State: Uber, Lyft ride-sharing fares subject to excise taxes - Hawaii News Now - KGMB and KHNL

State: Uber, Lyft ride-sharing fares subject to excise taxes

(Image: Hawaii News Now/File) (Image: Hawaii News Now/File)
HONOLULU (HawaiiNewsNow) -

Ride-sharing companies like Uber and Lyft could soon be facing huge tax bills levied by the state Department of Taxation.

Until recently, the companies left it up to their drivers, who are independent contractors, to pay the general excise taxes on their own.

But the state tax department says that because the companies are selling "transportation services to the customer," the fares should be subject to the excise tax at the point of sale.

Traditional cab companies say that the ride-sharing businesses have avoided paying tens of millions of dollars each year in taxes.

"I would say they are intentionally flaunting the law," said David Jung, owner of EcoCab Hawaii. "That's what makes this situation much more shameful."

Lyft did not respond to our inquiries for comment. Uber says it complies with Hawaii's tax laws.

"We have met all GET obligations since we began operations in Honolulu, and we will continue to meet those obligations," said Taylor Patterson, a spokesman for the company.

Meanwhile, some Lyft and Uber drivers say that the companies should be liable for the taxes -- not them.

"I would like them to be able to collect the tax, the 4.75 percent tax, so that we could pass that directly on," said driver Kimo Sutton, who uses both companies' apps.

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