Council Member Bill Bryan motioned to reject Mayor Gene Hobgood’s proposal to collect a 3 percent excise tax on car rentals within the city. The motion to reject passed in a 5-1 vote with Council member Glenn Cummins dissenting.
The car rental tax, similar to a hotel/motel tax, had been proposed as a means of funding rental assistance for small businesses interested in opening downtown.
Canton Main Street director Ginger Garrard proposed the idea for the tax to the city council in February. The council discussed it several times during the spring, but Thursday night was the first and only vote on whether to enact the tax.
Angie Wiggins of Enterprise Rent-A-Car spoke against the proposal during the meeting’s public comment time.
“We pay our managers based on our profits. Some of this will be passed onto customers, and some of it we will have to absorb,” she said.
Wiggins added that the tax would affect local citizens and businesses that use car rental services.
Canton resident Daniel Shilling said he uses Enterprise and he didn’t want to see the city putting a tax burden largely on one business. Two other businesses with car rental services are located inside Canton city limits, but Enterprise represents the largest share of car rentals in the city.
Shilling suggested the city look at alternate funding for downtown improvements, such as a beverage tax.
Cummins said the tax, based on usage, would be a smart way to fund the Main Street program.
“It is a pass-through tax. It does not affect the base car rental price,” Cummins said. “We’ve agreed that we want to move forward with Main Street development. This is an excellent way of obtaining funds.”
Hobgood said before the vote was taken that rejecting the excise tax would be a “slap in the face” to the boards of the Downtown Development Authority, Canton Tourism and Main Street.
Canton Main Street Director Ginger Garrard said Friday that several downtown projects will be put on hold until the city can find another way of providing more money for Main Street.
“We had a lot of programs that we wanted to use this money for. Not just rental assistance, but for helping downtown,” she said.
Garrard maintains that the car rental tax is a pass-through tax that would not affect companies’ profits.
“The Main Street board and I are very, very disappointed in council’s decision to vote the rental car tax down,” she said.