An extra $55 for taxes on my pre-paid car rental? Seriously?

Question: We booked a ten-day vacation package in Cancun, Mexico through that included air, hotel and a rental car. Taxes were included in the price of the rental car.

When we arrived at the Hertz rental counter, we were told there was an additional tax of about $55. I paid the additional tax at checkout, expecting to be reimbursed from

I’ve written two emails to, but both have gone unanswered. When I called the company, a representative told me the $55 charge was a “deposit” that would be returned to me. But a call to Hertz confirmed it was a tax and no refund was due.
Continue reading…

I couldn’t get a customs stamp — is a refund out of the question?

A stamp for you. / Photo by Sarah Parrott – Flickr Creative Commons

Note: You’ve probably noticed two things about today’s post. 1) It wasn’t available this morning; and 2) We’re back to Disqus 2012. The two are not related. We had server problems this morning. Disqus removed the ability to view comments on mobile from the “old” version, so we were forced to upgrade. (I am very unhappy with Disqus, but feel I have no choice.)

What’s an immigration stamp worth? If you said $61.55, you must know Nancy Bestor. She’s been fighting with her credit card over a tax refund after a recent trip to Italy, and she wants me to help.
Continue reading…

Another tax on air travelers? It’s nonsense

Rochelle Peachey is no stranger to high taxes and fees on airline tickets. A frequent flier between Miami and London, she routinely sees government charges that double the price of her ticket.

Not when she flies domestically, though. Here, taxes add about 20 percent to the cost of a fare.

But all that might be about to change. The Obama administration’s deficit-reduction plan includes a new mandatory $100 surcharge per flight for air traffic control services, which airlines would pay directly to the Federal Aviation Administration. The fee, however, would almost certainly be passed along to customers. The plan also raises the passenger security tax from $2.50 to $5 per non-stop flight, and eventually to $7.50.
Continue reading…

Is this enough compensation? Orbitz splits the difference on departure tax

Departure taxes are the final “gotcha” when you’re flying. Just as you’re getting ready to board a flight back home someone asks you for money, and threatens to deny you boarding if you can’t cough up the cash.

Fortunately, most departure taxes are already built into the airfare. For example, when I visited St. Lucia in 1993, I was told that if I didn’t come up with the money, I couldn’t fly back to New York. I had to stop by an ATM and pay up. But last month when I flew from St. Lucia to Miami, the $26 departure tax was included in my airfare.

Eduardo Castresana wasn’t so lucky on his recent trip to Peru. The country’s departure tax — about $6 — should have been included in the TACA airfare he purchased through Orbitz. He says for some reason, it wasn’t.
Continue reading…

Drivers want Congress to curb car rental taxes

Should Congress limit the taxes a city or municipality can impose on a rental car?

It’s a question elected representatives are likely to take up soon, as they consider the End Discriminatory State Taxes for Automobile Renters Act of 2009. The law, which is backed by car rental companies, would limit the excise taxes a municipality can impose on rental cars.

Cities are fighting the measure, saying it would curb their ability to raise money and represents an unwanted federal intrusion.

But a survey of more than 600 travelers conducted last week by this site and the Consumer Travel Alliance suggests drivers are on the side of car rental companies.

Asked if Congress should freeze the discriminatory excise taxes imposed by some cities, 78 percent voted “yes.” Only 21 percent rejected the idea.
Continue reading…

America’s taxing destinations: Cities that sock it to travelers

Which American cities impose the highest discriminatory travel taxes on lodging, car rentals, and meals? A new survey by EconFirst Associates and the NBTA Foundation reveals the answers, and you probably won’t guess the winner — I mean, loser.

Did you say Portland, Ore.? If you did, it’s either a lucky guess, or you get around, or you live there. P-Town’s discriminatory taxes against travelers added up to a whopping $21.55 a night. (Discriminatory taxes are calculated by excluding general sales taxes to count only taxes that target car rentals, hotel stays and meals.)
Continue reading…

Government says airlines “not required” to refund taxes on nonrefundable tickets

Kirk Miller knew his nonrefundable US Airways tickets was lost when he canceled his flight, but like many air travelers, he wondered about the taxes. Could he get those back?

“It is my understanding that although the fare is not refundable, the taxes included in the price of an airline ticket are refundable,” he says. “Airlines act as tax collectors, but they are supposed to hold the taxes in escrow until you actually travel, when they pay the government(s).”


Not exactly, it turns out. A US Airways representative told him the taxes were also nonrefundable. He sent a brief, polite email to the airline, and was again rebuffed.
Continue reading…

US Airways fined $40,000 for failing to disclose full airfares

In yet another sign that the Transportation Department is serious about protecting the rights of consumers, the government this morning fined US Airways $40,000 for failing to disclose the full price consumers must pay for air transportation.

