2023 Bills

Companies Like Turo Can Breathe a Sigh of Relief

Have you ever used an app called Turo? Think of it like Airbnb but for cars. Simply put, you can pay a person to rent their car. 

We broke the story years ago about how people were being punished for using apps like these.

Police were giving citations to people renting their cars at Salt Lake City International Airport. The rationale for this was that the renters did not have a permit to rent their vehicles at the airport. 

Since that time, these companies and their competition, companies like Hertz and Enterprise, have been negotiating, trying to work out a deal. Enter SB 121, a bill sponsored by Sen. McKell, which passed during Utah’s 2023 legislative session.

The chief problem: There was an issue of double taxation. Rental car companies had a sweet deal in which they didn’t have to pay taxes upfront when purchasing their fleet of vehicles. They would just pay taxes per rental car transaction.

Conversely, Turo and other apps like it had no such benefits because they are not a rental car company—they are just a platform. The car owners renting out their vehicles were expected to pay the same sales tax that rental car companies paid, even though the car owner had already paid taxes on the car at the time of purchase. That is how they were paying taxes at two different points of time, due to Utah laws not keeping up with innovations.

Senate Bill 121 resolves this issue. Utah now has a more level playing field between traditional rental car companies and innovative companies like Turo.