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Gainesville forgoes rental car tax
City says income wouldn't justify extra work
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The city of Gainesville will not be picking up a new rental car tax, for now.

Gainesville City Council considered a rental car excise tax at a work session on Tuesday after the city's Finance Department laid out the particulars.

Ultimately, city council closed the door on implementing the fee after a report from staff suggested implementing the fee could be a lot of paperwork with little to show for it.

Gainesville has only two rental car businesses to draw from, city staff reported.

"For the small amount of benefit," said Mayor Pro-Tem George Wangemann, "I don't think it would be worth the effort involved."

Under state statute, local governments can implement a 3 percent tax on rental cars, said Melody Marlowe, Gainesville's Administrative Services director.

Revenues collected from the tax would have limited uses for the city.

It could be used to promote industry, trade, commerce and tourism, but could not be used for the city's general fund.

According to a survey of other Georgia cities compiled by the Finance Department, Marietta draws $285,000 annually from the tax with 15 rental car businesses and Athens brings in $146,000 with nine.

However, other cities with two or three rental car business make between $48,000 and $60,000 from the tax.

Marlowe estimated the tax would raise about $38,000 annually for Gainesville.

In order to enact such a tax, the city would have to write a new ordinance.

Once in place, the city's finance staff would have to keep track of sales for collection.

City council members said that the extra legwork probably wasn't worth the relatively small additional revenue.

"Your staff is already overworked." Councilwoman Ruth Bruner told Marlowe.

Instead, council members asked Marlowe to keep an eye on the rental car business in the city. If demand increases, the city could reconsider.

"At least we've gotten this far," said Councilwoman Myrtle Figueras.

 

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