Effective July 1, 2025, North Carolina has enacted a new Transportation Commerce Tax aimed at regulating and generating revenue from for-hire ground transportation services, including traditional taxi operators and transportation network companies such as Uber and Lyft.
Key Provisions of the Tax:
- Scope: Applies to passenger transportation services where the ride begins in North Carolina.
- Taxpayers: Taxi companies and transportation network companies must register with the North Carolina Department of Revenue (NCDOR) and are responsible for collecting the tax from customers.
- Tax Rates:
- 1.5% on exclusive-ride services (where the passenger does not share the ride with others).
- 1% on shared-ride services (e.g., carpool-style rides where multiple customers are picked up).
- Taxable Amount: The tax applies to gross receipts from the ride, including:
- Base fare
- Booking fees
- Surcharges
- Airport ride fees
- Other mandatory service charges
- Exemptions: Voluntary tips are excluded if they meet specific requirements.
- Administrative Requirements:
- Tax must be clearly and separately stated on receipts or invoices.
- Tax is collected and administered in the same way as the state’s sales and use tax.
This tax is part of North Carolina’s broader effort to modernize its tax framework in line with evolving transportation models and ensure equitable contributions from digital ride-hailing platforms.