Alaska Senate passes bill requiring Turo to collect state vehicle rental tax

The Alaska Senate Transportation Committee convened on April 3, 2025, to discuss significant legislative changes regarding vehicle rental platforms, particularly focusing on Senate Bill 138. The bill aims to address the growing use of platforms like Turo and Getaround, which have become popular among Alaskans looking to rent out their vehicles.

The meeting highlighted that many vehicle owners using these platforms are unaware of their obligation to pay the state’s 10% vehicle rental tax. A notable example was shared about a couple from West Anchorage who rent out multiple cars during the tourist season but were not informed about the state tax requirements. They expressed a preference for Turo to handle tax collection on their behalf, indicating a need for clearer compliance mechanisms.

Senate Bill 138 proposes that vehicle rental platforms be required to collect and remit the state rental tax directly to the Department of Revenue. This aligns with existing laws that mandate the tax be included in rental invoices. The bill also seeks to reduce the rental tax rate from 10% to 8% for these platforms, while maintaining the 10% rate for traditional rental companies. This change is intended to support the burgeoning rental market and alleviate some financial burden on vehicle owners.

The committee discussed the implications of the bill, noting that it would protect vehicle owners from retroactive tax liabilities, a concern raised when a similar bill was vetoed by the governor last year. The Anchorage municipality's experience with a similar tax requirement was referenced, showing a substantial increase in tax revenue since its implementation.

Senators raised questions about the enforcement of tax collection by the Department of Revenue, emphasizing the need for clarity on how tax regulations are applied to ensure compliance among rental platforms. The discussion underscored the importance of adapting to the evolving rental landscape, particularly as younger generations increasingly favor platforms like Turo over traditional rental services.

The meeting concluded with a call for further analysis of the bill, with committee members expressing a commitment to ensuring that the tax system is fair and effectively administered. The next steps will involve continued discussions and potential adjustments to the proposed legislation as it moves forward in the legislative process.