Cab owners divided on how to collect new tax
Cab drivers will be required to collect state sales tax from their customers when they pick up fares this year, but the cab owners do not agree on how to collect the tax. The Commission on Motor Vehicles for Hire sent a schedule of taxi rates to the Town Council, where the development was discussed.
Although the commission was requesting council approval to add one dollar onto the fare rates to cover the sales tax (which is new), when the commission’s chair, Vin McAloon, presented the idea, he no longer supported the idea of the flat rate add-on to be collected from customers. He also didn’t think it was an issue the town council needed to vote on.
“The tax is between us and the state of Rhode Island,” McAloon said. “I don’t think it should be voted on by the council.”
He explained that the rationale behind folding the tax into a flat rate was to make it easier for the drivers, who, McAloon said, would have to carry a lot of change if they calculated the tax for each fare.
Commissioner Jim Rondinone had concerns that if there was no flat charge, there could be discrepancies in charges to consumers. “There will be arguments,” he said. “Hotels will be calling cabs [with cheaper rates].” He called a flat added-on rate convenient and uniform. Without it, he warned there would be a “fiasco” with hundreds of different fares.
Cab drivers at the council meeting were divided. Judy Clark agreed with Rondinone. “Put the dollar on,” she said. Fred Leeder agreed with McAloon, saying, “The town does not have a right to tell me how to do my taxes.” Rich Gann felt it is the town’s responsibility to get everyone doing the same thing. “Some owners already said they are not collecting tax. We run our business out of our pockets,” he said. “We do not have credit machines.” Gann also wondered why McAloon had “flip-flopped.”
First Warden Kim Gaffett recommended not changing the rates to include the dollar add on. She did, however, recommend changing the rates within the same color zone as the commission had requested. Those will drop from $9 to $6. In asking for the change, McAloon called the old fare “exorbitant.” Also new, a $5 charge for freight. McAloon said often the drivers lose money when they are called for a pick up and have to wait for costumers’ pallets to be unloaded from the ferry.
The Council approved the taxi fare schedule but not the dollar add-on for taxes with four in favor, and one, Councilor Ken Lacoste, against.