Taxes

Taxes and Government Fees Make Up 25 Percent of Car Rental Fees

Travelers make easy targets for revenue-hungry officials.

J.D. Tuccille | 5.18.2026 7:00 AM

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With gasoline averaging about $4.50 per gallon—over six bucks if you're unlucky enough to live in California—President Donald Trump proposes a gas tax holiday to give American consumers a bit of relief. A reprieve from taxes is always welcome, but the real bite isn't the federal 18.4 cents per gallon of gasoline and 24.4 cents on each gallon of diesel fuel. States charge far more, and that's especially true if you rent a car, with gas taxes the least of the problem. In some places, more than half the tab for car rentals comes from taxes and government-mandated fees.

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Car Rental Taxes Add 'Hundreds of Dollars to Vacation Expenses'

Travelers make for easy marks, since they rarely vote in the places that soak them for revenue. The taxes and fees add up. Last year, Tennessee's WSMV4 reported that at Nashville International Airport, car renters are hit by "multiple taxes and daily charges that can add hundreds of dollars to vacation expenses."

Taxes and fees come from multiple levels of government, including states, localities, and authorities such as those that run airports. That makes renting a car more expensive than many people expect.

"Rental cars are some of the most heavily taxed transactions in the United States," Adam Hoffer and Jacob........

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