bearing some of the cost.

Posted by joykiller | September 7, 2007 9:38 AM

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