Congress Moving Full Expensing Legislation – Major House Win!
Car rental companies should welcome Congress’ return in January 2024 because one of the House’s first order of business was to push tax legislation that contained an ACRA-supported retroactive reinstatement of 100% full expensing on personal property, including motor vehicles. House Ways and Means Committee Chairman Jason Smith (R-MO) and Senate Finance Committee Chairman Ron Wyden (D-OR) announced on January 16, 2024 an agreement on bi-partisan, bi-cameral federal tax legislation (Smith/Wyden Agreement Section-by-Section). The agreement was introduced in the House as H.R. 7024 (H.R. 7024 Text) and included retroactive (to 1/1/23) 100% full expensing of personal property.
Chairman Smith then scheduled committee consideration of H.R. 7024 on January 19, 2024. ACRA joined with hundreds of other business trade groups in sending a joint letter to the House Ways and Means Committee members supporting H.R. 7024 (Joint Association Tax Letter). The Committee considered and rejected several amendments to the bill at the “mark-up” and then passed H.R. 7024 by the strongly bi-partisan vote of 40 – 3.
The road to full House consideration of H.R. 7024 hasn’t been as easy as that lop-sided committee vote should have indicated. Several GOP House members have criticized the bill for not including a provision to remove the 2017 cap on deductibility of state and local taxes (SALT). Another group of conservative GOP House members have alleged that the child tax credit provisions in the bill (the carrot for Democratic support) would permit undocumented aliens to qualify for the tax credit. And, finally, some House Democrats have stated they will not support H.R. 7024 because the child tax credit provisions are not generous enough!
The House on January 31, 2024 considered H.R. 7024 under a parliamentary maneuver called “suspension of the rules” — which requires a 2/3rds majority vote to pass but also permits no amendments. House Speaker Johnson (R-LA) spent the week conducting a “whip” count to determine whether the three disgruntled groups outlined above have enough members to defeat consideration of the bill given the 2/3rds majority. ACRA sent a letter to House leaders on January 30, 2024 urging quick passage by the House of H.R. 7024 (ACRA Tax Letter).
ACRA is pleased to report that H.R. 7024 was passed by the House of Representatives on January 31, 2024 by a strong, bi-partisan vote of 357 to 70. Now, on to the Senate!
Senate Majority Leader Charles Schumer (D-NY) has pledged his support for the bill. Three groups of Senators with objections similar to their House colleagues may oppose Senate consideration of H.R. 7024. Other GOP Senators have expressed concerns about giving President Biden a “win” in a presidential election year.
Under Senate rules, a 3/5ths majority (60 votes) is required to move to consideration of a bill (meaning at least 10 GOP Senators would have to join all of the Senate Democrats) – after which a simple majority vote will suffice to pass the bill. There could be a host of legislative and parliamentary maneuvers in the Senate in an effort to amend or scuttle H.R. 7024, but ACRA will continue to push – hard – for its enactment as soon as possible.
ACRA and this newsletter do not offer legal or tax advice. Please check with your tax advisor for guidance on expensing for personal property in 2023 and 2024 if H.R. 7024 is enacted or fails.
ACRA President Appointed to Federal Electric Vehicle Working Group
ACRA President Sharky Laguana, CEO of Bandago of San Francisco, California, has been appointed to the Joint Office on Energy and Transportation’s Electric Vehicle Working Group. The EV Working Group is a federal advisory committee that was established by the 2022 Bipartisan Infrastructure Law and is responsible for advising the Departments of Energy and Transportation on the implementation of the federal electric vehicle research, funding and grant programs from the BIL. Additional information about the Working Group can be found here: https://driveelectric.gov/ev-working-group.
Congratulations, Sharky! We know you’ll represent all ACRA members well within the EV Working Group.
ACRA Will File Comments with EPA on California “Waiver” Request
ACRA’s Board voted unanimously on January 17, 2024 to have ACRA filed comments with the U.S. Environmental Protection Agency (EPA) opposing California’s petition for a waiver of the requirements of the Clean Air Act (CAA) with respect to California’s Advanced Clean Car II (ACC II) program. The background on this issue is a little complex, so stick with me. In general, the CAA pre-empts state air pollution control laws to promote uniform standards nationwide. However, Section 209 of the CAA permits California (and California alone) to seek a waiver of a CAA federal standard if the state deems it necessary to achieve air quality standards in the state. California has filed waivers numerous times in the past (hence the saying that all stringent environmental regulations start in California!) and generally they are rubber-stamped by EPA due to the narrow wording of the EPA.
