Overview
The Georgia Tax Tribunal granted summary judgment holding that Uber Safe Rider fees are considered part of the “sales price.” This decision confirms these fees are subject to Georgia sales tax because they form part of the total consideration for the transportation services sold.
Sales Price Definition Under Georgia Law
Georgia law requires sales tax to be collected based on the “sales price” as defined by statute. Even if a fee relates to a non-taxable service, if it is part of the total amount of consideration for taxable services, it falls within the broad definition of “sales price.”
The Tribunal rejected arguments claiming the Safe Rider Fees are non-taxable simply because they are used to recover costs for various non-taxable services.
Exclusions from Sales Price
The Tribunal referenced Ga. Code. Ann. § 48-8-2(34)(B), which provides specific exclusions from the definition of “sales price.” None of the following costs are explicitly excluded under this statute:
- Regulatory compliance
- Insurance
- Driver background checks
- Motor vehicle records checks
- Development of safety features in the Uber App
- Incident response
- Driver safety education
Conclusion
Accordingly, the Safe Rider Fee is deemed part of the taxable base under Georgia law. This ruling emphasizes Georgia’s broad interpretation of “sales price” and its application to all amounts considered as part of the transportation services sold.
Frequently Asked Questions
What are Uber Safe Rider Fees?
Uber Safe Rider Fees are additional charges applied to each ride to help fund safety-related features and services, including driver background checks, safety education, and incident response. Under Georgia law, these fees are treated as part of the total sales price of transportation services and are therefore subject to sales tax.
Why are Safe Rider Fees considered part of the “sales price” in Georgia?
Georgia defines “sales price” broadly, encompassing all amounts paid as consideration for a taxable service. Since Safe Rider Fees are tied to the overall cost of the transportation service, the Georgia Tax Tribunal ruled that they form part of the taxable amount, even if they support non-taxable safety functions.
Are there any exclusions to what counts as a “sales price” under Georgia law?
Yes, Georgia law (Ga. Code. Ann. § 48-8-2(34)(B)) lists specific exclusions from “sales price.” However, costs related to regulatory compliance, insurance, driver vetting, app safety features, and safety education, like those funded by the Safe Rider Fee, are not among them, making them taxable.
Can businesses argue that certain fees are non-taxable if used for safety or regulatory purposes?
Not successfully in Georgia. The Tribunal rejected such arguments, ruling that even if a fee supports non-taxable objectives, it is still taxable if it’s part of the consideration for a taxable service. This reinforces Georgia’s comprehensive approach to taxation.
What does this ruling mean for ride-share companies operating in Georgia?
Ride-share companies like Uber must include Safe Rider Fees in the taxable base when calculating sales tax. The decision highlights the importance of understanding how state tax laws define and apply the term “sales price” to bundled service charges.