Starting June 1st, 2009 New York State has imposed a sales tax of 8.375% on all limousines, vans and sedans which can carry more than 14 people.
New York limo companies where given no more than 3 weeks notice of the change, and it will have a big impact on the limo business in New York State and City. We are still reeling, trying to find all the details of the tax and how to properly charge and account for it. Believe it or not, a tax such as this is not something that a business can easily adjust to. Sales reps now have to be aware of what rides are taxable, back office staff needs to account for and report the tax collected. It is a big imposition to small companies; most small limo companies don't even want to deal with the hassles of credit cards let alone collecting taxes.
Already customers are balking at an added 8 cents on the dollar. Since the tax is only on vehicles of 14 passengers or less, we may see a rise in SUV limos which can hold over 14 and still provide a luxurious ride. The tax is also hitting vans and sedans, which will have an impact on the corporate market. A ride to a NYC airport in a sedan or limo will now cost 8% more. The tax is only imposed on rides that start and end in NY, so a ride to Newark from NYC wont be taxable. It's actually a very confusing tax law.
Party and Limo buses as well as charter buses are exempt from the tax, so we are expecting to see a rise in the party bus market in NYC.
Labels: nyc limousine, nyc limousine service, nyc limousines