Drivers headed to Denver International Airport navigate congestion along Peña Boulevard on Friday, Dec. 6, 2024. (Hyoung Chang/The Denver Post)
A federal judge has ruled that Colorado can impose its daily fee on rental cars at airports, rejecting a lawsuit from the rental industry that sought to narrow the new law.
Senate Bill 184 was approved by two-thirds majorities of the Colorado Senate and House last spring and signed by Gov. Jared Polis. It took effect Jan. 1. The fee of up to $3 per day on rental cars is forecast to raise $147 million in its first three years, the state says.
The fee was created “so that out-of-state visitors who contribute to wear and tear and congestion on Colorado’s roads help pay for transportation,” according to the state. The money will be spent on Front Range and mountain rail projects, along with bus services.
In September, the American Car Rental Association sued to prevent aspects of the law from taking effect. The industry group argued the congestion fee could not be assessed at airports, since air travel is federally regulated and states are limited in their ability to tax it.
On May 29, U.S. District Judge Daniel Domenico disagreed: “Though the plaintiff’s argument is not implausible,” he wrote of ACRA, “I am convinced that defendants are correct.”
Domenico, who was nominated for his judgeship by President Donald Trump, worried it would be “discrimination in favor of airport businesses” and would “give airport businesses an effective subsidy” if he allowed the congestion fee elsewhere in the state but not at airports.
“If Colorado were to pass a new fee on sales of plastic water bottles, for example (as it has done with plastic grocery bags, much to my chagrin),’” the judge opined, ACRA’s position “would require that this fee not apply to any plastic water bottles sold at airport locations.”
“This would result in a strange state of affairs where consumers of certain goods would have an affirmative financial incentive to purchase them at airports,” Domenico wrote.
A CDOT spokesman, Matt Inzeo, declined to comment on the decision. ACRA did as well.
Drivers headed to Denver International Airport navigate congestion along Peña Boulevard on Friday, Dec. 6, 2024. (Hyoung Chang/The Denver Post)
A federal judge has ruled that Colorado can impose its daily fee on rental cars at airports, rejecting a lawsuit from the rental industry that sought to narrow the new law.
Senate Bill 184 was approved by two-thirds majorities of the Colorado Senate and House last spring and signed by Gov. Jared Polis. It took effect Jan. 1. The fee of up to $3 per day on rental cars is forecast to raise $147 million in its first three years, the state says.
The fee was created “so that out-of-state visitors who contribute to wear and tear and congestion on Colorado’s roads help pay for transportation,” according to the state. The money will be spent on Front Range and mountain rail projects, along with bus services.
In September, the American Car Rental Association sued to prevent aspects of the law from taking effect. The industry group argued the congestion fee could not be assessed at airports, since air travel is federally regulated and states are limited in their ability to tax it.
On May 29, U.S. District Judge Daniel Domenico disagreed: “Though the plaintiff’s argument is not implausible,” he wrote of ACRA, “I am convinced that defendants are correct.”
Domenico, who was nominated for his judgeship by President Donald Trump, worried it would be “discrimination in favor of airport businesses” and would “give airport businesses an effective subsidy” if he allowed the congestion fee elsewhere in the state but not at airports.
“If Colorado were to pass a new fee on sales of plastic water bottles, for example (as it has done with plastic grocery bags, much to my chagrin),’” the judge opined, ACRA’s position “would require that this fee not apply to any plastic water bottles sold at airport locations.”
“This would result in a strange state of affairs where consumers of certain goods would have an affirmative financial incentive to purchase them at airports,” Domenico wrote.
A CDOT spokesman, Matt Inzeo, declined to comment on the decision. ACRA did as well.