However, the waiver request for California’s ACC II is breaking new ground. That is because ACC II is seeking to control mobile source (cars and trucks) emissions of CO2 (and other greenhouse gases) (CA ACC II) – despite the fact that Congress has not given EPA or California the authority to regulate CO2 from mobile sources. In fact, the Supreme Court struck down an Obama-era stationary source (power plants) CO2 control program in 2022 – stating that EPA did not have the authority under the CAA to regulate CO2 emissions.
So . . .. fast forward to 2024 and ACC II. ACC II is essentially a zero-emission vehicle mandate – whether electric or hydrogen or other alternative fueled vehicles. No more ICE engines in California as of a date certain. If EPA grants California’s waiver request, ACC II (which, by the way, was generated by state environmental bureaucrats, not passed by the state’s legislature and signed by the governor) will become law in California and other states will be permitted adopt the ACC II standards under the CAA. As a result, ACC II could spread to many other states (think the Northwest and the Northeast), creating different vehicle emissions standards (and even different vehicle power systems in states adjacent to each other) in different segments of the nation.
ACRA is not opposed to CO2 reductions from mobile sources and certainly does not oppose replacing ICE vehicles with EVs where consumer demand is present and the market supports such a transition. But ACRA strongly opposes government mandates of virtually any type, as opposed to incentives, and certainly this is the case for such CO2 reductions and the transition to EVs and other clean fuel vehicles mandated by ACC II. As a result, ACRA’s Board has decided to draw the line with respect to California’s CAA waiver request. A copy of ACRA’s comments, which must be filed in late February 2024, will be included in next month’s newsletter.
ACRA Board Adopts ACRA Member “Code of Conduct”
At its January 17, 2024 meeting, the ACRA Board unanimously approved a new and unprecedented ACRA Member “Code of Conduct” (2024 ACRA Code of Conduct) which will be posted on the ACRA website. This code is intended to be inspirational in nature and to outlines to current and prospective ACRA members the business and operational principles being a member of ACRA entails. This code is believed to be the first adopted in the history of the U.S. car rental industry and sets forth the path that ACRA members commit to follow now and in the future.
State Legislative Activity
It may not be known to the majority of ACRA members, but a group of larger ACRA members track and support (or oppose) dozens of state legislative proposals every year. In some cases, ACRA members take the lead on promoting these bills, or work actively to kill a proposal. In other cases, ACRA and its members join with other stakeholders to support or oppose proposals. And in still other instances, ACRA simply monitors the progress of legislative proposals that might be of interest to the domestic car rental industry.
The ACRA Board formalized this ACRA state legislative activity in January 2024 and a matrix of legislative initiatives is being prepared and tracked by ACRA members. Attached is the late January version of that matrix (January 2024 ACRA State Tracking Matrix) – just to give you a sense of the wide variety of state legislative initiatives that are out there, the value of your ACRA membership, and the work that is being done on your behalf by others in the industry – whether you know it or not. If you have questions on any of these state legislative initiatives and/or want to assist in moving or killing these initiatives, please contact Greg Scott at gscott@merevir.com.
2024 International Car Rental Show
Planning is well underway for the 2024 International Car Rental Show in Las Vegas from April 15 – 17, 2024 at the Horseshoe Las Vegas. Please note the change in the standard days of the 2024 show – it will run from Monday through Wednesday (rather than Sunday through Tuesday). ACRA members again will receive a special discount registration rate for the 2024 ICRS – a discount that for many is more than your 2024 ACRA membership dues! So – don’t delay! When you receive your 2024 ACRA membership dues invoice from Sharon, process it quickly to take advantage of the 2024 ICRS registration discount. See you in Las Vegas in April 2024!
