A bill authored by Fairbanks Democrat Rep. Adam Wool would tax the gig economy, such as those who rent their personal vehicles through car-sharing companies like Turo.
Turo will probably stop allowing people to use its platform in Alaska if the HB 90 passes, because if people have to collect the tax for Turo, federal tax laws govern the company differently and treat these car owners more like employees.. For those who make a little money on the side by renting their personal cars out, it could be the end of a good side gig.
Communities like Juneau and Anchorage have seen a lot of person-to-person rental vehicles available, especially over the past two years when car rental companies were selling off their fleets due to not enough demand during the Covid pandemic economy. When the fleets were sold off, the prices for existing rental cars skyrocketed. Meanwhile, the car rental companies received tens of millions of dollars from the federal government as pandemic aid to their businesses.
In 2021, it was nearly impossible to find a standard car rental on the road system in Alaska during the tourist season. Prices were typically over $300 a day.
At the same time, Alaskans who were being laid off due to the pandemic and who needed some extra cash filled in the gap, so that tourists coming to Alaska on vacation could find affordable vehicles to rent. To cover themselves with insurance and the vetting of renters, people renting their cars to others use companies like Turo, which has a big legal infrastructure to protect both parties in a rental arrangement.
The Wool bill could impact over 1,200 people in Alaska who have rented or shared their vehicles through Turo or a similar company.
Today, a rental of a used personal vehicle in Anchorage through Turo could cost someone about $70-$100 a day, depending on the make and model, with similar prices found in Juneau. In Fairbanks, current Turo-listed cars are starting at $179 a day and can be as high as over $300 a day.
According to Wool, “HB 90 adds a definition for the new service of providing private vehicle rental programs, including these services into existing statutes that regulate car rental providers to reflect changes in how people secure transport in Alaska. It also extends the same laws and regulations which apply to rental car companies to private vehicle rental networks, including the payment of the State’s Vehicle Rental Tax. Therefore, HB 90 brings equity to the rental industry for motor vehicles, and will generate additional income for the State’s general fund as the private vehicle rental network industry continues to grow and diversify in the Alaskan economy.”
