Black Car Industry Tries To Modify NY Sales Tax

Posted on May 27, 2009 by LCT Staff - Also by this author - About the author

NEW YORK — The Black Car Assistance Corporation (BCAC) has filed a lawsuit against the State of New York requesting a temporary restraining order to stay the enforcement of the sales tax on black car and luxury limousine transportation services.

The 4% sales tax is scheduled to go into affect on June 1. The issue at hand is how the tax should be applied and what items will be included. Taxicab and motorcoach service were exempted from the sales tax, which applies to all livery vehicles in the state of New York.

The lopsided tax policy has created a furor among chauffeured transportation operators who were caught off guard by the measure and are now mobilizing to get an exemption. New York Governor David Patterson signed the legislation on April 7.

Although the New York tax goes into effect June 1, there are a number of issues which still require clarification. The tax is not yet spelled out well enough for operators to begin documenting and collecting it.

The limo tax is one of 52 new or increased taxes or fees that Gov. David Paterson and the Legislature approved in this year's budget to try to close the state's $20 billion deficit.

New York expects to collect an extra $6 billion in taxes and fees for the 2009-10 fiscal year because of the changes, the state Division of Budget predicted.

Victor Dizengoff, executive director of the BCAC, said, “The state tax law is very ambiguous and vague. We want clarification before the law goes into effect.”

The BCAC will have a court appearance Thursday in Albany to argue its position. “We went through a similar situation when the state of New Jersey imposed its sales tax on transportation services two years ago,” Dizengoff said.

Dizengoff has been an industry proponent for a number of years as the executive director of the BCAC. He will assume the position of president of the Taxicab, Limousine and Paratransit Association (TLPA) in October 2009.

More updates this week on LimoCentric and next week on Driving Force.

Source: Linda M. Moore, LCT Magazine

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