Sales Tax on Fees....legal or not?

[Kennedyk54]

I noticed that the companies I was looking at (National and Alamo @ CCC) charge 6.5% sales tax on the fees that they impose on car rentals.
I can see a tax on the rental, but is it legal to charge me a 6.5% sales tax on a Concession Fee Recovery or a Customer Facility Charge or a Tire/battery Fee. Not to mention the Florida Surcharge and the Vehicle License Fee.
The invoice specifcly states "sales tax". So they are selling me these fees????

If these fees must be paid in order to rent a car then at least they should added AFTER you pay tax on the rental.

A tax on a tax just sounds criminal to me....someting I would expect in Russia or Cuba or whatever.......

Off my soapbox now.

 

[Tozzie]

I noticed that the companies I was looking at (National and Alamo @ CCC) charge 6.5% sales tax on the fees that they impose on car rentals.
I can see a tax on the rental, but is it legal to charge me a 6.5% sales tax on a Concession Fee Recovery or a Customer Facility Charge or a Tire/battery Fee. Not to mention the Florida Surcharge and the Vehicle License Fee.
The invoice specifcly states "sales tax". So they are selling me these fees????

If these fees must be paid in order to rent a car then at least they should added AFTER you pay tax on the rental.

A tax on a tax just sounds criminal to me....someting I would expect in Russia or Cuba or whatever.......

Off my soapbox now.

It may be the way florida state tax law is written, that determines what is taxed and what isn't taxed. If I order something on the internet or through a catalog I have to pay tax on the Shipping and handling fees as that is how the tax code for NY is written, if Iived or shipped the package to a different state I woldn't have to pay it.

 

[KINGBOBOFTHENORTH]

Yes, in Florida those fees are taxed at the local sales tax rate. We don't have a state income tax here and the state sales tax is only 6.0% (6.5% in Orange County, 7% in Seminole & Osceola County) so they have to make some money somehow!

Your business is appreciated.

BobK/Orlando

 

[NJRRK]

A tax on a tax just sounds criminal to me....someting I would expect in Russia or Cuba or whatever.......

Or New Jersey!

In NJ they are all taxable too, plus we DO have an income tax. An example of NJ double (or triple) taxation is that cigarettes have sales tax in addition to the $4 state tax. i could go on and on ...

 

[dioxide45]

Remember, not all fees are government imposed fees. They are just fees that pad the profit of the rental company, so they are really just part of the rental car rate. They aren't taxing a tax, they are taxing the rental rate that is disguised as a fee.

Also taxes that are collected have to go to the taxing authority. If Alamo over taxes by taxing these fees, they can't keep that extra. It was collected from the customer as a tax, with the customer under the understanding it was a tax, so it has to be passed on as such. It wouldn't be extra income for Alamo.

 

[jlewisinsyr]

Remember, not all fees are government imposed fees. They are just fees that pad the profit of the rental company, so they are really just part of the rental car rate. They aren't taxing a tax, they are taxing the rental rate that is disguised as a fee.

Also taxes that are collected have to go to the taxing authority. If Alamo over taxes by taxing these fees, they can't keep that extra. It was collected from the customer as a tax, with the customer under the understanding it was a tax, so it has to be passed on as such. It wouldn't be extra income for Alamo.

Which fees are you talking about? If you're going to offer this opinion, please support it with examples. The only one I can think of is a Tire Fee, but that is partially mandated in some states, so it's not really a rental car fee.

 

[cranbiz]

In Florida, If you just purchase a service (like a repair), then there is no tax imposed, once you add a tangible object to the invoice (like the rental of the car), the entire invoice amount becomes taxable.

 

[Lewisc]

Which fees are you talking about? If you're going to offer this opinion, please support it with examples. The only one I can think of is a Tire Fee, but that is partially mandated in some states, so it's not really a rental car fee.

Playing with semantics. I rent a car from a neighborhood location. The cost of the agency to rent the facility isn't listed seperately. I rent from an airport location. At least some of the rental price of the facility is seperately itemized on my rental bill.

 

[jlewisinsyr]

Playing with semantics. I rent a car from a neighborhood location. The cost of the agency to rent the facility isn't listed seperately. I rent from an airport location. At least some of the rental price of the facility is seperately itemized on my rental bill.

Not really semantics because one is a Governmental Agency/Facility often run by a Airport Consortium (or county depending on the airport) which means fees imposed are a governmental pass through which are invoiced/seperated on invoices, it's very different then a private rental facility that is not in a publicly owned facility.

