A 2010 audit by the Revenue Department found that PhillyCarShare did not charge its members a $2 car-rental tax on some types of transactions over several years, PhillyCarShare executive director Gerald Furgione said last week.
The organization, the third largest of its kind in the nation, also was under financial stresses because of the weak economy and the complexities of managing a 250-car fleet, he said. The tax issue had ramifications with its relationship with its bank.
"What the board saw going forward was competition and financial issues. We wanted to do things we couldn't," said Jacob Smith, chairman of the PhillyCarShare board. Easing some concern over the transaction was the belief, Smith said, that PhillyCarShare and Enterprise had a "shared vision" of the future of the service.
Furgione said Enterprise would "take care of our obligations and assume all our assets. Enterprise definitely saved us. The only thing we regret is that we will no longer be a nonprofit."
Revenue Department spokeswoman Elizabeth Brassell said Friday that she could not comment on PhillyCarShare because of taxpayer confidentiality. She noted several publicly filed liens against the organization.
Enterprise is expected to retain the PhillyCarShare name and its 25 employees and to operate the business independently of its more than 100 car-rental outlets in the Philadelphia area. The privately held St. Louis company operates the Alamo and National car-rental brands, as well.
PhillyCarShare's fleet has shrunk from a peak of about 400 cars in 2009. Among its 13,000 members are 4,000 companies or institutions. A PhillyCarShare residential member pays $15 a month to belong to the organization.
