City Council Learns More About Proposed Car Rental Tax

The tax would bring in close to $1 million per year

Renting a car may become more expensive in the Sioux Empire.

The Sioux Falls Development Foundation is proposing a $3 increase tax per day on rental cars.

The organization spoke to the Sioux Falls City Council during an informal meeting today saying the proposed tax is estimated to bring in close to $1 million a year.

That money would go toward the development of Foundation Park, which is an 850 acre industrial park planned near the intersection of I-90 and I-29. 

“When a city is growing, a city is vibrant; a city is prospering for the benefit of all of its citizens,” says Sioux Falls Development Foundation Chairman Dale Froehlich on the reason behind developing Foundation Park. 

He says the park is expected to bring in over 450 jobs to the area with minimum salaries of $35,000 to $40,000.

A salary range that Councilwomen Michelle Erpenbach doesn’t think is enough. 

“We’ve got a lifestyle here and we would really like to have those folks participate in that lifestyle, and I’m concerned that this wage becomes something that we really look at,” says Erpenbach. 

But bringing in these jobs won’t come without a price. 

“We propose an ordinance from the city to create a daily charge on car rentals, and it would be established at $3 a day,” says Froehlich. 

Enterprise, which is the largest car rental company in the area, is against this increased daily charge, issuing a statement saying “car rental excise taxes are different from other taxes because they are regressive, discriminatory, economically harmful and violate the Constitution.” 

Froehlich says 80 percent of the increased price will be paid by visitors, while Councilmen Rick Kiley says he received an email from a car rental company saying that percentage is much less. 

“I don’t think it would stop me from coming because you have to have good roads, you have to have things taken care of and all of that are benefits to the travelers as well,” says Michelle Pearson from North Carolina. “Even if we’re not paying any taxes to the state, we still get the benefit of services in the state.” 

”Its $3, and I know it goes to the local economy,” says Aaron Felman from Colorado. “I don’t think it’s that big of a deal.”

If the council decides to approve this proposal, it would still need to be passed by a public vote, which would take place on April 12.

If approved by both, the new tax would start on July 1.

Dale Froehlick says other cities in the area that have a similar tax include Rapid City, Omaha, Des Moines and Minneapolis.