Car rental companies call legislative tax move a tax hike

CARSON CITY -- A lobbyist for rental car companies complained today that a plan by legislative leaders and the governor to take $1.8 million in taxes now going to rental car companies is a tax increase on the companies.

Robert Ostrovsky, who represents the companies, complained that a bill to take revenue from private companies is a tax on those companies.

"It is a tax increase from my point," he said.

Rental car companies are allowed to charge a special tax that they can retain to pay for state licensing costs of their cars. He said it costs just $50 a year to license a car in Oregon, but more than $300 in Nevada.

Nevada legislative leaders and Gov. Jim Gibbons proposed at today's special session to take one-fourth of these taxes and use the funds to help solve a $341.7 million shortfall.

But Gibbons and Senate Majority Leader Steve Horsford, D-Las Vegas, both have said there are no tax increases under consideration at the special session. The car rental tax rate would not be increased by the budget balancing plan. The money the companies receive, however, would be $1.8 million less during the January through June period.

The rental car money actually is not needed to cover the budget shortfall. Information released by legislative staff shows the shortfall during the remainder of the fiscal year will be $337 million, while $341.7 million in state agency cuts, loans and other revenue changes are under consideration.

Legislators hope to finish the special session today, but are allowing for Tuesday meetings if a resolution cannot be reached today.

Contact Capital Bureau Chief Ed Vogel at evogel@reviewjournal.com or 775-687-3901.