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It’s just a bill

Wednesday, May 23, 2018

* Greg Hinz

If you liked Airbnb versus the hotel industry or Uber-Lyft against taxi operators, a similar fight over what rules to apply to car-sharing companies is brewing in Springfield. And it could turn into a beaut, with the future of the transportation business and millions of dollars a year in tax income at stake.

Pending before the House Executive Committee is a bill backed by Enterprise and other traditional car-rental firms that would require emerging car-sharing competitors to follow the same licensing and regulatory rules that they do. The new competitors, such as San Francisco-based Turo, do not own and rent their own vehicles but instead use an app-based system in which travelers lease cars directly from individual car owners, with Turo playing intermediary.

Turo spokesmen argue that the bill, which is scheduled for a committee hearing tomorrow, would “effectively slow or stop Turo’s ability to offer a marketplace to 200,000 Illinois citizens and similar peer-to-peer car sharing companies.”

The company also argues that the 6,600 renters it has in the state, or “hosts” in company jargon, already are at a competitive disadvantage, because unlike Turo, they are exempt from paying the state’s 7.25 percent sales tax on car purchases.

But advocates of the bill say it’s the traditional firms that are losing out because lower-priced upstarts aren’t held to the same disclosure, insurance or consumer protection standards.

* Other bills…

* It’s ‘gut-check time’ for lawmakers on legislation to curb sexual harassment: The sexual harassment omnibus legislation Bush introduced expands the definition of harassment and extends discrimination protections to independent contractors. It would give workers two years, rather than six months, to file charges and sue. It would require reporting of settlements from large public contractors and employers, and prohibit non-disclosure agreements unless the victim wants one. Among other things, it also requires a panic-button system for hotel workers and mandates that anyone who works in youth sports be required to report abuse suspicions to the Department of Children and Family Services.

* New version of Trump tax-cap workaround goes to lawmakers: ​ Under the new version, instead of paying taxes and losing some deductions as per the law enacted by the GOP Congress and President Donald Trump, taxpayers would be allowed to donate to “charitable funds” set up to benefit state and local school districts and municipalities. Donors would get a tax credit worth 90 percent of the donation that would be used to offset their state income or local property tax liability, and because federal law does not limit charitable deductions, the donation would be fully deductible, not capped at $10,000. In an interview, Morrison said she added the 90 percent credit—down from 100 percent in the House bill—with an eye toward the IRS, which some tax experts believe will block a dollar-for-dollar credit as a sale of sorts and not a charitable donation. “We want maximum integrity,” Morrison said.

* Editorial: Sexual assault nurses needed STAT: The bill passed the House 101-0 in April. It would require the 160 Illinois hospitals that treat sexual assault victims to make a SANE available within 90 minutes after a patient arrives in an emergency room. That’s a significant compromise from the not at all unreasonable standard of having a SANE on hand 24/7.

* Wednesday hearing to focus on other Rauner public safety proposals: The Illinois House is set to hear testimony about a slew of measures Gov. Bruce Rauner has raised to enhance public safety, and among them is freeing up money for armed school resource officers. The House heard the governor’s plan Monday to bring back the death penalty for cop killers and mass murderers, but other issues the governor injected in a bill he changed with his amendatory veto are slated for a Wednesday hearing.

* Illinois Lawmakers Consider National Rap Back System: When a new employee is fingerprinted for a job in Illinois, the employer receives a snapshot of their criminal record, and they receive notifications for any future run-ins with the law in the state. But lawmakers are considering a proposal that would also allow employers to be notified of convictions that happen across state lines.

* State Lawmakers Consider “Voices Act” to Help Immigrant Crime Victims: The measure, SB34, doesn’t change any immigration rules, but instead requires Illinois police to more quickly certify that someone is a crime victim. That gives them a special visa so they can stay as long as they cooperate with an investigation.

- Posted by Rich Miller        

17 Comments
  1. - 47th Ward - Wednesday, May 23, 18 @ 10:44 am:

    ===lower-priced upstarts aren’t held to the same disclosure, insurance or consumer protection standards.===

    And that’s the business model for Turo and others. It’s wrong. If you’re in the business or renting cars, you need to follow the same rules, whether you’re Alamo or a peer-to-peer start-up.

    These so-called disruptors like Uber and Airbnb, exist because they break the law to get established. That’s not innovation, that’s perversion.


  2. - SSL - Wednesday, May 23, 18 @ 10:47 am:

    It will be interesting to see how the IRS addresses the attempts by high tax burden states to mitigate the tax caps under the new Trump plan. I don’t see them allowing it, and I don’t like arguing with the IRS. They have zero sense of humor.


  3. - SAP - Wednesday, May 23, 18 @ 10:53 am:

    ==The company also argues that the 6,600 renters it has in the state, or “hosts” in company jargon, already are at a competitive disadvantage, because unlike Turo, they are exempt from paying the state’s 7.25 percent sales tax on car purchases.== Enterprise doesn’t pay sales tax on the purchase of its vehicle inventory because it pays Automobile Renting Tax instead. The don’t just get a freebie.


  4. - Cheryl44 - Wednesday, May 23, 18 @ 10:59 am:

    Enterprise bought I-Go and killed it off. I guess it can’t stand competition.


  5. - Grandson of Man - Wednesday, May 23, 18 @ 11:14 am:

    I hope we can pass a SALT workaround, one that would hold up with the IRS.

    Speaking of taxes, California’s budget surplus has grown to almost $9 billion, up from the recent $6 billion. California has options on how to spend the money, but Gov. Brown is reportedly concerned about spending right now and wants to add to the state’s “rainy day” fund, in anticipation of an economic downturn.

    http://amp.sacbee.com/opinion/editorials/article211459384.html

    To me Pritzker’s prospect for success depends in part in pushing a progressive income tax that cuts taxes for very many, and is sold in large part as a tax cut.


