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A bill to impose a tax on rental cars and recreational vehicles passed the Alaska House Finance Committee on May 7, according to the Associated Press.
The measure would impose a 10% tax on car rentals and 3% tax on rented RVs.
The Alaska Department of Revenue estimates the combined revenue from the taxes would raise about $6 million in its first full year. In the fiscal year that begins July 1, the measure would raise about $4 million.
House Speaker Pete Kott, R-Eagle River, proposed the measure as a way to generate state revenue from tourists and travelers. Kott originally proposed a 15% tax on rental cars as a way to raise $7.5 million.
The bill was amended during the committee process to lower the tax rate on rental cars and impose a tax on RVs.
The House Finance Committee signed off on the changes and sent it on to the floor for a vote.
Reps. Kevin Meyer and Mike Hawker, both Anchorage Republicans, and Bill Stoltze, R-Chugiak, recommended passage of the measure along with House Finance co-chairmen John Harris, R-Valdez, and Bill Williams, R-Saxman.
Rep. Eric Croft, D-Anchorage, gave the measure a “do not pass” recommendation, and Reps. Mike Chenault, R-Nikiski, Jim Whitaker, R-Fairbanks, and Richard Foster, D-Nome, gave no recommendation.
Kott had said that such a tax was unlikely to be paid by by most Alaskans and that it was one of the least painful measures to help balance the state budget. He estimated tourists would pay about 80% of the tax.
Car-rental companies opposed the bill and said it would impose one of the highest taxes in the country on their business at a time when the state’s tourism industry is anticipating fewer vacationers.
Anchorage already has an 8% rental car tax in addition to a 10% airport fee.