Although revenue figures seem a little shaky, the Davis County Commission Monday approved a measure to impose a 3 percent tax on rental cars aimed at tapping into the county's growing tourist economy.
The tax is one of three allowed under state law aimed specifically at extracting revenue from visitors and, in turn, restricts its use to cultural, historic, and recreational purposes."Tourism is a fast-growing source of revenue to our county," said Davis Commission Chairman Gayle Stevenson. Figures from the Utah Tax Commission rank Davis as the sixth county in the state in tourism-related income.
The tax commission estimates the county generated $164 million in tourism-related income last year, only $5 million behind fifth place Washington County's $169 million.
Figures provided by the tax commission estimate the 3 percent rental-car tax will generate $90,000 annually in the county, but commissioners and county budget analyst LaMar Holt are wary.
"We would need $3 million a year in car rentals every year to generate that," Holt said. "That's a fantastic figure. Where is this coming from?"
The commissioners agreed to take a wait-and-see position on the revenue, waiting to include it in next year's budget until they see the actual amount.
The tax takes effect Oct. 1. Stevenson said Weber County, too, has agreed to impose it at the same time "so we're all on the same playing field" and customers can't avoid the surcharge by renting in an adjacent county.
The state law allows counties to impose the tax on short-term vehicle rentals, which it defines as less than 30 days, so it's aimed at tourists and visitors. It also has an exemption so residents renting a car while theirs is being fixed are not taxed.