The ride sharing industry has taken the world by storm since 2009 when UBER started the concept of “ride sharing services” to compete with the taxi industry. Lyft joined the industry in 2012, creating a little good old capitalist choice for consumers. There have been many winners and losers with the advent of this new industry. Consumers and idle car owners have benefited, obviously. All the potential victims of drunk drivers go on about their daily lives oblivious to the miracle ride sharing has done for them because drunk people have been more willing to take a cheaper ride share service than drive. Attorneys focused on defending DUI’s have seen a dramatic decrease in work, which I think we can all live with. Another big loser has been state and local governments, who make tax revenue off taxi services, but not ride share services. Many state and local governments have been adding fees or taxes on ride share services and it looks like Florida may be jumping on the bandwagon with two bills floating in the Legislature aiming to add a surcharge tax/fee to “peer to peer car sharing.”
Florida Senate Bill 478 and House Bill 377 generally referred to as “Motor Vehicle Rentals” are very similar. The bills provide as follows:
- Amends section 212.0606 F.S. to impose a $2 per day surcharge on peer to peer car sharing and a $1 per use surcharge for use less than 24 hours. The fee is imposed for any car shared for a fee in Florida regardless of where the car is registered. Requires returns be filed and taxes remitted to the Department with totals of surcharges by county.
- Amends section 627.7483 F.S. to impose a requirement on the ride share program to make sure both the driver and owner of the car are insured up to certain minimum limits. The bill would also impose certain liabilities onto the car sharing program except for vehicle owners makes intentional or fraudulent material representation to the program.
- Provides a statutory framework that the car sharing program has an insurable interest in the vehicles (allowing insurance to be taken out by the programs).
- Allows insurance policies for the vehicle owner to exclude certain coverage related to liability related to providing ride sharing services (pushing a majority of the insurance coverage and liability on the ride sharing program).
If the bills become law, there should be no doubt that the fees will be passed on to the consumers of ride sharing services. So you can imagine somewhat of an uproar from the general public about these fees that are used by a staggering amount of the population, including the author of this article. However, keep in mind that tourists use a LOT of ride sharing services when vacationing in Florida. So our state will raise millions of dollars of taxes paid by tourists! Most of the funds from these taxes will go into the State Transportation Trust Fund, used for roads. About 15% of the proceeds will go into the Tourism Promotional Trust Fund.
These bills are several impactful tax bills floating in the Florida legislature at the moment. You can find the text of the ridesharing bills and links to other articles on current tax bills at the end of this article.
About the author: James Sutton is a Florida licensed CPA and attorney as well as a partner in Moffa, Sutton, & Donnini, PA. Mr. Sutton is charge of the Tampa office of the firm and practices almost exclusively in the area of Florida Sales & Use Tax Controversy. Mr. Sutton handles audits, protest, litigation, criminal cases, revocations, collections, and consulting engagements all in the area of sales tax. Mr. Sutton is an active member in the FICPA, AICPA, AAA-CPA, and FIADA. Mr. Sutton is also the State and Local Tax Chairman for the AAA-CPA and president of the Florida AA-CPA. If you are interested in learning more about Florida sales tax from Mr. Sutton, you can find his speaking engagements around the state HERE. Otherwise, you can learn more about Mr. Sutton in his firm bio HERE.
At the Law Office of Moffa, Sutton, & Donnini, PA, our primary practice area is state and local taxes, with a very heavy emphasis in Florida sales and use tax. We have defended Florida businesses against the Florida Department of Revenue since 1991 and have over 100 years of cumulative sales tax experience within our firm. Our partners are both CPAs/Accountants and Attorneys, so we understand both the accounting side of the situation as well as the legal side. We represent taxpayers and business owners from the entire state of Florida and around the country. Call our offices today for a FREE INITIAL CONSULTATION to confidentially discuss how we can help put this nightmare behind you.
If you are interested in learning more about Florida sales and use tax, then you can find a partial listing of our up and coming speaking engagements HERE.
Florida Senate Bill 478 – Peer to Peer Car Sharing
Florida House Bill 377 – Peer to Peer Car Sharing
ADDITIONAL ARTICLES TO READ
FL SALES TAX BILL: WIN FOR FOOD/GROCERY DELIVERY SERVICES, published January 16, 2020, by James Sutton, CPA, Esq.
ANALYSIS OF FLORIDA ECONOMIC NEXUS BILLS, published December 20, 2019, by David Brennan, Esq.
FLORIDA SALES TAX INFORMAL WRITTEN PROTEST, published November 17, 2018, by James Sutton, C.P.A., Esq.
FLORIDA SALES TAX - VOLUNTARY DISCLOSURE PROGRAM, published April 9, 2018, by Jeanette Moffa, Esq.
FLORIDA USE TAX AUDIT LETTER?, published June 14, 2015, by James Sutton, CPA, Esq. and Jerry Donnini, Esq.
FLORIDA TAX INCENTIVES FOR BUSINESS, published November 10, 2013, by Jerry Donnini, Esq.
GO TO JAIL FOR NOT PAYING FLORIDA SALES TAX?, published November 3, 2013, by James Sutton, CPA, Esq.
FL SALES & USE TAX MACHINERY & EQUIPMENT EXEMPTION SIGNED INTO LAW - FINALLY!, published May 21, 2013, by James Sutton, CPA, Esq.