Beginning Jan. 1, 2019, S.B. 7509C’s congestion surcharge will be imposed on for-hire trips in New York City. As a result, New York residents and tourists may soon notice higher fares when requesting transportation services in certain areas.
The congestion surcharge will apply to trips that begin and end in the state, and to those that begin, end, or pass through the “congestion zone”—south of (and excluding) 96th Street in Manhattan.
The surcharge rates will vary according to the type of transportation vehicle used:
The surcharge amount must be passed on to passengers, who will see the charge separately stated on trip receipts. Those responsible for paying the surcharge will be vehicle dispatchers, including transportation network companies, and other businesses and individuals receiving trip requests from customers and providing trips via their own vehicles.
For purposes of the surcharge, for-hire transportation vehicles include: taxis, green cabs, limousines, black cars, livery vehicles (i.e. community cars), rideshare/transportation company vehicles, and pool vehicles. Exemptions include transportation provided for funerals, ambulance rides, public transportation via buses and the Metropolitan Transportation Authority (MTA).
Monthly returns and surcharge payments must be submitted within 20 days of the applicable month’s end, via the tax department’s Congestion Surcharge Web File application. Those required to register must file returns even if no surcharges are incurred during a calendar month. Failure to timely pay the surcharge will result in a 200 percent penalty of the outstanding payment, along with any other applicable penalties and interest.
Those subject to the surcharge for more than one trip per calendar month must also register with the New York State Tax Department. There is a $1.50 registration fee for both first-time registrants and those renewing a certificate of registration.
A business online services account is required in order to file returns, pay the surcharge, and to register and pay the applicable registration fee.
The surcharge is estimated to generate $400 million a year for the MTA, but not everyone is rejoicing at this revenue prospect. New York City’s Taxi and Limousine Commissioner believes the surcharge implementation will be “‘devastating’” since the surcharge may give an unfair advantage to other for-hire transportation vehicles that are not controlled by metered fares and which can lessen trip prices so passengers will not feel the surcharge, as AM New York reports.
With the effective date only a little more than a month away, we may soon learn what positive and negative effects the new congestion surcharge has in the Empire State.
Continue the discussion on Bloomberg Tax’s State Tax Group on LinkedIn: Are congestion surcharges an effective way to raise revenue and cut down on traffic congestion in your state?
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