NewsMaryland and other states push new taxes on Rental car fleets
States are targeting Rental car company fleet purchases. They want to add a new sales tax. This creates double taxation on every single rental. Your Rental costs could rise as a result. Business equipment should not be taxed like this. It hurts the bottom line for these firms.
If you rent a car for your next business trip, look closely at the fine print on your receipt. Lawmakers in states like Maryland, New York, and Hawaii are pushing to tax the cars themselves before they even hit the Rental lot. Maryland already started a 3.5 percent tax on new Rental fleet registrations as part of their 2025 budget. Imagine a construction company paying sales tax on every forklift they buy to do their work. That is exactly what is happening to Rental car fleets right now. These companies do not buy cars for personal use. They buy them as the essential machinery of their business. When a state taxes the car purchase and then taxes the Rental fee, you are paying for the same dollar twice. This is called double taxation. Legislators in states like Massachusetts and Washington have tried to pass similar bills, but most are stalling in committee. Hawaii is even considering raising their existing wholesale tax on these fleets to a full 4.5 percent. When these companies pay more to buy their inventory, those costs inevitably roll down to the person at the counter. You end up paying more for your weekly Rental or your airport pickup because the government wants a cut of the asset before it ever earns a dime. It is a classic case of tax pyramiding that adds up fast. Keep an eye on your next Rental invoice, because you are the one ultimately paying for these new state revenue grabs.