Mark Your Calendars – 2024 ACRA D.C. Car Rental Conference – September 15 – 18, 2024
Building on the tremendous success of the 2023 ACRA D.C. Car Rental Conference –overwhelming positive feedback on operational and political education, record attendance, record fundraising for ACRAPAC, and dozens of meetings with legislators and their staff on key ACRA federal policy issues – the ACRA Board of Directors has set the 2024 ACRA D.C. Car Rental Conference for Sunday through Wednesday, September 15 – 18, 2024. Mark your calendars! ACRA will return again to the Westin Gateway Arlington and will focus a day on operational education session from expert speakers, a day on political education from key stakeholders and legislators, and a day of “citizen lobbying” on Capitol Hill to build relationships and advance the interests of the car rental industry as a whole.
Stay tuned for additional details. Remember, the 2023 and 2024 ACRA D.C. Conferences sold out and the hotel ran out of rooms for attendees. So, when the 2024 registration and hotel information is published, jump on it so be sure you are not excluded from the conference next year!
ACRA State Actions
- Oregon – ACRA sent a letter (ACRA Redmond Letter) to the Redmond, Oregon city counsel opposing a 13.5% car rental tax in that city and talked with local media about the misperceptions regarding the impacts of such discriminatory state excise taxes (Press Story on Redmond Car Rental Tax).
- Hawaii – ACRA send a letter (ACRA Hawaii VLF Letter) to oppose a proposed repeal of that state’s vehicle licensing fee recovery law.
ACRAPAC
ACRAPAC had a record year in 2023, with ACRA member company PACs and executives contributing over $40,000 to the PAC. The PAC entered 2023 with a bank balance of over $20,000 – positioning the PAC to make impactful contributions during the 2024 federal election year. If ACRA member company executives will support ACRAPAC in 2024 at the same level as last year, it will be a true milestone for ACRAPAC. ACRAPAC events are already being planned for the ICRS in Vegas in April and the ACRA D.C. Car Rental Conference in September, so there will be plenty of opportunities for folks to support the PAC. If you have questions about ACRAPAC, please contact Sharon or Greg.
ACRA Membership Activity
New Associate Members
- HopDrive, Richmond, VA
- True Partners/Lamb Insurance, New York, NY
Renewed Associate/Supplier Members
- 1st Source
- ACE Rent A Car
- Ally Smart Auction
- Auto Rental Solutions
- Bonzah.com (by Pablow, Inc.)
- CARWIZ International
- CBIZ Insurance Services, Inc.
- Collateral Consultants
- Copart
- DamageID
- Element Fleet Management
- FleetMaster
- Global Toll Services
- Guidepoint Systems
- HQ Rental Software
- Hull & Company (Mile High Markets)
- INVERS
- Lancer Insurance
- NS Wash System
- Polsinelli
- PureLine
- Ridecell
- Sofiac Travel
- Sonoran National
- Tollaid
- Tollspot
- Triad Insurance Management
- TSD Mobility Solutions
- We Buy Key Fobs
- Wenn USA
- Wheels Car Rental System
- Williams & Stazzone
- Zubie
Renewed Regular/Operator Members
- 4A Road Forward LCC Priceless Rental
- Aero Corporation/Budget Rent A Car PA
- Amazing Car Rental, Inc.
- American Auto Rental LLC
- Avis Budget Payless Association
- Auto Rental Etc.
- Auto Rental Services LLC
- Budget Ketchikan First City Rental LLC
- Budget Norwalk CA
- Budget Rent A Car Las Vegas
- Budget Rent A Car Atlanta
- Carretela Auto Rental
- Cavenaugh Auto Group
- City Rent A Truck
- Datura Auto Rentals
- Dirt Cheap Car Rental
- Dollar Rent A Car Seattle CMC Investments, Inc.
- Economy Rent A Car
- Eden Car Rental
- Famous Rent A Car
- Hertz, Dollar, Thrifty Franchise Massachusetts
- Hertz Triple J
- Kuehn Rental LLC
- LA Auto Spot
- Lia Auto Group
- Lux Motor Cars & Leasing dba Green Motion Car and Van
- McCurry Van & Car Rental
- Midway Auto Group
- Midwestern Wheels, Inc.
- Missoula Adventure Rentals
- NC Auto Rentals LLC
- NU Car Rentals
- RENTAVAN
- Ride Rental Cars
- Roam Auto Rental
- Rugged Rental
- Spinners, Inc. dba Budget Car Rental
- Thrifty Car Rental – STL
- U-Car Share
- Walser Specialized Services
- Wing Auto LLC