A proposed sales tax on transportation network companies in Ohio would have a deleterious — and potentially dangerous — effect, Lyft told members of the Ohio House Committee in a letter.
Under the proposal, any so-called transportation network company (TNC), such as Lyft and Uber, would have to collect sales tax and remit to the state.
The proposal does exclude from the taxable price any fee charged for the service except the base fare or fees based on distance or time. State officials say the proposal will bring in between $16.2 million and $24.3 million in the 2020 fiscal year and between $17.7 million and $26.6 million in the 2021 fiscal year.
“A sales tax — plus the recently increased gas tax set to go into effect this summer — could have severe and disproportionate impact on those who can least afford it, not to mention the impact on Lyft drivers themselves,” the company said in its letter. “Of additional concern, the sales tax being considered by the Ohio House of Representatives will force passengers to pay one of the highest sales taxes on ridesharing in the nation.”
Gov. Mike DeWine signed a bill increasing Ohio’s gas fuel tax by 10.5 cents per gallon. DeWine originally asked for a 28-cent-per-gallon increased, but lawmakers agreed to a lower increase following much debate.
The ride-sharing company wants lawmakers to remove the proposed sales tax language from House Bill 166, the state budget bill. Members of the House Finance Committee are currently debating the measure and could vote on it as soon as this week.
It would then head to the full House for consideration.
“Making rides more expensive could encourage passengers to drive themselves,” Lyft said. “If Lyft is too expensive, passengers may choose their personal vehicles over ridesharing. Lyft serves as an alternative option to helping people get home responsibly from bars, restaurants and other entertainment venues where alcohol is consumed.”
According to Lyft, 30 percent of its riders in Ohio do not own or lease a personal vehicle. The company also said 63 percent of non-car owners say Lyft has impacted their decision not to own or lease a personal vehicle.
