City council to consider 6-month delay on taxi tax

Some council members wary of financial implications of delay

  • Taxis lined up outside of Penn Station. A group of taxi, limo, and sedan-for-hire services say they will refuse to pay a new city tax on taxi trips in the city, which went into effect on Oct. 1. The first taxes are due on Nov. 26.
Taxis lined up outside of Penn Station. A group of taxi, limo,… (Photo by Amy Davis / Baltimore…)
November 17, 2013|By Kevin Rector, The Baltimore Sun

The City Council is considering delaying a controversial new tax on taxi, limousine and other livery services in Baltimore that business owners said they refuse to pay.

Councilwoman Mary Pat Clarke said she will introduce a bill today that would delay by 180 days the implementation of the 25-cents per passenger excise tax on cabs, limousines and for-hire sedans, which went into effect Oct. 1 but is not due to start being collected until Nov. 25.

Clarke said industry representatives told her earlier this week they did not intend to pay the tax because they were given too little notice of it and have no means of passing it on to customers or enforcing proper accounting among their drivers.

Clarke is not trying to rescind the tax, she said, but rather to give the companies more time to prepare for it, and her fellow council members a chance to revisit its structure. The tax requires companies to record every passenger from every trip in the city, input that information into city-designed forms and remit 25 cents per passenger in a lump tax payment each month.

The specificity of the reporting has been a point of contention for company representatives.

The fate of Clarke's bill is unclear, with some council members expressing support and others skepticism.

The City Council passed the tax bill unanimously last summer as part of Mayor Stephanie Rawlings-Blake's 10-year financial plan. The finance department estimated it would generate $1.3 million in new annual revenue for the city, which Rawlings-Blake's administration said would offset cuts to city property taxes and pay for school improvements and blight removal.

City finance director Harry Black did not respond to a request for comment. The mayor's office has said lower-than-expected taxi tax revenues would be dealt with through adjustments elsewhere in the city's $2.4 billion operating budget for fiscal 2014.

Taxi company representatives praised Clarke for bringing the issue back before the council.

Dwight Kines, a spokesman for Veolia Transportation, which operates about 550 cabs in the city — or about half the city's fleet — said he has asked the Maryland Public Service Commission, which regulates taxi rates, for a sticker to put in all cabs noting a rate increase of 25 cents per passenger, but has not received a response.

Taxi companies can't raise rates without the permission of the PSC, and have been in protracted rate negotiations for years. Kines said he is hopeful Clarke's legislation passes so the PSC has more time to approve the stickers while continuing to work on the larger negotiations.

"From the beginning, we just wanted to make sure that this was a fee that we could collect from the passengers, have the authority to collect from the passengers, and be able to report accurately," said Kines, who is one of the industry leaders saying he'll refuse to pay under the current structure. "If the city wants us to collect this tax, this will give us time to find a way that's more accurate."

Mark Thistel, president of FreedomCar and another member of the industry refusing to pay, declined to comment other than to say he is "grateful" the City Council is revisiting the issue.

On Friday, a spokesman for Rawlings-Blake said in a statement that the mayor had not seen Clarke's legislation but is "willing to consider all proposals that would make it easier for the city to collect the revenue and for companies to be in compliance with the law."

The administration still intends to collect the revenue but is "certainly open to any ideas the council or stakeholders may have that can improve the law and help companies be compliant with the tax," Kevin Harris, the spokesman, said.

Harris previously said the city would pursue legal action against companies that do not pay.

Lester Davis, a spokesman for City Council President Bernard C. "Jack" Young, said Young is "definitely interested" in Clarke's bill but does not support a delay on the tax.

"He certainly believes that, if there are issues, there are ways that the council and the city can correct those to move forward," Davis said. "He certainly isn't looking at a long delay or a repeal or anything like that."

Councilman Edward Reisinger, chair of the transportation committee, said he is undecided.

"We voted on the budget with that $1.3 million," he said. "It's a fiscal question. If the finance department says that it's not going to hurt anything in the next three or four months and we can work this out through the PSC in how they document and record everything, then I don't have a problem."

Council members Bill Henry and Sharon Middleton both signed on as co-sponsors of the bill.

Middleton said companies should be given more time to upgrade their systems to comply with the tax.

"It's all about working together and keeping people employed," she said. "We are behind on some of the progress with transportation with this city, so we definitely want to keep our taxi cab system in place."

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