Ohio wants Uber to pay $1.6M in sales taxes: What it means


Uber is appealing an order from the Ohio Department of Taxation to pay $1.6 million in sales taxes and penalties.

The ride hailing company is arguing the tax law the state is citing doesn’t apply to the company. A hearing before the Board of Tax Appeals has been set for July.

The case only centers around whether Uber Technologies owes taxes for the third quarter of 2015, but could have larger implications than the $1.6 million it allegedly owes for those three months.

The Ohio Department of Taxation said through a spokesman that it couldn’t comment beyond the final determination it issued to Uber. Uber said in a statement that “While we can’t comment on the specifics of ongoing litigation, we are working closely with the Ohio Department of Taxation on this matter.”

Policy Matters Ohio, a left leaning think tank, said based on the audit for one quarter, Uber would owe $13.5 million in taxes since July 2015 if it had to collect since then, and that figure also does not cover earlier operations or take into account the company’s growth.

RELATED: Uber reduces ambulance usage nationwide says study

The dispute reflects the growing effort to figure out how to tax and regulate the “gig economy,” as companies like AirBnb and Uber are grabbing business from other more heavily taxed industries like taxis and hotels. Regulators are asserting that the states are being cheated on revenue by these startups, which look a lot like businesses the state is already collecting millions in taxes on.

In Uber’s case in Ohio, the company is arguing that it is not a transportation service provider but rather a “transportation network company.” Uber said in its notice of appeal, filed Nov. 6, that its employees don’t provide transportation services, because it is the contracted drivers, not the actual Uber employees, who are doing the transporting.

Uber also argues that collecting a sales tax on the services provided by the drivers violates the Internet Tax Freedom Act.

RELATED: Uber, taxis try to combat drunk driving for New Year’s Eve

The state in a Sept. 9, 2016 letter, told Uber that the meets the definition of a vendor of transportation services, which would have to pay the taxes in question. Uber set the prices, controlled the quality and drivers and received payment for services.

“Not only was the petitioner present at the taxable sale, the petitioner is the catalyst for the transaction,” the state wrote.



Reader Comments ...


Next Up in Ohio

Teen admits to killing Memphis couple, setting apartment on fire
Teen admits to killing Memphis couple, setting apartment on fire

An arrest has been made after a Memphis couple was found dead in an apartment that went up in flames Thursday afternoon. >> Read more trending news  Aareon Berryman, 18, has been charged with two counts of first-degree murder, especially aggravated robbery, aggravated arson, possession of marijuana with the intent to manufacture or sell...
Britney Spear’s ex K-Fed wants child support increase amid star’s Vegas success
Britney Spear’s ex K-Fed wants child support increase amid star’s Vegas success

After seeing how successful her four-year Las Vegas residency has been, Britney Spears’ ex-husband Kevin Federline is asking for an increase in child support. >> Read more trending news  Federline’s attorney reportedly sent the pop singer a letter recently indicating that he would like to renegotiate the $20,000...
New tests, including blood check, could help doctors diagnose autism
New tests, including blood check, could help doctors diagnose autism

A newly developed blood and urine test could potentially detect autism in young children. >> Read more trending news  That’s according to new research from scientists in the United Kingdom and Italy who conducted tests in search for damage to proteins previously known to be higher in children with autism spectrum disorders. The study...
Check for recall announcements for golf carts, pots, candles & more
Check for recall announcements for golf carts, pots, candles & more

A kettle, fire pit, bleeding candles and golf carts are among the new recalls announced by the Consumer Product Safety Commission: The handles on some Whirlpool KitchenAid electric kettles could come loose and cause the liquid inside to burn you.  There are three reports of minor burns and a total of 79 reports of the handles separating. ...
Weekend to bring more rain, threat for strong storms
Weekend to bring more rain, threat for strong storms

While much of the area is getting a break from steady rain Friday night, another wave will arrive toward daybreak. Storm Center 7 meteorologists have been tracking multiple rounds of rain since Wednesday with several more to go. Chief Meteorologist Eric Elwell said the heaviest rain will arrive late Saturday. “We’ll likely see steady...
More Stories