Car Rental Companies Challenge City Tax
CHICAGO (CBS) -- Three nationwide car rental companies are turning thumbs down on a new Chicago ordinance.
As WBBM Newsradio 780's David Roe reports, Enterprise Rent-A-Car, Alamo Rent-A-Car and National Car Rental -- all of which are subsidiaries of Enterprise Holdings -- are challenging a new law that requires a city tax to be charged on short-term rentals, only for Chicago residents who rent cars in the suburbs.
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The suit filed in Cook County Circuit Court claims the Chicago Transaction Tax is illegal.
The tax in question was amended April 1, and says short-term car rental transactions that take place solely outside of Chicago are subjected to the tax and regulatory provisions for people with a Chicago city address on their Illinois driver's license who rent outside of the city anywhere in the country, the suit said.
The rental companies can avoid the tax by proving the renter did not use the vehicle in the city, according to the suit. Enterprise claims it will incur "huge costs and administrative burdens" to collect, account for and remit the Chicago Transaction Tax on all of its short-term renters outside Chicago.
The six-count suit claims the tax violates the federal due process clause and is seeking an immediate injunction against the City of Chicago and Amer Ahmad, acting director of the city's Department of Revenue.
A spokeswoman for the city's Department of Law was not immediately available for comment.
The Sun-Times Media Wire contributed to this report.
