Local reaction to a new rideshare tax set to start in July

WILMINGTON, NC (WWAY) —  A new tax will be going into effect in July for users of rideshares and taxi services.

The Transportation Commerce tax takes effect July 1st.

It will place a 1.5% tax on exclusive ride services and a 1% tax on shared-ride services.

The North Carolina legislature passed the law in 2023.

Andrew Furuseth is the director of Sales and Use tax division for the North Carolina Department of Revenue.

He explains how the tax will be applied to rides.

“On the receipt you get, at the end of the ride, this would just be a line item at the very bottom in most cases that has the tax rate and the tax like we would see when we go to a retail store and buy an item,” Furuseth said.

Pyramid Cabs owner Mohamed Elhenawy said while the tax is a small amount, some customers may resist paying it.

“The question about that is the customers,” Elhenway said. “Is the customers going to accept that or not? This is the big question. Some people, it is okay to pay 200 dollars and pay 5 dollars taxes on top of it or 3 dollars taxes on it. And sometimes, people are so cheap, they don’t want to pay that extra money. It’s just exactly like if someone wants to tip and someone doesn’t want to tip.”

Uber Director of Public Affairs Javier Correoso said his company worked with lawmakers to come up with a compromise on the tax.

The revenue will go to the state’s highway fund to pay for infrastructure improvements.

“We do know that Uber drivers and riders are using North Carolina roads and it’s important for those roads to be maintained in great condition,” Correoso said.

Furuseth said individual drivers for Uber and Lyft do not need to register with the Department of Revenue and won’t need to file additional tax returns due to this tax.