Limo Companies Lose Tax Rise

Limousine Companies Lose Tax Rise

The limousine industry in New Jersey is facing a 7% sales tax increase this month and there is nothing they can do about it. The sales tax increase for the transport and limousine industry is said to be funding a much needed infusion into the New Jersey budget but it is only causing grief for small limousine hire companies who are reluctant to pass the increase onto their customers but would be ruined if they tried to absorb the cost into their business.

The limo industry in New Jersey has been fighting this increase since it was announced, however, without success. The Limousine Association of New Jersey and the Black Cat Assistance Corporation have taken the issue to court, however, the Superior Court ruled against the limo hire companies' request to block the increase in the sales tax.

While the court will conduct another session in the future to revisit the issue and decide whether the tax will remain, the increase in sales tax on all transport services in New Jersey began on the 1st of October.

The Judge who handed down the ruling, Neil Shuster, agreed that the new tax law seemed vague and there may be grounds for a reversal in the future. This vagueness of the law means that while the tax applies, it is up to the limo hire companies to decide which trips the tax applies to.

For example, since the tax is only in New Jersey, the limo hire companies put the question to the deputy attorney general in court about how the tax would affect a limo trip starting on New Jersey but ending in California. The deputy attorney general could not answer this issue.

So, while the state is introducing this new tax increase, they have not fully researched its implementation. While this leaves it up to the limo hire company's discretion as to whether to apply the tax, it does make for a complicated billing system for the already busy limo hire companies.