JUNEAU – The Alaska House of Representatives passed Senate Bill 127, which is legislation that streamlines tax collection processes for vehicle rental platform companies while providing relief to renters and ensuring fairness in taxation.

Senate Bill 127 represents a significant milestone in our ongoing efforts to modernize tax collection methods and promote fairness in the rental vehicle industry. Contrary to misconceptions, SB 127 does not introduce a new tax; instead, it reduces the existing vehicle rental tax by 2%, lowering it to 8% for rental platforms like Turo. This reduction will alleviate the financial burden on renters and stimulate economic activity within the state.

“At its core, SB 127 is about fairness and efficiency,” remarked Representative Kevin McCabe (R- Big Lake). “By clarifying tax collection responsibilities and lowering the rental vehicle tax rate, we are creating a more equitable system that benefits both renters and vehicle owners.”

One of the key provisions of SB 127 is its protection against retroactive tax collection for vehicle rental platform users. This safeguard ensures that renters are not unfairly burdened with unexpected taxes and provides certainty for businesses operating in the rental vehicle market. Additionally, SB 127 represents a collaborative agreement between traditional rental agencies and app-based platforms like Turo regarding tax rates, a consensus supported by the endorsement of the Dunleavy administration.

“We listened to the concerns of Alaskans and businesses alike, and SB 127 reflects our commitment to addressing those concerns while promoting economic growth,” stated Rep. McCabe

Senate Bill 127 was crafted in collaboration with stakeholders and experts in the field, guided by the principle of promoting transparency and fairness in taxation for the benefit of all Alaskans.