“When consumers shop for air travel, they have a right to know how much they will have to pay,” Transportation Secretary Ray LaHood said in a prepared statement, adding, “We will continue to ensure that airlines comply with our price advertising rules.”

Here’s the full consent order (PDF).
Continue reading…

Whoever wins in tax war, guests will still pay the bill

hotelNext time you book a hotel room online, consider what happens to the taxes you’ve paid.

Occupancy taxes can take a big bite out of your vacation budget. San Francisco hits its hotel guests with a 14 percent tax. Washington’s is 14.5 percent. Chicago adds 15.4 percent.

Where does all the money go? That’s a question the courts have tried to answer in recent months.

Online travel companies, which make money by negotiating a lower rate with a hotel and then offering it at a higher price to travelers, believe they should pay hotel taxes based on the lower rate they negotiated with the hotel. Some cities disagree, alleging the companies should remit all the taxes they’ve collected — not just a portion.
Continue reading…

A 73 percent tax increase on car rentals in Wisconsin? That can’t be right

But it is right, according to the car rental industry, which is doing everything in its power to prevent the passage of a new law in Wisconsin that would raise car rental fees from $2 to $18 per rental to fund mass transit projects, and giving the Badger State the highest car rental taxes in the nation.

The new surcharges, which are proposed as part of Wisconsin’s budget bill, have already passed the Assembly and are being considered by the Senate today. So why haven’t you heard anything about this 73 percent increase in your car rental bill? A look at the bill (PDF) — hope your computer has lots of memory — shows how this issue has gotten buried in the 2009 budget debate.

But car rental companies are making a last-ditch effort to derail the tax. Here’s what it sent to Wisconsin legislators earlier this week:

I am writing today as your constituent and as an employee of Enterprise Rent-A-Car to ask that you oppose the KRM rail authority fee, which will increase the rental vehicle tax in Kenosha, Racine, and Milwaukee counties to 73.6% tax on a $30 rental.

Our customers already pay 20% in taxes, most of whom are Wisconsin residents accustomed to paying a standard 5.6% sales tax for other goods and services. Adding an additional $16 per transaction ($18 total) is even more unfair; and if enacted, these counties will have the highest rental car tax in the country – by a long shot.

Higher taxes means fewer car rentals, and this in turn will limit employment opportunities for my fellow employees and me. Every day, Kenosha, Racine, and Milwaukee residents and businesses use rental cars for a variety of reasons:

* Some need a specialty vehicle for a household project, like a pick-up truck or a van.
* Many employers prefer to rent a car for employees traveling on in-state business in lieu of reimbursing for mileage on a personal vehicle. Many employees prefer this too, as they don’t rack up miles on their own car.
* Also, many of our customers simply don’t own cars, either because they can’t afford it, or simply choose not to for other reasons. These residents rely on affordable rental cars for transportation when public transit is not an option.
* Some need to rent a larger vehicle for a vacation or out-of-town trip
* Many parents rent cargo vans to move their children to college
* Some families rent an additional vehicle to accommodate family visiting from out of town
* Some rent a luxury car for a special occasion like a wedding

I can think of no reason why Wisconsin residents using a rental car for these purposes should bear the burden of a 73% tax to pay for a commuter rail line.

At a time when the auto industry is clearly struggling, I ask you to oppose this $18 fee and any new rental car tax, and support a funding mechanism that spreads the burden across a larger group of beneficiaries.

A 73 percent tax increase seems a little steep to me. And for what? A train that tourists are unlikely to use, like South Florida’s Tri-Rail? Well, we don’t know that — yet.

It is more than just a little ironic  that the now-bankrupt car industry allegedly systematically dismantled mass transit in the 20th century. Today, cars are funding the return of trains.

But I believe there’s a right way and a wrong way to do this. And a fly-by-night approach to raising taxes on drivers, many of whom can’t vote and may not benefit from the mass transit projects, is the wrong way. This issue deserves its own debate, far removed from the the chaos of Wisconsin’s budget bill.

Broadsided! 5 new car rental fees to avoid

Look out for cancellation penalties. Beware of energy surcharges. And watch for facilities fees.

No, not on your airline ticket. Not on your hotel folio. You may find these new extras on your next car rental bill.

Beleaguered auto rental firms are quietly adding new surcharges designed to lift revenues in a recessionary economy.

To get an idea of how absurd it’s becoming, meet Jim Swofford. He found a mysterious $5 fee on his Hertz bill recently, which a representative described as a cancellation fee. Car rental companies typically don’t charge their customers for cancellations, so Swofford, who frequently rents from Hertz, said he didn’t want another car he’d reserved for later.

“That’ll be $25,” the agent told him.

“So I jokingly said I would not cancel but just be a no-show,” he remembers. “She said that would result in a $50 fee.”

