North Carolina Introduces New Tax on Ride App Users

GREENSBORO, N.C. — A new tax will take effect in North Carolina that specifically targets users of ride apps like Uber and Lyft, as well as taxi passengers. The Transportation Commerce Tax, set to begin on July 1, 2025, adds an additional 1.5% charge to ride fares.

According to Andrew Furuseth, the Director of the Sales Tax Division at the North Carolina Department of Revenue, customers will see this new charge at the end of their rides. ‘As a customer, if you take a ride with a taxi or transportation network company, what you will see at the end of your ride on your receipt is a brand-new tax,’ Furuseth stated.

The 1.5% tax applies to exclusive ride services, where customers choose their companions, whether friends or family. A lower rate of 1% will be applicable for shared ride services, where passengers share a ride with strangers.

Furuseth added, ‘Most rides, the riders should really expect a 1.5% rate.’ The tax was included in the 2023 state budget and will be collected starting two years later.

The funds generated from this tax are earmarked for the state highway fund, which will be used to improve roads and bridges across North Carolina. Ride and taxi drivers will not need to register individually with the state; instead, the main companies operating these services will handle the registration.