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Auto Taxes Plague Drivers
Ask Chris · October 26, 2000

Last week's column about departure taxes drew a strong reaction from readers. Jack Hollis noted that Taiwan no longer charges departure fees at the airport immigration area. "I just flew in and out of Taipei and I was not asked nor required to pay any such levies," he noted. "Just thought you would like to get the facts straight or else be in danger of pulling a 'Gore'."

A 'Gore'? Not this columnist!

And Andrew Mahon e-mailed to say he thought I'd missed "the biggest rip-off of them all - car rental taxes." Every airport is different, he adds, "and the 'fees' can get to be in the 25 to 30 percent range even for very small cities. Is there a site that lists these fees by airport and city so we road warriors can vote with our feet?"

A: Not exactly. Car rental taxes and other surcharges - which I completely overlooked in my last column - are a huge concern for travelers. Many car rental companies quote one low rate when you call their 800-number or click on their Web site. But when you settle up - wham! - they hit you with everything from a fuel surcharge to a facilities surcharge, an insurance surcharge and an additional driver surcharge.

These fees vary between destination and supplier to such an extent that keeping a current list of fees isn't practical. What's more, the car rental companies that have taken a lot of heat for going surcharge-crazy aren't always to blame for the extras.

Fact is, many additional fees tacked to your car rental bill are actually taxes that the car rental company has nothing to do with. Those may include state and local taxes that inflate your bill by 10 to 30 percent. Many airport rental locations now also impose airport taxes to pay for shuttle bus service and airport personnel.

Jan Armstrong, the former executive vice president for the American Car Rental Association, and now a Washington consultant, says the taxes are gratuitous. Like the other travel taxes discussed in last week's column, she says the money isn't always used for the benefit of the renter, but instead goes to everything from drug intervention programs, to stadiums, to building convention centers.

The Travel Industry Association confirms that travelers in need of wheels pay more than their fare share in fees. Sales taxes on car rentals averaged nearly nine percent in the United States. Airport concession fees averaged almost 10 percent. That's significantly more than hotel guests or airline passengers have to fork over.

But sometimes it's far worse than that. Major cities like Chicago and Houston exceed the averages. In the Windy City, the car rental tax is 18 percent; in Texas' biggest city, it's 15 percent, according to TIA.

I recently got a note from Zach Shankle, who works for a Boston technology company and frequently rents a car in the city. He reported that in Boston, renting a car means paying a 10 percent airport concession recovery fee and an 8.69 percent car rental tax. Shankle was shocked when he also spotted a $10.30 'Convention Center Surcharge' on his last bill. The convention center design, he observed, hasn't even been approved yet.

Couple these creative charges with the findings of Michigan State University's World Travel & Tourism Tax Policy Center, which as reported last week, has found that the tax burdens placed on travelers is getting heavier, and the result is a lot of angry car renters.

Matt Petersen, a research director for a nonprofit organization in Alexandria, Va., says he thinks the additional fees represent "a carefully crafted plan to pad the bottom line by offering misleading choices to consumers." He recently got a surprise $9 per day charge on a car rental bill, and thinks companies are deceptive when they aren't up front about the charges.

The car rental industry says it's listening. Paula Stifter, a spokeswoman for Hertz, says disclosure is that the best way to counteract customer confusion. To that end, Hertz has trained its reservations agents to disclose not only the car rental rate, but all other rates - including taxes.

But convincing customers that car rental companies are victims, too, could be a tough sell. In the late 1990s, car rental companies under pressure from new owners to make more money decided to stop absorbing airport concession fees and other taxes that they had covered before. Only, they decided to be tricky about it and not tell travelers about the extras until it was time to settle up.

Maybe we ought to be holding more than the car rental companies' feet to the fire on this problem, though. Wouldn't it be great if this unfair taxation became something of an election issue this November, where candidates pledged to lift these ridiculous levies from those who will never benefit from them?

It would. If only travelers could vote in the places they visited.

Christopher Elliott is a travel commentator and author of A Bridge to Nowhere: A Year in the Florida Keys. All e-mailed questions may be edited, condensed or republished at the site's discretion. Ask Chris appears weekly on this site.