# SALES TAX- A NEW HEADACHE FROM UBER



## LUXYRIDE (Jul 5, 2014)

I am from Rhode Island. It appears that Uber does not want the headache of collecting sales tax and filing. Uber wants drivers to figure out the sales tax and file it at tax time.

Does anyone understand how to do this? Since we don't bill the client, Uber must be collecting sales tax, no? If so, can't they just send us a 1099-something with the amount that they collected and we can then claim it?

If we have to take sales tax out of our already-dwindling net, I'm out. Last straw, for sure!


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## Disgusted Driver (Jan 9, 2015)

That's pretty funny. Assuming that they collect it and pass it on to you, you'll have to remit it once a month or so (depends on amount collected I think) so it's a royal pain in the ass. The state is not going to let you hold onto sales tax revenue for a year.


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## zombieguy (May 22, 2015)

You are an independent contractor that in essence is contracted by Uber to perform a service. Their client pays them, they pay you. They provide you with a 1099 with the money they paid you for the year. There is no sales tax for you. You pay income tax on the money they paid you. The don't take out taxes because you are not an employee, you are a contractor and you are liable to pay your own income tax.


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## LUXYRIDE (Jul 5, 2014)

zombieguy said:


> You are an independent contractor that in essence is contracted by Uber to perform a service. Their client pays them, they pay you. They provide you with a 1099 with the money they paid you for the year. There is no sales tax for you. You pay income tax on the money they paid you. The don't take out taxes because you are not an employee, you are a contractor and you are liable to pay your own income tax.


Hi, Zombie:

I wish I could find the email -- RI is having Uber-hosted H&R Block Tax Sessions (don't think for a minute that someone from Uber was actually there). It was a lynch mob full of angry Uber drivers *****ing about everything NOT related to taxes; hence, the meeting was useless. In RI, at least, Uber is expecting us to file the 7% sales tax for every ride given.


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## Drive777 (Jan 23, 2015)

Rhose Island must be unique, I never heard of sales tax applying to cab fare but here it is:

http://www.taxrates.com/blog/2015/04/22/taxi-rhode-island-sales-tax-on-cab-rides/

In general it should be responsibility of the one processing payment to collect sales tax. You can't just collect the tax yourself because (similar to PayPal) it must be itemized at the time of sale and added to the pre-tax total of the transaction. Because Uber does not support this, one questions if they should even be allowed to process taxable transactions. I doubt PayPal would exist if it didn't give the option of computing tax at the point of sale -- they would be in defacto violation of every state's sales tax laws.

The whole argument is silly because of the way Uber set itself up as a "processor" by sending out 1099-K's.

Zombieguy is correct, we should be classified as 1099-MISC independent contractors based on the nature of the job. We do not handle credit cards, and technically aren't supposed to handle cash according to Uber's own guidelines about the cashless experience.

If Uber expects you to file R.I. sales tax, they need to collect it and pass it through to you.


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## Lidman (Nov 13, 2014)

Everyone move to Delaware then.


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