Regulations

TAX AND WAIT: NY Operators Paying Up

LCT Staff
Posted on June 17, 2009

NEW YORK — New York operators having been reluctantly collecting added sales taxes on service since the measure went into effect on June 1 without any injunctions or modifications.

The Black Car Assistance Corporation (BCAC), along with the Luxury Base Operators Association (LBOA), the Nassau/Suffolk Limousine Association, the Limousine Association of New York, the Federation of of Taxi Drivers, and the New Coalition of Livery Owners had meetings with operators on June 4 to discuss the tax issue and formulate a plan to attempt to modify the tax or eliminate it altogether.

The BCAC and the New York associations tried unsuccessfully to get a restraining order against the state of New York to halt the collection of the sales tax until officials clarified what exactly would be taxed. Although denying the injunction, the judge did rule in favor of the group by allowing them to proceed with a lawsuit against the state of New York.

At the June 4 meeting, most attendees agreed to pursue amending the law to allow for a per ride fee rather than a straight sales tax. The taxi and bus industries have been exempted from the sales tax, but the taxi industry will begin paying a per trip fee of 50 cents later this year. The group also would like to move to a per trip fee rather than the tax.

The industry has begun collecting the tax, but there are still some issues that the state will need to clarify. Operators who lease vehicles from base stations are expected to collect the tax but are often not involved in the financial transaction. Victor Dizengoff, executive director of the BCAC, said, “The state will will be lenient in the beginning of the process if we make mistakes. They expect that there will be some errors at the beginning of any process such as this.”

The BCAC attorney, Wayne Baden, explained that the state needs to collect $26 million over the next six months with this new tax. He believes that a proposed per trip fare also would accomplish hitting the state’s revenue mark while not burdening operators as severely as collecting the tax.

One major concern of operators is the fact that the tax must be collected regardless of when a client pays the invoice. Often clients do not pay for 30 to 60 days. Regardless of whether they have been paid, operators will need to front the tax payment.

“This tax represents an additional hardship to an industry which is already suffering,” explained Sergio Sanchez, President of LBOA. New York state’s recent election has shifted some of the power in the state house.

Operators are treading water to see which side of the fence the new power will be on. Industry members hope the newly elected politicians will be receptive to their goals.

Source: Linda Moore, LCT Magazine

LCT Staff LCT Staff
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