PASSENGERS face a price hike in the coming days as a new law comes into effect impacting certain modes of transport.
The new transportation fee being introduced on July 1 will force users of taxis and ride services to pay extra on top of their fares.
The new tax will begin on July 1 in one state (stock)[/caption]
Two different tax rates will be issued to passengers depending on the transportation service they use (stock)[/caption]
This will be the case even if they do not reach their destination.
Under the new law coming in on July 1, passengers will be charged an up to 1.5 per cent in tax on their journey.
The new charge will only impact those using taxi and ride services like Uber in North Carolina.
The amount will come from the gross receipts, according to the North Carolina Department of Revenue.
And the tax rate depends on the type of transport service provided.
Exclusive-ride services paid for by a group or individual from a transportation company that matches them with a driver (like Uber) will have a tax rate of 1.5 per cent.
Meanwhile those using Shared-ride services will have a 1 per cent tax rate.
Such services are classified as a “for-hire ground transport service for which an individual has been matched with another individual by a for-hire ground transport service provider.”
The Department of Revenue warns that the tax will be due as soon as a passenger boards a vehicle regardless of whether the service is completed or not.
A spokesperson for the department told WFMY News: “The 1.5% is for an exclusive ride service.
“Exclusive just means the person paying exclusively decides who is in the vehicle – so it may be friends or family.
“The 1% rate only applies to something on a shared ride service, and that is when the taxi company or the transportation company connects you with other riders that you don’t know.”
The Transportation Commerce Tax was part of a 2023 state budget bill, and two years later it is being brought into effect.
The money generated from this tax will go to the state highway fund to be used for infrastructures like roads and bridges.
What gross receipts will be subject to the transportation commerce tax?
- Trip fare.
- Booking fees.
- Surcharges.
- Fuel charges.
- Fees for using a credit card.
- Cleaning fees.
- Wait time fees.
- Fees for toll expenses of the service provider.
- Charges associated with rides to and from the airport.
- Any other fees or charges for the service.
Gross receipts that will be subject to the tax include booking fees, surcharges, fuel charges, cleaning and wait time fees, and fees for toll expenses of the service provider.
To take part in the tax, for-hire ground transport services must complete an application which can be found on the NCDR’s website.
You can also find additional information on the website, along with a webinar where service providers can learn more about the tax.
There are a slew of other new laws taking effect on July 1 that drivers and passengers should be aware of.
A ‘screen’ law arriving in a new state for the first time will punish drivers with $100 fines and even jail in certain circumstances if a common error is made.
Meanwhile, a new ‘paper’ law is arriving that will ban a common feature entirely in one state.
