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Does Sales Tax Come Out of an Uber Driver's Pay in NYC?

No. NYS sales tax on Uber, Lyft and black car rides is the rider's cost, 8⅞% in NYC. What's taxed, the 4% charge outside NYC and the 2014–2017 case.

  • Reviewed
  • 2 min read
  • 6 official sources
On this page (6)
  1. What is taxed, and what isn't
  2. How it shows in TLC data
  3. The 2014–2017 deductions
  4. Related rules and exceptions
  5. FAQ
  6. Sources

No. New York sales tax on an Uber, Lyft or black car ride is a tax on the transportation service the rider buys, so the rider pays it on top of the fare. In New York City the combined rate is 8⅞% (NYS Publication 718, effective March 1, 2025). When Uber took sales tax out of drivers' pay from 2014 to 2017, the NY Attorney General said those taxes "should have been paid by passengers", and the 2023 settlements returned money to drivers.

What is taxed, and what isn't

New York's tax department explains the rules in TSB-M-09(7)S:

Sales tax on rides in New York State

RideSales tax?Notes
Black car, limousine or other livery service (includes app rides in NYC)YesTaxable 'livery service'. NYC rate 8⅞%.
Yellow taxi or green cab street hailNoTaxicabs are excluded from this tax. Taxis have a separate 50¢ MTA tax.
Trip that begins and ends in New York StateYesTaxable even if it passes outside the state on the way.
Trip to New Jersey or another stateNoOnly intrastate service is taxed.
App trip that starts in NYS outside NYC and ends in NYS4% TNC assessmentThe tax department charges a 4% assessment on the gross trip fare of these trips.

The taxable amount includes almost every charge on the ride, including tolls passed on to the customer. The Black Car Fund surcharge is not part of the taxable amount. The 4% assessment for app trips outside the city is described on the tax department's TNC assessment page.

How it shows in TLC data

TLC's trip records have a separate sales_tax field: "Total amount collected in trip for NYS sales tax" (TLC data dictionary). The driver_pay field is defined as pay "net of commission, surcharges, or taxes". In the records for September 2025 to August 2026, the average app trip carried $2.26 of sales tax, and the total was about $569 million over 12 months (our calculation). It is the biggest pass-through charge riders pay; the rest are on what riders pay vs what drivers get.

The 2014–2017 deductions

The Attorney General found that from 2014 to 2017 Uber deducted sales taxes and Black Car Fund fees from drivers' payments. Uber's terms told drivers they were "entitled to charge [the passenger] for any tolls, taxes or fees incurred", but the app gave no way to do it. Lyft deducted an 11.4% "administrative charge" from 2015 to 2017, equal to the sales tax and Black Car Fund fees. The November 2, 2023 settlements totalled $328 million for drivers (NY Attorney General).

The same answer applies to the Black Car Fund surcharge: see why my pay shows a Black Car Fund charge.

  • Taxes you may pay as a driver are different. Income tax and self-employment tax are on your own earnings. If you rent your car, the rental itself is taxed: TLC's 2024 expense study counted a 20.875% tax on short-term vehicle rentals in NYC (8.875% NYC sales tax plus a 12% state tax on short-term car rentals) (TLC expense report). That is part of your rental cost, not a deduction from fares.
  • Taxis. Yellow cab riders pay a 50¢ MTA tax instead; see who pays the MTA tax in a taxi?
  • Congestion charges are separate passenger charges too: see congestion pricing for TLC drivers.
  • Share of the fare. How much of the base fare drivers receive is on Uber and Lyft driver share of the fare.

This page explains how the tax works; it is not tax advice. More on the apps hub.

Frequently asked questions

Does the driver pay sales tax on an Uber ride in NYC?

No. New York sales tax on black car and limousine rides is charged on the transportation service the rider buys. The NY Attorney General found that deducting it from drivers' pay in 2014–2017 was wrong, and the 2023 settlements paid drivers back.

What is the sales tax rate on an Uber ride in NYC?

The combined New York City rate is 8⅞% (NYS Publication 718, effective March 1, 2025). In TLC trip records the average app trip carried $2.26 of sales tax (Sep 2025 – Aug 2026).

Do taxis charge sales tax?

No. NYS guidance says the tax on transportation services does not apply to taxicabs, buses or scheduled public transportation.

What about Uber trips that start outside NYC?

Trips by app companies that start in New York State outside New York City and end in the state are charged a 4% TNC assessment on the gross trip fare, according to the NYS Tax Department.

Sources

Last reviewed against the official sources on .

  1. NYS Tax TSB-M-09(7)S: Sales tax on certain transportation services (May 22, 2009) tax.ny.gov
  2. NYS Tax Publication 718: Sales and use tax rates (effective March 1, 2025) tax.ny.gov
  3. NYS Tax: Transportation Network Company assessment tax.ny.gov
  4. NY Attorney General: $328 million from Uber and Lyft for drivers (Nov 2, 2023) ag.ny.gov
  5. TLC Data Dictionary: High Volume FHV Trip Records (March 18, 2025) nyc.gov
  6. TLC: Revised HV-FHV Minimum Pay Standard Expense Model (Dec 2024) nyc.gov

Spotted something out of date? Tell us and we'll check it against the official source.

TLC Help is not a law firm and is not affiliated with the NYC Taxi & Limousine Commission or OATH. Explanations on this site are general information, not legal advice. Legal representation is provided by independent attorneys and OATH-registered representatives in our network.

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