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House passes rental-vehicle tax to fund transportation corridor preservation
Summary
The Utah House passed House Bill 111, a 2.5% rental-vehicle tax intended to seed a transportation corridor preservation revolving fund for easements and early land acquisition; the measure passed the House 54–19 and will be sent to the Senate.
House Bill 111 moved through the Utah House on March 3, 1997, with members debating whether visitors should help pay for preserving future transportation corridors. The bill imposes a 2.5% tax on rental vehicles, directing roughly $3,071,400 annually into a transportation preservation revolving fund, with a 1.5% monthly collection fee retained by the Tax Commission.
Sponsor Representative Dillery told members the fund is intended to buy easements, development rights or property outright “several years possibly prior” to construction so that future projects are not priced out of right-of-way acquisition. He said the measure is aimed at rental automobiles “that are rented by our tourists coming into the state.”
Members questioned the bill’s scope and exemptions, asking whether it applied to motorcycles, RVs, moving vans or temporary replacement vehicles; the sponsor clarified those categories were not the target. A floor amendment was adopted to make the tax subject to the same exemptions that apply to other state sales and use taxes (for example charitable and religious exemptions), aligning administration with existing sales-tax practice.
An attempt to restore the committee’s original 3.5% rate — advanced by proponents who said the higher rate would net about $4.3 million a year — failed in a recorded vote. Supporters of the lower 2.5% rate argued the committee struck a balanced compromise.
The House adopted the bill on a floor vote, 54 yes to 19 no. The bill will be transmitted to the Senate for further consideration.
Representative Dillery said the measure is designed to preserve corridors before development makes acquisition prohibitively expensive: “If we don't do this, the potential of losing future transportation corridors are very real.” The clerk recorded the vote and announced the bill will be forwarded to the Senate.
