Valentine’s Is Not so Sweet for Florists | Commentary

Posted February 12, 2015 at 2:33pm

Florists count on Valentine’s Day revenues much like other retailers count on Christmas — a good holiday can make or break a shop’s financial year. To capitalize on an expected increase in business every February, many florists will rent vans or moving trucks to supplement their fleets, move extra stock and make deliveries. Unfortunately, when they do so, florists are forced to pay discriminatory taxes on the trucks they rent.

Congress needs to take a look at this important issue as soon as possible and pass a common-sense solution to provide relief for all small businesses that use truck rentals, whether during the Valentine’s Day season or otherwise.

Since 1990, more than 100 discriminatory car and truck rental taxes have been imposed on consumers at a cost of $7.5 billion, often to pay for novelty projects such as sports stadiums, convention centers or concert halls. While much of the focus on these unfair taxes has been on travelers and other general consumers to date, the approach of Valentine’s Day highlights how these discriminatory taxes actually hurt small businesses — and the communities they serve.

Here’s how it works: a business needs to increase its cargo capacity temporarily, but can’t afford (and doesn’t really need) to make a significant capital investment in a new truck or trucks. So the company goes to a local car and truck rental business, and rents one or more trucks. Obviously, the cost of the rental itself is expected overhead for these businesses, but adding unnecessary and discriminatory taxes on top of this cost is both unfair and bad for business and the economy.

Why? Every dollar these businesses spend on discriminatory taxes — often unexpected — is a dollar not spent on maintaining or expanding their businesses, paying employees or driving growth in their local communities. Or, even worse, the costs are passed on to consumers, creating inflationary pressure on myriad products and services, and making it harder for consumers to make ends meet.

Both of these scenarios are unacceptable, especially in an economy that is just barely in recovery—and even more especially to fund the pet projects of politicians and billionaire sports team owners.

Because this is a national problem, we need a national solution. The federal government needs to step in and tell states and municipalities that these kind of discriminatory tax shenanigans are unacceptable. It’s past time for Congress to pass the bipartisan End Discriminatory State Taxes for Automobile Renters Act, which would prevent the imposition of discriminatory taxes on car or truck rentals.

If Congress works in the interests of its small-business and consumer constituents, it will help restore fairness to the car and truck rental market. If it doesn’t, both consumers and small businesses will continue to be penalized with discriminatory taxes.

To me, the choice is more than clear.

Jake Jacoby is president and CEO of the Truck Renting and Leasing Association.Want More Stories Like This? Subscribe to our Thought Leaders Newsletter.