The Georgia Senate Thursday jump-started a measure aimed at exempting ride-share companies like Uber and Lyft from the state’s sales tax by charging them a flat fee for ride-hailing services that would be dedicated to public transit.
The move came after lawmakers pushed through legislation in January to start collecting online sales taxes from third-party companies like Google and Amazon that officials say could reel in around $100 million annually for the state, plus tens of millions of dollars more for local governments.
But part of that deal involved passing a separate arrangement for ride-hailing companies to exempt them from those online sales taxes. Those companies instead favor paying a fee of 50 cents per ride.
That 50-cent fee arrangement was tacked onto a bill to ease income-tax requirements for Georgia farmers hard-hit by Hurricane Michael in 2018, which cleared the Georgia House in March but sat in limbo as the General Assembly went on hiatus amid the coronavirus pandemic.
On Thursday, Senate lawmakers picked up the ride-share fee measure, House Bill 105, and sent it by a 41-3 vote back to the House for final approval.
Senate Majority Whip Steve Gooch, who led the push for the ride-share fee, said Thursday the bill’s passage would be a “reduction to the bottom line” for state sales taxes but would help boost funding for transit operations in Atlanta and elsewhere in Georgia.
“We believe this is a good way to budget for our transit in Atlanta,” said Gooch, R-Dahlonega.
The fee measure would have landed on Gov. Brian Kemp’s desk in mid-March had House lawmakers not elected to make changes clarifying that revenues from the fee would be earmarked for public transit.
That change forced the bill to return to the Senate for more voting, which was put off for three months after the 2020 legislative session was suspended due to the pandemic. Lawmakers returned this week to close out the last days of bill-wrangling.
Ride-share companies have been paying sales taxes since April 1 when the measure taxing online sellers took effect. That has helped put Georgia on track to collect as much as $15 million per month in additional tax collections amid severe economic strain caused by the pandemic.
If signed into law, the fee could drum up between $24 million and $45 million for the state in its first full year in effect, according to a fiscal note. County and city governments, which would not benefit from the fee, would lose out on between $16 million and $26 million the first year.