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Minutes for HB2154 - Committee on Taxation
Short Title
Imposing property tax on rental and leased vehicles and discontinuing the excise tax on the rental and lease of such vehicles.
Minutes Content for Mon, Mar 10, 2025
Chairperson Smith opened the hearing for HB2154.
Adam Siebers, Office of Revisor of Statutes, provided an overview for HB2154 that discontinues the excise tax currently imposed on rental or lease of vehicles for a period less than 28 days. Starting July 1, 2025, the 3.5 percent excise tax on the gross receipts would no longer be required. (Attachment 1) Mr. Siebers stood for Committee questions.
Kathleen Smith, Kansas Department of Revenue, provided an overview on the fiscal note for HB2154 stating the fiscal impact would be at the local level with the discontinuation of the vehicle rental excise tax that is currently distributed to the counties based upon location of the rental or lease transaction and now will be collected. The property tax, wherever the car rental companies choose to register the vehicles, the Department was not able to come up with an estimate at this time. She noted the number of vehicles in the rental fleet system is around 15,000. The amount of the rental excise tax collected in 2023 was around $6.5 million. Ms. Smith stood for questions from Committee members.
Proponent:
Ryan Cagney, Senior Government Relations Manager, TURO, testified as a proponent for HB2154 stating they have thousands of guests across Kansas placing their vehicles on the platform and assist in generating extra revenue with their vehicles when the guests are not using them. The excise tax generates approximately $6.5 annually while rental cars have a special tax break and property tax exemption estimated to be $15.0 million annually. HB2154 will have a fair and level playing field by eliminating the excise tax placed on renting vehicles in Kansas while reinstating the property tax on rental vehicles purchased and operated in Kansas. (Attachment 2) Mr. Cagney stood for questions from Committee members.
Opponents:
Sean Miller on behalf of Enterprise Mobility, testified an an opponent for HB2154 stating the Kansas Legislature enacted a bill in 1991, to provide a 3.5 percent additional excise tax on all rental cars in lieu of property taxes. The law was an outcome of an earlier Legislative Post Audit Report that determined the traditional method of collecting property taxes often didn't work with rental car companies due to the transient nature of the vehicles. Mr. Miller noted they do not support HB2154 but the company does believe transparency is an important issue and favor full disclosure of all taxes, fees and charges to the consumer in advance of any rental transaction. (Attachment 2) Mr. Miller stood for questions from Committee members.
Written opponent testimony for HB2154 was submitted by Don L. McNeely, Kansas Automobile Dealers Association, (Attachment 3)
Chairperson Smith closed the hearing for HB2154.
