If you had family in town for Thanksgiving, they may have mentioned how expensive it was to rent a car at Phoenix Sky Harbor. Nearly 30 percent of the average car-rental bill at Sky Harbor is taxes, the fourth highest in the nation. Ever wonder why they're so high? Sky Harbor doesn't hide the facts: the charges help pay for the University of Phoenix Stadium and a new multimillion-dollar car rental facility.
Targeted excise taxes have proven regrettably popular across the nation. Since 1976, more than 80 car rental excise taxes have sprung up. They often fund things like minor league baseball and the performing arts, costing consumers $3 billion over the past 12 years.
Many wonder why customers should be forced to fund programs bearing no connection to the car rental industry whatsoever. But the fundamental question is with discriminatory taxation. Rental taxes targeted explicitly at out-of-state residents likely violate the Commerce Clause of the U.S. Constitution, which protects against state-sanctioned economic discrimination against out-of-state residents.
Stadiums might be a good thing, but tax schemes ignorant of the Constitution are no way to play ball.
Benjamin Barr is a constitutional policy analyst with the Goldwater Institute Center for Constitutional Studies.
Key Links:
-Tax Foundation: The Case Against Special Rental Car Excise Taxes
-Arizona Republic: Sky Harbor Airport costly for car rentals
-United States Constitution: Article I, Section 8, Commerce Clause
