Flexcar Bill Out of Gas

Tax exemption dead in Olympia, prices likely to go up.

The car-share tax exemption known as House Bill 2880, which supposedly had a lot of bipartisan support--and the muscle of the Seattle City Council!--in Olympia, is all but dead after failing to gain approval before last week's deadline. Technically, because the bill involved money matters, it could still be resurrected up until the last day of the session (March 13)--but the odds are long and the time is short. Everyone seems to agree on one thing, though: Flexcar (soon to be Zipcar) users aren't renting cars in the traditional sense and shouldn't have to pay rental car taxes, most of which are collected from tourists to pay off things like stadium bonds. Car-share companies haven't had to pay these taxes in the past, but the state Department of Revenue got greedy last year and changed the rule, hence the bill in question. Problem is, if there's an exemption, everybody wants to be a part of it—even the rental car companies. The fear of creating a loophole that would cost the state money ultimately killed the bill. "The concern is that no matter how smart we are, the accountants for the rental car companies are smarter," says Rep. Jamie Pedersen, D-Seattle, one of the bill's co-sponsors. Though Flexcar only operates in Seattle, support for the bill spanned all corners of the state, with sponsors hailing from Vancouver, Spokane, Poulsbo, and Bellingham. Seattle City Council member Jan Drago, who did her own share of lobbying for the exemption, says, "I feel it sends the wrong message to people who are doing the right thing, giving up a car for the economy of using Flexcar." Pedersen says his office got more e-mails on the Flexcar proposal than on anything else this session, except domestic partnerships. "And they weren't just form e-mails," he says. "People were actually taking the time to tell their stories [about car sharing]." With the exemption off the table, Pedersen and other members hope to at least keep money in the budget to help offset the future cost of the tax on Flexcar users—estimated to be an increase of about a dollar per hour. In addition, Gov. Christine Gregoire put a $225,000 grant in her proposed supplemental budget to be distributed through the Commute Trip Reduction Board to car-sharing companies. However, even keeping the grant money alive isn't going to be easy: The funds weren't part of last week's House version of the budget, likely due to the state's dismal revenue forecast. While the grant money is better than nothing, Flexcar spokesperson John Williams says he has concerns about the intricacies of administering it to its members, as well as the uncertainty it introduces. Says Williams, "We'd like not to introduce the question of 'Will there be grant money next year?'"

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