 

[dioxide45]

Here are the fees on our upcoming rental:

Taxes, Surcharges and Fees
Rental Car Facility Chrg 3.95/day $59.25
Concession Recoupment Fee 10 % $25.37
Florida Surcharge 2.00/day $30.00
Tire/battery Fee .02/day $0.30
License Recoupment Fee .45/day $6.75
State Tax (6.0%) $22.10

Only the last one is a true government imposed fee in my opinion. All of the others are fees Alamo charges to recoup other costs that they are imposed. They don't hold these funds in trust like they do State Taxes. They just take it in and it covers their costs. The only one truly passed on directly to someone else is the State Tax.

It is still true though that if Alamo collects taxes on fees, Alamo doesn't make that as extra profit, those taxes are passed on to the taxing authority.

 

[Kennedyk54]

Dioxide45

I would guess that the Florida surcahrge of $2 a day is government imposed.

All

My original argument was that I shouldn't be charged a "sales tax" of 6.5% on these surcharges and fees because the car company is not "selling" me a fee.
I don't argue that they can't impose these surcharges and fees, just that I shouldn't have to pay a 6.5% tax on them.

 

[jlewisinsyr]

Here are the fees on our upcoming rental:

Taxes, Surcharges and Fees
Rental Car Facility Chrg 3.95/day $59.25
Concession Recoupment Fee 10 % $25.37
Florida Surcharge 2.00/day $30.00
Tire/battery Fee .02/day $0.30
License Recoupment Fee .45/day $6.75
State Tax (6.0%) $22.10

Only the last one is a true government imposed fee in my opinion. All of the others are fees Alamo charges to recoup other costs that they are imposed. They don't hold these funds in trust like they do State Taxes. They just take it in and it covers their costs. The only one truly passed on directly to someone else is the State Tax.

It is still true though that if Alamo collects taxes on fees, Alamo doesn't make that as extra profit, those taxes are passed on to the taxing authority.

License recoupment is a pass through of the licensing fees charged to rental cars by the DMV, the tire/battery fee is a pass through off a fee charged for recycling tires/batteries (part of a resource recovery agency), FL surcharge is self explanatory, it's a surcharge imposed on rentals by the state of FL, rental car facility and concession recoupment are both fees imposed by the airport onto rental car agencies. All of these fees are charged by some form of a governmental entity and are passed through to the consumer by Hertz. These fees are not held by Alamo (or any rental agency), these are passed through to the appropriate agency.

 

[dis-happy]

When the tax is applied is according to state and local laws. Ex: In some states sales tax is figured before shipping, other states it is figured after the shipping had been included.

Last week I paid for 2 hours on a tennis court reservation. Handed over the money I thought was due...only to find out I owed an add'l 3 dollars! Apparently SC has an "amusement tax" that applies to tennis court rentals. Go figure.

 

[dioxide45]

Here are the fees on our upcoming rental:

Taxes, Surcharges and Fees
Rental Car Facility Chrg 3.95/day $59.25
Concession Recoupment Fee 10 % $25.37
Florida Surcharge 2.00/day $30.00
Tire/battery Fee .02/day $0.30
License Recoupment Fee .45/day $6.75
State Tax (6.0%) $22.10

Only the last one is a true government imposed fee in my opinion. All of the others are fees Alamo charges to recoup other costs that they are imposed. They don't hold these funds in trust like they do State Taxes. They just take it in and it covers their costs. The only one truly passed on directly to someone else is the State Tax.

It is still true though that if Alamo collects taxes on fees, Alamo doesn't make that as extra profit, those taxes are passed on to the taxing authority.

Here are the fees from Avis on an exact same rental.

Surcharge174.88 USD
- $0.47 per day (Energy Recovery Fee)
- $2.01 per day (Florida Surcharge & Waste Tire/Battery Fee)
- $3.95 per day (Customer Facility Charge)
- $0.35 per day (Vehicle License Fee)
- 10% (Concession Recovery Fee)

Alamo doesn't have an Energy Recovery Fee.

Avis charges what appears to be 0.01 less for the Tire/Battery fee.

Alamo charges 0.45 for the Vehicle License Fee.
The DMV doesn't likely charge each customer a daily fee, they charge Alamo a set fee like the rest of us pay, Alamo want so recoup that annual fee and charges it daily to each customer.

Both have a concession recovery and customer facility charge. However these are listed as recovery and recoupment, meaning that the agency is recovering monies that they have had to pay out.

Avis also charges tax on all of their fees.

Just like on your cell phone bill, just because it is listed as a fee or surcharge does not mean it is government or agency imposed.