ACCORDING TO the D. C. auditor, the District is losing about $150,000 a year in revenue because most rental car companies that do business in the city don't register their cars here, and thus don't pay their full share of taxes and fees to the city. The auditor, Matthew S. Watson, found that of the 10,000 rental cars in the metropolitan Washington area, only 245 are registered in the District. There are 17 firms operating 21 rental cars offices in Washington, but most don't have any cars registered here; just two companies account for over 200 of the rental cars that have District license plates.
Most of the other rental cars are registered in Virginia. One reason apparently is the different ways the two jurisdictions tax the licensing of the cars. The District's tax on the title to the car is based solely on the auto's full market value. Virginia's titling tax, however, is based on the difference in price between the car the rental agency is turnind in and the new car it wants to put on the road, so the tax a company pays there can be substantially less than in the District.
An agreement drawn up by the American Association of Motor Vehicle Administrators (AAMVA) would easily resolve the problem. It directs rental car companies to register their vehicles in a jurisdiction in proportion to the numbers of vehicles they rent annually in that jurisdiction. But District officials simply haven't paid much attention to the agreement. So, without strong pressure from the District government, rental car companies have continued to avoid registering their cars in the District. Mr. Watson's recommendation on this matter is as sound as it is obvious: The City should adopt the provision of the AAMVA's agreement. A relatively small sum of money is involved, but the Disrtrict government should be diligent in collecting all the revenues due it.