Or talk to Eric Hegwer, a photographer from Austin, Texas, who spotted a $1 “energy surcharge” on his Hertz car rental bill recently. “My previous rentals didn’t have one,” he says.

I asked Hertz about the two new surcharges. Company spokeswoman Paula Rivera told me the cancellation fee, which was added in December, applied only to prepaid reservations and is meant to “reimburse Hertz for the paperwork and billing involved with a prepaid reservation.” The fee also covers part of the company’s cost of holding vehicles for prepaid reservations. The energy surcharge, which was added in October, bills all rentals in most states an additional $1 a day “to offset the increasing costs of utilities, bus fuel, oil and grease,” she said.

It’s easy to see why car rental companies are taking these steps. The industry is hemorrhaging money faster than oil leaking from a cracked gasket. Hertz lost $73 million the fourth quarter, and competitor Avis lost $121 million in the same period. They fared much better than Advantage Rent A Car, which filed for bankruptcy protection in December and whose assets were sold to Hertz for a reported $33 million.

Every penny counts for the car rental companies. Then again, in this dreadful economy, who isn’t counting every cent?

Shocking anecdotes aside, there’s a pattern here, and you don’t have to be an investigative reporter or a conspiracy theory-obsessed columnist to see it. Just read the annual reports issued by one of the publicly traded car rental companies. (Look for the form 10-K and then scroll down to “Legal Proceedings” for an enlightening read.) They’re littered with lawsuits over fees, surcharges and add-ons that motorists say broadsided them when they rented a car.

A representative of the American Car Rental Association, a trade group for the car rental business, says these fees are essential to the industry’s survival. But that doesn’t give companies a license to surprise their customers. “The car rental company has an obligation to clearly and concisely explain all fees and charges at the time of rental, ” says Robert Barton, the association’s president and chief operating officer for U-Save Car & Truck Rental.

How to stay ahead of these extras? Knowing is half the battle. Here are five of the newer charges that could sideswipe you on your next trip.

1. A fee for something you’ve already paid for

This is one of the more creative new ways of separating you from your money: charging you twice for the same thing. “Three times now, with three different companies, they have tried to charge me for gas when I’ve returned the car with a full tank and claimed it was an honest mistake,” says Sid Savara, a software engineer in Oahu, Hawaii. “It leads me to suspect they are just tacking the fee on and most people aren’t noticing or complaining about it.”

Boston-based author John DiPietro brought his own E-ZPass toll transponder when he rented a car in Massachusetts recently, but Budget billed him for the toll roads anyway. “We’re still trying to resolve it,” he told me.

Now more than ever, it’s important to be on the lookout for duplicate charges on your rental bill.

2. A fee for something that should come with the car
Such as tires. Enterprise recently charged one of Edgar Dworsky’s readers a $2 “tire fee.” (He edits a Web site called Consumer World, and like me, he hears a lot of horror stories from travelers.) What’s a tire fee? Enterprise told Dworsky it was required by the state of Florida. “I guess the consumer advice is to order a car without tires next time,” he joked.

But other fees can’t be blamed on the state, including surcharges that cover the cost of oil and grease. It might be interesting to show up at a car rental counter with four tires and a can of Pennzoil, and ask to have those fees waived. You think they would do it? Yeah, neither do I.

3. Surcharge on surcharges
Scott Lerman found a “privilege fee” on his last car rental in Florida, which applied to rentals picked up within 48 hours of flight arrival. “Never seen anything like it,” says the Livingston, N.J.-based freelance publicist. (The fee covers the costs of operating an off-airport location.)

Other renters have reported seeing a similar surcharge combined with what’s often called a concession recovery fee, which amounts to a surcharge on top of a surcharge. At best, car rental companies are coming up with new and confusing names for their fees. At worst, they’re charging us a fee on top of another fee. Next thing you know, there’ll be a surcharge on a surcharge on top of a surcharge. Don’t laugh — I’m sure they’ve already thought of it.

4. The stadium tax
Fees for new stadiums and concert halls are technically not new, and technically they’re not even controlled by car rental companies. Except that municipalities keep coming up with new ones and car rental companies don’t lobby hard enough to have the fees removed. So rental firms are not completely blameless.

Seth Mendelsohn, the president of a food store in Boulder, Colo., found a $4 “downtown arena” fee on his bill when he visited Kansas City recently. “Apparently the city is trying to pay for part of the Sprint Center through car rental fees,” he told me.

There are dozens — perhaps hundreds — of these so-called stadium taxes across the country. And new ones keep popping up. One of the latest is a car rental tax in Gwinnett County, Ga., to build a stadium for the Atlanta Braves. And just last week, legislators proposed a $2 tax to fund commuter rail service in South Florida.

