New Taxi or Uber use tax goes into effect on July 1: where, how much and how it will be charged

Starting on July 1, 2025, for-hire ground transportation services in North Carolina, including rideshare apps such as Uber and Lyft, will be subject to a new tax rate.

Transportation companies, including traditional taxi services, will be required to pay the tax. Beginning this month, the state will levy the duty on “Exclusive-Ride Service” and “Shared-Ride Service” at rates of 1.5 percent and 1 percent, respectively.

The bill establishing the new tax was passed in September 2023, giving companies nearly two years to prepare for its implementation. Companies subject to the law were required to register with the North Carolina Department of Revenue before July 1, 2025.

Which types of rides will be taxed?

For the purposes of the new law, exclusive-ride service refers to “for-hire ground transport service requested by a passenger who requests exclusive use of the vehicle.” This applies any time an individual or group is matched with a driver through a transportation network and rides without being paired with other passengers.

In contrast, a shared-for-hire transportation service applies to offerings like The transportation service provider determines these matches, where customers are matched with a driver who may pick up additional passengers along the route. The transportation service provider determines these matches.

Who pays the tax?

While riders will ultimately pay the tax, transportation companies are responsible for remitting the funds to the state’s revenue authority. For example, a 1.5% tax on a $10 exclusive ride adds $0.15, while a $40 ride would incur a $0.60 tax.

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