The New York State Department of Taxation and Finance has issued guidance explaining the new statewide tax on ridesharing companies. Advisory Opinion, TSB-M-17(1)M, 1S (N.Y.S. Dep't of Taxation & Fin., June 23, 2017).
Ridesharing services, also known as transportation network companies ("TNCs"), such as Uber and Lyft, were for the first time authorized to operate anywhere in New York State under legislation (the "TNC Act") enacted this spring and effective as of June 29, 2017. (Chapters 59 (Part AAA) and 34, Laws 2017). Previously, they were only authorized to pick up passengers in New York City, under the City's Taxi & Limousine Commission supervision, and those rides were subject to an 8.875% combined State and City sales tax.
Article 29-B was added to the Tax Law, establishing a state tax assessment of 4% of the gross trip fare of every TNC trip that originates in New York State outside New York City and terminates anywhere in the State.
In conjunction with the new authorizing legislation, Article 29-B was added to the Tax Law, establishing a state tax assessment of 4% of the gross trip fare of every TNC trip that originates in New York State outside New York City and terminates anywhere in the State. The law also contains a presumption that every trip originating in the State outside the City is subject to the assessment, unless the contrary is established by the person responsible for the tax. Tax Law 1293.
The TNC Act gives certain local governments and counties the ability to opt out, although so far no localities are identified as having opted out on the website of the Department of Motor Vehicles.
TNCs will be required to file quarterly returns, and the Commissioner is authorized to require returns to be filed at shorter intervals if necessary. The first return will cover the period June 29, 2017 through September 30, 2017, and is due on October 30, 2017. Every TNC will be required to establish an online account and file returns using the Department's web filing application. Recordkeeping requirements have also been enacted, requiring TNCs to keep records of all trips, including records showing amounts paid, when trips occurred, and where they originated and terminated. Charges for rideshare services that are subject to the TNC assessment are excluded from New York State and local sales taxes.