Uber, Lyft Would Pay Sales Tax Under N.Y. Bill

Daily Tax Report: State provides authoritative coverage of state and local tax developments across the 50 U.S. states and the District of Columbia, tracking legislative and regulatory updates,...

By Gerald B. Silverman

Uber Technologies Inc., Lyft Inc. and other ride-hailing companies would pay state and local sales tax on rides in the upstate region of New York under a bill ( A. 6661) introduced in the state Assembly.

The tax provisions of the bill differ from a measure (S. 4159) that passed the Senate in February and a measure included in a larger transportation budget bill ( S. 2008, A. 3008) proposed by Gov. Andrew M. Cuomo (D).

The Senate bill would impose a 2 percent tax, while the governor’s bill would impose a 5.5 percent tax. The state sales tax is currently 4 percent, while local sales taxes vary.

The three measures could be reconciled in budget conference committees, which will be held in the next two weeks.

Statewide Debate

The tax provisions are part of a larger debate about allowing ride-hailing companies to operate throughout the state. They are currently permitted only in the New York City area under the authority of the New York City Taxi & Limousine Commission.

While all three proposals would allow the companies to operate in areas such as Buffalo, Rochester, Albany and Syracuse, the Assembly bill allows localities to regulate ride-hailing in the same manner that they regulate taxis and liveries.

The Senate and Cuomo bills would instead establish a statewide regulatory framework.

“It is heartening to see the Assembly join the Senate and the Governor in finally prioritizing, making ride-sharing a reality for all New Yorkers,” Alix Anfang, a spokeswoman for Uber, told Bloomberg BNA in an email.

Nationwide Issue

Taxation of ride-share companies is an emerging area that few states have addressed through legislation thus far. Massachusetts enacted a comprehensive tax and regulation law for ride-share providers in August, imposing a tax of 20 cents per ride plus other fees. Boston taxi owners are challenging the law in court, as they want to see ride-share companies held to the same requirements as the taxi industry.

South Carolina enacted a law in 2015 that requires the companies to pay 1 percent of gross revenue to the state. Meanwhile, Florida’s Legislature is set to consider a bill this spring that would regulate but not tax the industry and that would specifically bar city and county governments from taxing it. Georgia’s House has passed a measure to subject ride-hailing app providers to sales taxation.

To contact the reporter on this story: Gerald B. Silverman in Albany, N.Y. at GSilverman@bna.com

To contact the editor responsible for this story: Ryan C. Tuck at rtuck@bna.com

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