Ever book a rental car in Florida? If so, you've seen a pervasive "Florida Rental Car Surcharge" of $2 per day. This state-specific surcharge is in addition to all the various taxes and fees we ordinarily see on rentals and the purpose of the tax is in the name. It's a surcharge on rental cars for the State of Florida's benefit (in more ways than one). And it's a pretty hefty financial benefit -- we're talking $175 million annually in revenue, $2 at a time. So what's this fee and how is it used?
Tallahassee doesn't want Johnny Cash, just revenue!
The Florida Rental Car Surcharge is $2 per day on the first 30 days of a rental, except when a user decides to use a car-sharing service like Zipcar for less than 24 hours. A Zipcar user for half a day gets charged just $1, while an Enterprise ("traditional" rental car) customer gets charged $2 for the identical timeframe. Fair? It's government, so fairness doesn't always compute in the equation! After 24 hours, both groups are treated (read, punished) equally at the $2 per day. And Florida law requires that the rental car companies charge sales tax on the $2 per day Florida fee.
What are the mechanics of this surcharge?
One may think -- looking through the regulations and seeing forms where the fee has to be reported by county -- that the state's fee gets allocated by county. One may also think that the fee -- reported on a Solid Waste and Surcharge Tax Return -- might have some environmental purpose. One would be wrong on both counts.
The fee of $2 per day -- on top of all the other "customary" rental car fees -- initially goes to the State and is broken up as follows:
- 80 percent to the State Transportation Trust Fund
- 15.75 percent to the Tourism Promotional Trust Fund
- 4.25 percent to the Florida International Trade and Promotion Trust Fund
State Transportation Trust Fund
Florida has tolls, and if the bulk of the fee going to the State's Transportation Trust Fund sounds like a hidden toll, that would be an accurate assessment. Plus the "closet toll" gets sales tax assessed! And that $1.60 per day seems relatively small until one realizes it raises a nice $140 million per year for the State of Florida. The proceeds from this trust fund don't go back to the county where the fee was raised but does go (by law) back to the district (except Turnpike District) where the fee was collected.
Tourism Promotional Trust Fund
As this allocation is just about 20 percent of the previous amount, we would expect $25-30 million of this fee to be generated from 31.5 cents per rental day. The Visit Florida website is one of the clearest examples of this tourism promotional trust fund in use, and the initiatives of Visit Florida are designed to multiply any expenditures into a greater number of visitor tax dollars. Jobs might be an ancillary benefit but with taxes, it's all about the benjamins.
Florida International Trade and Promotion Trust Fund
Only 8.5 cents per day of this rental car fee goes to the Florida International Trade and Promotion Trust Fund and those funds go to Enterprise Florida. Don't feel bad that they "only" receive about $7.5 million from the rental car fee, as most of their $45 million budget comes from elsewhere. And just remember, if you visit Florida from out-of-state and rent a car, you're directly helping Florida steal business from your home state (or country)!
Renting a car in Florida? You'll be helping maintain infrastructure (through this fee, tolls, and fuel taxes), convincing others to visit Florida, and even helping to promote Florida as the best place to relocate a major corporate headquarters! The other "traditional" taxes and fees? Those go to pay off the airport and -- in the case of sales taxes -- simply go into some government's General Fund. Even though the State of Florida has no personal income tax, politicians are more than happy to collect maximum revenue from tourists and residents who rent cars!
Fees, facility charges, and taxes got you confused and/or down? The Fee Detective can explain. Send your query to email@example.com and we may feature your question in an upcoming post.