Jun. 4—Norman residents could pay a rental car tax to potentially fund a local sports commission through VisitNorman.

The business and community affairs council committee met Thursday to discuss options for levying a tax on rental cars following a suggestion from a local resident at a prior meeting. The fee would be added to the state's 6% rental tax on gross receipts of motor vehicle rental agreements, provided it doesn't exceed 90 days.

The question would be on a ballot in a future municipal election if approved by City Council.

City attorney Kathryn Walker said the tax is paid by the rental customer to the company, which then remits it to the state. Walker said the city would have to amend its sales tax ordinance and require a vote of the people to change or add a rental tax because it's not part of the Streamlined Sales Tax Act.

"I think we would have to amend our code and thus the sales tax authorization — we would essentially be imposing a new tax. It's not really considered a sales tax," Walker said.

While language exists in the statute to authorize the collection of hotel and motel tax as a standalone, similar language doesn't exist for other areas. Walker said the city would likely have to collect the tax, but they "have a system in place for that."

Hotels and motels remit 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 according to the state tax commission, from 2019 until the present, revenue generated in Norman from rental vehicles averages out to $14,800 per month.

Norman has two car rental companies, Hertz and Enterprise.

"If you have a 5% rate, you have about $18,000, and 6% is around $22,000 per month," Huckabaa said.

Ward 8 councilmember Matt Peacock said they are considering a flat fee as opposed to a percentage, so renters would know what to expect. He initially suggested a $10 fee but said more research into what other states are doing is necessary before determining a proposed amount.

Peacock said while the city is asking voters to choose on a number of issues in the next year, further efforts to get a rental tax passed would ultimately benefit Visit Norman and other entities that help pursue tourism initiatives.

As of now, it's unclear to the committee whether the city could call it a "rental fee" or if it could be a "flat rate," while remaining a tax.

Ward 4 Lee Hall suggested further discussion on which entities the rental tax would benefit.

Peacock said the goal is to provide revenue to the entity that can give Norman the most return, which is why he initially sees VisitNorman as a fit.

"Increasing tourism generates increased fees, and it's just very cyclical in nature," Peacock said.

Multiple sports venues coming to Norman include the Young Family Athletic Center and the largest outdoor sports complex in the region with 22 soccer fields and 14 baseball diamonds.

VisitNorman executive director Dan Schemm, who organized a 501C3 nonprofit sports commission following the passage of Norman Forward, believes travel for youth athletics to Norman will see a huge boost.

The paperwork is finished, but the funding source is still uncertain.

One possibility, Schemm said, is a tourism improvement district, similar to business improvement districts with hotels, currently held up due to awaiting signatures on federally-owned vacant property. Another option is a rental vehicle tax or fee, which Schemm said would allow VisitNorman to immediately put funds toward the sports commission.

Schemm said a local rental tax or fee could be used by the commission to help sponsor tournaments and incentivize Norman as a host for future youth athletic tournaments and events, whose organizers often look for sites that offer subsidized amenities.

"One of the things that we have to do to bring something like that in is to sponsor the opening night ceremonies, provide some amenities for the refs and other things," Schemm said.

Discussion on the issue will resume once the committee has more information on what the funding for the sports commission will be, as well as examining revenue goals and what other cities are doing with rental tax or fees.

"The only path forward is to go to the vote of the people, and the more data we have to make those decisions the better," Peacock said.

Jeff Elkins covers business, living and community stories for The Transcript. Reach him at jelkins@normantranscript.com or at @JeffElkins12 on Twitter.