  6. - A Jack - Wednesday, May 23, 18 @ 11:26 am:

    “Panic button system” for hotel workers? Wouldn’t that be darned expensive for small hotel operators? Are hotel workers more sexually harassed than other types of workers such as nurses, airline attendants, or prison guards? It’s little requirements like that which make Illinois less business friendly.


  7. - Claud Peppers - Wednesday, May 23, 18 @ 11:54 am:

    What auto insurance would cover this? I realize taxes on car rentals is outrageous. I have rented a car for $10 a day and the total costs is $80. Most of the these car rental taxes are for airports, tourism commissions and civic services.


  8. - Anon - Wednesday, May 23, 18 @ 11:54 am:

    Illinois has already decided these are not the same industry by giving $199 million tax exemption to rental car industry without extending that to individual car owners. Rental car companies pass transaction sales tax through to their customers!


  9. - Lake Shore Drive - Wednesday, May 23, 18 @ 12:29 pm:

    In order to car share, you have to obtain special insurance coverage. Car sharing insurance is cheap, and it protects the owner of the vehicle and the renter from almost all liability up to $1M. This means it is safer to use a car sharing vehicle than a rental car or even your personal vehicle. With ride sharing, there is a concern about a 3rd party operator. That concern doesn’t exist with car sharing and house sharing (AirBnB). Many/most of the rules and regulations around the car rental industry stem from past attempts by those actors to create a confusing marketplace and take advantage of consumers. Car sharing platforms offer simple agreements and terms of service. They are much more transparent and convenient than your typical car rental platform.


  10. - allknowingmasterofracoondom - Wednesday, May 23, 18 @ 12:31 pm:

    47 Ward - spoken like a true democrat.

    Hopefully they ran the bill through through the appropriate committee, so that labor can whitewash it. Don’t want all these new businesses to non union.


  11. - 47th Ward - Wednesday, May 23, 18 @ 12:44 pm:

    Learn how to spell brother. Maybe you should consider going back to school. I bet your local 2nd grade could find a spot for you.


  12. - Demoralized - Wednesday, May 23, 18 @ 12:49 pm:

    ==Don’t want all these new businesses to non union.==

    What does this have to do with unions?

    Everyone needs to play by the same rules. Do Republicans have a belief that rules should only be for some and not others? Because that’s the implication of your juvenile partisan comment.


  13. - SOIL M - Wednesday, May 23, 18 @ 1:37 pm:

    47 Ward - spoken like a true democrat.
    I am a libertarian leaning republican, and agree with 47th. If you are in the same business, the same rules should apply to all, or to none. The state should not be in the business of picking winners and losers in any industry. Stricter rules and higher fees for one segment of an industry over another segment is picking who can afford to charge lower fees and who cant. Level playing field in any industry is not a democrat only idea.


  14. - Anon Downstate - Wednesday, May 23, 18 @ 1:54 pm:

    “I hope we can pass a SALT workaround, one that would hold up with the IRS.”
    ——————-

    That’s a Tax Court case for sure.

    Actually, there’s a potential problem with doing this that I doubt anyone has thought of. If a tax district is getting any portion of their normal property tax revenue from these so-called “charitable funds” -and- they are using those funds to make payments on any bonded indebtedness, that could become very problematic.

    Bond issues are normally either “General Obligation” (”Full Faith and Credit”; RE property taxes), or “Special Revenue Funds”, which would be non property tax based revenue based.

    Realize that most bond issues require some valid fixed fiscal repayment capabilities as part of their bond payment schedules. This legislation would appear to introduce an element of payment variability into the process. That has the real possibility to create major problems.


  15. - SAP - Wednesday, May 23, 18 @ 2:14 pm:

    ==Rental car companies pass transaction sales tax through to their customers!== Can you give an example of any retailer in any industry anywhere in the United States that does not pass sales tax liability onto its customers?


  16. - California Guy - Wednesday, May 23, 18 @ 2:35 pm:

    I’ve rented a car from Turo and all I can say is that it was very very cool. Turo tries to promote itself as a replacement for Enterprise/Hertz but it’s really not as convenient. Renting a car from Turo to save $10 vs Enterprise is just not worth the hassle. There’s more hassle involved with Turo because it’s some one elses car. You use Turo to rent a Porsche for a weekend. You use Enterprise to rent a Nissan Altima from the airport on a work trip.

    I think Turo might actually be on solid ground to defend against Enterprise. They don’t own any cars - they simply connect you to someone that’s renting a car out. When you rent the car, you buy private insurance through Liberty to cover potential damages.

    Understanding how politics goes though, I fear that we’ll lose Turo just like we lost AirBNB (at least, in most California cities). The decent thing to do here would be to fully revamp how rental car fees work so that innovation (such as Turo) can still exist alongside the big players like Enterprise and Hertz who actively buy out and consolidate their competitors. That’s the consumer friendly approach - change regulations to accommodate new technology and innovation.


  17. - UIC Guy - Wednesday, May 23, 18 @ 3:26 pm:

    On the SALT-cap ‘workaround’ (evasion?) see this from the NYT:
    https://www.nytimes.com/2018/05/23/us/politics/irs-state-and-local-tax-deductions.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region&region=top-news&WT.nav=top-news

    I’m sorry to say that I think the IRS is right: a charitable contribution is something for which you receive no material benefit, which is hardly the case here.

    But I don’t like the cap: our schools and roads and police forces need more resources, not fewer. (I’d prefer eliminating the mortgage interest deduction, because it doesn’t affect those things.) But that’s not the view of the Trump administration, or at least of the Treasury Secretary.


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