In my haste to criticize Gwinnett County’s adoption of a vehicle rental tax to help fund its new Triple-A baseball stadium, I did not properly interpret the proposal. Fortunately, a reader pointed out my mistake, because it turns out that I was giving the county too much credit.
The 3% tax does not apply to all rentals in Gwinnett County: it applies to rentals in unincorporated localities of the county. What is the difference? The difference is that 20% of Gwinnett’s population live in incorporated areas.
Here is a population breakdown of the Gwinett’s 15 incorporated localities.
|Town||Population (2006)||Fun Facts|
|Lilburn||11,542||Home of Jeff Francoeur.|
|Lawrenceville||28,851||Larry Flynt was shot here.|
|Duluth||25,838||Home of Brian McCann and Nick Green.|
|Buford||10,868||Future home of the Gwinnett Braves.|
The map below highlights the incorporated areas within Gwinnett County.
While 28 total renal agencies are currently located in taxable areas, the map shows how easy it is to dodge the tax—you don’t even have to leave the county. Also, I expect many of these 28 locations to relocate to incorporated areas or neighboring counties that do not have this tax. I cannot see how this is going to raise a much revenue.
It is also amazing to see how clueless the government officials are in this whole affair. Thanks to another reader for sending me this article from the Gwinnett Daily Post.
“It takes the burden off the local taxpayers,” Commissioner Bert Nasuti said of the car rental tax, which is also in place in Atlanta to fund improvements made to Philips Arena in the late 1990s. “The reason you do that is so you don’t raise taxes.
“There’s almost no place in the universe that doesn’t have a rental tax,” he added, referring to large cities. “It’s been a part of the finance plan all along.”
Nasuti said he views the car rental tax as similar to the hotel-motel tax, which is charged mostly to tourists and goes to pay back the bonds used to build the Arena at Gwinnett Center.
How is this not a tax increase on Gwinnett residents? It is rare that anyone other than a Gwinnett resident would rent a car from this area, especially after adding a tax. But that is not how Gwinnett officials have been thinking about this.
Lisa Anders of the Gwinnett Convention and Visitors Bureau said the county would still remain competitive with Atlanta for rentals.
In addition to the 3 percent tax for those who rent cars at Hartsfield-Jackson International Airport, another 10 percent surcharge is added to pay for a planned car rental agency location, she said.
“There are a lot more car rental places in Gwinnett than most people think,” Anders said, adding that many hotels and car dealerships have rentals as well as stand-alone facilities in the Duluth area.
Ms. Anders belief that rental prices in Gwinnett will be competitive with the fees at the airport completely misses the point: people who don’t have cars are not going travel from the airport to Gwinnett County—about 30 miles—to rent a car. Is the county assuming that current rental rates will stay the same and that the number of rental branches will remain at 28? I’d love to see the assumptions that the county is using to project $500,000 a year in revenue.
Introducing a car rental tax on unincorporated areas of Gwinnett County to raise revenue is like using a bucket full of holes to bail water. It is unfortunate that the deal has been done and the county is on the hook for a lot of money. It’s time for the county to figure out a better way to pay for the stadium.