The 10th U.S. Circuit Court of Appeals has upheld Colorado’s $3-per-day congestion impact charge on rental cars.
The policy had been challenged by an industry group representing Avis, Hertz, Enterprise, and others, arguing that the tax illegally targets airport customers.
Colorado approved the fee in 2024 on rentals of 30 days or less to address the impact of rental cars on public roads.
The state claims the funding will “equitably support investment in such offsets to reduce congestion on the public highway system.”
The fee is raised annually to adjust for inflation and applies to car-sharing programs and larger vehicles like moving trucks.
The American Car Rental Association, represented by Eversheds Sutherland’s Daniel Schlueter, urged the court to strike down the fee.
The Washington Legal Foundation (WLF), a nonprofit legal organization that says it defends “American free enterprise,” filed an amicus brief backing their position.
“WLF contends that the fee disproportionately burdens airport commerce, violating the Anti-Head Tax Act’s prohibition on state-imposed levies that are not uniformly applied to airport sales or services,” it said in a September 2025 statement.
Finding the fee generally imposed, and not targeted at tourists, U.S. District Judge Daniel Domenico ruled for the state in May 2025. The association appealed.
On July 27, the court, in a 2–1 ruling, found the fee valid because the payers are the people who rent vehicles, not car rental businesses.
“Colorado imposes the fee on consumers,” U.S. Circuit Judge Scott Matheson wrote in a 17-page majority opinion.
“The AHTA prohibits a fee ‘upon any business located at a commercial service airport.’ It therefore does not apply to the Fee and does not preempt the Colorado law.”
In March, a judge ruled that the Transportation Department’s effort to end Manhattan’s congestion pricing program was illegal.
New York has had in place since January 2025 a system that charges most passenger vehicles a peak-period toll of $9 to enter Manhattan south of 60th Street, in a bid to cut congestion and raise funds to improve mass transit.
President Donald Trump has pushed to end the fee.
Transportation Secretary Sean Duffy in April 2025 said he would withhold funding for New York transportation projects if New York did not end the congestion pricing program.
On March 3, U.S. District Judge Lewis Liman issued a judgment that the Trump administration’s effort to terminate the program was unlawful.
