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Bill to allow Baltimore to collect millions in taxes on Uber, Lyft moves forward after yearlong delay

A bill that would allow Baltimore to collect millions in taxes on Uber and Lyft rides — which went a year without a hearing due to the political upheaval following the resignation of ex-Mayor Catherine E. Pugh — was approved by the City Council’s Taxation, Finance and Economic Development committee Thursday.

The rideshare tax bill will be heard by the full council on Monday and is expected to pass. Mayor Bernard C. “Jack” Young plans to sign it "as soon as it crosses his desk,” according to spokesman Lester Davis.

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After Pugh’s resignation in May, which elevated Young to mayor and Councilman Brandon Scott to council president, the committee postponed the hearing on the bill in October to allow Scott to be briefed on the details. The committee voted Thursday morning to approve the 25-cent tax, but not double it, which had been recommended by the city finance department to cover plunging parking revenues blamed partly on increased ridesharing.

Baltimore has collected no taxes on an estimated 9 million Uber and Lyft rides per year despite a 2015 state law enabling it to do so, costing the city roughly $2.1 million in revenue annually, assuming a 25-cent tax, according to the city Department of Finance.

A 2016 amendment to the state law required the city to update its law to begin taxing the companies. Pugh, who received $2,000 in political contributions from Lyft in 2016, did not introduce the bill until January 2019.

Uber and Lyft pay a 25-cent tax on each ride originating in Annapolis, Brunswick, Frederick, Montgomery County, Prince George’s County and Ocean City due to local laws in those municipalities. State law exempts Baltimore from a 25-cent cap in the other jurisdictions.

Councilmen Eric Costello and Ed Reisinger, both Democrats, said they preferred to tax Uber and Lyft at 25 cents per ride — in line with the other jurisdictions — despite the city exemption from the cap.

“Considering every single tax across the board is the highest in the state," Costello said, “I just have a lot of concern taking what was originally proposed as 25 cents and upping it to 50 cents.”

Revenues from the city’s parking tax, meters and city-owned garages have plunged a collective $4.1 million, or about 6%, in the past two years, according to the finance department, which called the growth of rideshare “one of the factors explaining the recent sharp decline.”

Reisinger said if the city needs more money, it needs to look within its agencies.

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“If the other subdivisions are only charging 25 cents, I think we should follow suit,” he said.

Uber, which charged Baltimore riders 25 cents extra for nearly a year in anticipation of having to pay a similar tax, instead began crediting them with Uber Cash in recent weeks for a “city-specific fee” that was “ultimately not collected by the city.”

The city’s law department plans to look into whether it can recoup the fee Uber collected from Baltimore riders without paying a tax to the city, according to Davis, the mayor’s spokesman.

“The city’s entitled to the fee," Davis said this week. “The lawyers are going to figure out the next steps.”

Costello said he was surprised when his Uber account was credited with $9.75 in Uber Cash for the uncollected tax Wednesday night.

He questioned why Uber collected the extra fee from Baltimoreans, “presumably knowing” it would not be required to pay a tax until the city passed the bill amending its law.

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Uber did not immediately respond to a request for comment.

Costello asked the city agencies to find a way to get the money from Uber and keep the committee informed. Chairwoman Sharon Green Middleton said she thinks the finance and law departments need to meet with the companies to discuss the issue.

“I had no idea, as a consumer, that I was being charged that 25 cents per trip," Costello said. "So if I didn’t know that, as a consumer, I think it’s reasonable that the city didn’t know ... and [Uber was] just collecting that in a vacuum.”

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