Residents of Normandy could pay a rental car tax to possibly fund a local sports commission through VisitNorman.
The council’s business and community affairs committee met on Thursday to discuss options for levying a levy on rental cars following a suggestion from a local resident at a previous meeting. The fee would be added to the state’s 6% rental tax on gross receipts from motor vehicle leases, provided it does not exceed 90 days.
The question would be on a ballot in a future municipal election if approved by the city council.
City attorney Kathryn Walker said the tax is paid by the tenant to the company, which then remits it to the state. Walker said the city should change its sales tax ordinance and require a people’s vote to change or add a rental tax because it’s not part of the simplified sales tax law.
“I think we should change our code and therefore the sales tax authorization – we would essentially impose a new tax. It’s not really considered a sales tax,” Walker said.
While language exists in the act to authorize the collection of tax on hotels and motels on a stand-alone basis, similar language does not exist for other areas. Walker said the city should probably collect the tax, but they “have a system in place for that.”
Hotels and motels hand over a 5% tax on their occupancy, and Walker said a similar system including meetings with rental car companies in town seems manageable to establish.
Budget Technician Jacob Huckabaa said that according to the state tax commission, from 2019 to present, revenue generated in Norman from rental vehicles averages $14,800 per month.
Norman owns two car rental companies, Hertz and Enterprise.
“If you have 5%, you have about $18,000 and 6% is about $22,000 a month,” Huckabaa said.
Ward 8 council member Matt Peacock said he was looking at a flat rate rather than a percentage, so tenants know what to expect. He initially suggested a $10 fee, but said more research into what other states are doing is needed before determining a proposed amount.
Peacock said while the city asks voters to choose on a number of issues over the next year, further efforts to pass a rental tax would ultimately benefit Visit Norman and other entities. that help to pursue tourism initiatives.
At this time, the committee is unsure if the city could call this a “rental fee” or if it could be a “flat rate” and still be a tax.
Ward 4 Lee Hall suggested further discussion on which entities the rental tax would benefit from.
Peacock said the goal is to provide revenue to the entity that can give Norman the best return, which is why he initially sees VisitNorman as a good fit.
“Increased tourism drives increased fees, and it’s just very cyclical in nature,” Peacock said.
Among the many upcoming sports venues in Norman are the Young Family Athletic Center and the largest outdoor sports complex in the area with 22 football fields and 14 baseball fields.
VisitNorman executive director Dan Schemm, who organized a nonprofit 501C3 athletic commission after Norman Forward passed, believes travel for youth athletics in Norman will see a huge boost.
The paperwork is complete, but the source of funding is still unclear.
One possibility, Schemm said, is a tourism improvement district, similar to business improvement districts with hotels, currently stalled due to pending signings on vacant federally owned properties. Another option is a levy or vehicle rental fee, which Schemm says would allow VisitNorman to immediately disburse funds to the athletic commission.
Schemm said a local levy or rental fee could be used by the commission to help sponsor tournaments and incentivize Norman to host future tournaments and youth sporting events, whose organizers often seek out venues with equipment. subsidized.
“One of the things we need to do to bring something like this is sponsor opening night ceremonies, provide referee equipment and other things,” Schemm said.
Discussion on the matter will resume once the committee has more information on the funding of the athletic commission, as well as a review of revenue targets and what other cities are doing with taxes or fees. lease.
“The only way forward is to go to the people’s vote, and the more data we have to make those decisions, the better,” Peacock said.
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