5. Extra driver fees
These aren’t brand new, but the way in which they’re being enforced has changed recently. When Carol Stevenson and her sister rented a car from Payless in Phoenix, they were asked to pay $9 a day more if Stevenson’s sister wanted to drive. “And that didn’t include their insurance waiver,” she remembers.

Why charge for an extra driver? The simple answer: because they can.

In the past, car rental agents looked the other way when two drivers showed up to rent the same car. But now, with money tight, they’re applying more pressure to authorize a second driver. If you don’t fork over the money and happen to get into an accident, they warn, you won’t be covered by their insurance. Of course, that assumes you buy their overpriced collision-damage waiver in the first place. Odds are, your credit card or car insurance offers comparable coverage.

Most of these fees can be avoided by pre-paying for your car through one of the “opaque” travel sites such as or, or by buying through an online travel agency that guarantees its rates. But car rental companies are trying to find a way to stick it to customers with prepaid vouchers, too. I’ll have more on that in a future column.

Where will it end? Something tells me we’re not there yet. Not even close.

Love mass transit? You might pay for it next time you rent a car in Florida

Just when you thought they couldn’t possibly add any more fees to rentals, here comes another: A freshman state senator in Florida is trying to slap a $2 tax on cars to support Tri-Rail, South Florida’s commuter train.

No one believes Tri-Rail is an unworthy cause. But should tourists pay for a rail system they’re unlikely to use?

The Tax Foundation, non-partisan research organization that has monitored tax policy, thinks not.

A rental car tax is a particularly inappropriate revenue source for commuter rail. Because Tri-Rail is designed to move commuters from suburban areas to business districts, with peak service at rush hour, it not very useful to the leisure travelers who dominate South Florida’s car rental market. It is clear that car renters are being targeted not because they are beneficiaries of Tri-Rail, but because they are a tax source that lacks representation in the Florida legislature.

Here’s the bill in its entirety. The relevant language allows the state to authorize the county

… to impose a county surcharge upon the lease or rental of a motor vehicle licensed for hire; requiring that the county surcharge may be used solely to fund the transportation needs of the county as determined by the county commission; requiring the county commission to place the county surcharge on the ballot of the next general election for a vote by the electors; providing an effective date.

The car rental industry is up in arms. The American Car Rental Association, a trade group, released the following statement:

Every rental car customer — regardless of whether they are a Floridian or a tourist — currently pays $2 a day in rental car tax.

Each rental car bill is increased by an average of 13.23% due to taxes (rental car tax, airport access tax, consolidated facility fees, security fees, etc.). If rented at an airport, the average amount added to every bill grows to 24.13%.

What other consumer service is taxed at such a high rate?

Government user fee increases. It is true that many fees such as motor vehicle registration, title fees, and even speeding tickets are being increased to assist with the budget deficit. But there is a major difference between those fees and the rental car tax.

Those fees pay for a service provided by government, such as the receipt of a vehicle registration or title. Increased fees for speeding or running red lights are levied to protect public safety and deter future violations.

The rental car tax is completely unrelated to a service provided for public benefit or any other state-related purpose. It is simply a tax on a small group of consumers.

This tax increase is bad public policy because it:

Forces one industry’s consumers to pay for a service from which they do not benefit. An increased car rental tax would place an excessive burden on a limited number of customers from a single industry. Why is this small group of consumers being asked to fund the needs created by everyone?

Penalizes Floridians who rent cars. This tax will not be borne only by tourists! Florida residents and businesses rent cars for a variety of reasons, such as when their car is being repaired, for weekend leisure trips or for business trips. Last year, 74% of just one rental car company’s customers were Florida residents.

Negatively impact Florida’s economy. Tourism is a key driver Florida’s economy. Yet studies show that increasing rental car taxes lowers the number of cars rented. According to Amy Baker, Director of the Florida Legislature’s Office of Economic and Demographic Research, “the national recession is largely responsible for the state’s tourism downturn…the two places you’d see it the most are in sales tax collected and in rental car surcharges”.

Visit Florida is partially funded by a portion of the $2 a day rental car tax. However, it was recently reported that these collections were down 14% in the final quarter of 2008. The recession has greatly affected tourist industries such as hotels, theme parks, convention centers, restaurants…and rental car companies. Increasing this tax will further diminish the state’s ability to attract tourists and businesses to our state.

Rental car companies are a portion of this industry and they have had major employee layoffs that began late last year. Anything that lowers the number of cars rented will only push more people into our unemployment lines.

I don’t think anyone is saying Tri-Rail is an unworthy cause. But should tourists have to pay for a service they’re unlikely to use?

There are two solutions: First, you could avoid renting a car in South Florida. Or you can e-mail Sen. Smith and ask him to reconsider his position on this proposed new tax.