BILL NUMBER: S3628

SPONSOR: RAMOS
 
TITLE OF BILL:  An act to amend chapter 1032 of the laws of 1960,
relating to enabling any city of one million or more to impose taxes on
certain motor vehicles, and to amend the administrative code of the city
of New York, in relation to enabling any city of one million or more to
impose taxes on certain motor vehicles

 
PURPOSE:

To make the annual commercial motor vehicle tax rate for medallion taxi-
cabs equal to the rate paid by other vehicles that transport passengers
in cities of one million or more.

 
SUMMARY OF PROVISIONS:

Section 1 amends chapter 1032 of 1960 to conform the commercial motor
vehicle tax rates for medallion taxicabs and other vehicles for the
transportation of passengers in cities of one million or more.

              

Section 2 amends section 11-802 of the New York City Administrative Code
to end the current commercial motor vehicle tax rate for mediation taxi
cabs.

Section 3 adds a new subparagraph D to section 11-802(a)(2) of the New
York City Administrative Code to make the commercial motor vehicle tax
rate for medallion taxicabs and other vehicles for the transportation of
passengers the same, as of June 1, 2018.

Section 4 provides the effective date.

 
JUSTIFICATION:

Medallion taxi cabs currently pay a much higher commercial motor vehicle
tax (CMVT) rate in New York City than other vehicles that are permitted
to transport passengers for hire. The current annual tax is $1,000 for
each taxicab and $400 for each other vehicle for hire.  This tax rate
was last adjusted in 1990. At the time, the legislature estimated that
the tax on taxicabs would equal about twenty cents for each ride,
although the tax is borne by the vehicle owner.  Since taxicabs now
transport about half as many passengers each day as they did in 1989,
the cost per ride associated with this tax has doubled. At the same
time, other livery vehicles now proliferate on the streets, add to traf-
fic congestion, and cause greater wear and tear on roads than they did
when the CMVT was last amended.

The City has budgeted $65 million per year in revenue from the CNVT for
each Cal year through 2023. Since the number of for hire vehicles has
more than Aofibled over the past five year, revenues from this tax now
exceed budgeted amounts. Revenues from Street Hail Liveries (SHL's) and
taxicabs have already declined as fewer of these vehicles are in
service. Based on the number of taxicabs and for-hire vehicles in
service on December 31, 2014, the tax assessed against the taxicab and
for-hire industries at that time was $36.7 million. Based on the number
of licensed vehicles as of December 31, 2017, $55.75 million would be
collected, an increase of 52% in three years. The remainder of the
revenue from the CMVT is assessed against trucks and other commercial
vehicles.
The fiscal impact of this proposal would be a loss of taxicab revenue of
about $7.5 million per year, based on approximately 12,500 taxicabs
currently in service. Revenue generated from the taxicab and for hire
industries would nonetheless exceed the revenue collected three years
ago by about 33% percent. Therefore, this legislation would have no
adverse impact on the proposed City of New York budget plan through
2023.

With the arrival of app-based hailing of for hire vehicles, the market
conditions for medallion taxicabs has been significantly altered. The
trip revenue for each medallion taxicab has dropped as the costs for
operating these taxis has risen since 1990. Far more passengers use
for-hire vehicles, including black cars, and there are far more of vehi-
cles on the streets of the city, causing wear and tear on the city
infrastructure.

In order to create equity among the various for-hire industries, and to
ensure that each vehicle using the streets pays a proportionate share of
road maintenance, this bill proposes to equalize the commercial vehicle
tax rates for all vehicles that transport passengers in New York City at
a rate not to exceed the current rate charged to non-taxicab for-hire
vehicles.

 
PRIOR LEGISLATIVE HISTORY:

2017-2018: A.10924 (Simotas)

 
FISCAL IMPLICATIONS:

None to the State.

 
EFFECTIVE DATE:
This act shall take effect immediately.