ATLANTA (AP) — A bill that would impose a flat tax of 50 cents on trips in Georgia taxis, ride-hailing services and limousines is on its way to Gov. Brian Kemp's desk for his signature or veto.
The Senate voted 41-3 to approve a conference report on Thursday that says services such as Uber and Lyft won't be subject to regular sales tax, which can be 7% or higher.
State officials have argued that the services were already taxable, saying taxis and limousines pay the levy. But the companies had said they’re not subject to sales taxes and Uber has been disputing a $22 million tax bill.
Even if the services escape their current tax dispute, the General Assembly earlier this year passed a law requiring third-party online marketplaces to collect sales taxes on behalf of sellers beginning April 1, roping in Uber and Lyft.
The services argued the regular sales tax, as high as 8.9% in Atlanta, is too much to charge on a trip. Efforts to entirely exempt the companies from taxes failed.
A revenue estimate suggested the move would bring in $24 million to $45 million in the first full year, higher than the estimate of state sales tax revenue from ride hailing. But local governments would lose sales tax revenue on ride hailing, a projected loss of $15 million to $25 million a year.
The bill would dedicate the money to transit projects statewide. The fee would rise with inflation.
The measure was added to a previously unrelated bill that would exempt farmers from having to pay state income tax on relief payments received after 2018′s Hurricane Michael.