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Car service tax a mistake? Lobby group hopes for a speedy fix

Livery base owner Hipolito Sims sat in the room above Seaman Car Service on June 10, Bluetooth device in one ear, quietly waiting for the meeting to star. A large man, with countless hours logged behind the wheel of a Lincoln Town Car, Sims made the trip from Evelyn Car Service in Brooklyn to find out what to do about a new tax his drivers are expected to collect from their drivers.

"I have a lot of questions," he said. "I'm trying to figure out what's going on with this new law."

On June 1, when the new state budget went into effect, a little-noticed provision expanded an 8.375 percent sales tax to include a ride in a livery car and instantly an entire industry began breaking the law.

"I have no idea about how to go about [collecting the tax]," Sims said. "All my drivers are asking me."

Pedro Heredia, the leader of a coalition of livery bases, had called the meeting to talk about the issue, but more specifically to rally support for a challenge to the tax.

"If you read the language you'll find we are included because of a technical error," Heredia said. That error, he claims, surrounds the definition of "car service."

"The way car services operate outside of New York City is different than how car services operate in New York City," he said.

Upstate, he said, the vehicles are owned by the base, and the drivers are paid a salary. For them, it is easy to add tax to a fare. Drivers for New York City's car services are independent operators who essentially rent a radio from the base and deal mostly in cash.

The day after the meeting, Heredia and nearly 400 people from the livery cab industry protested on the steps of the State House in Albany.

Heredia said representatives from the group met with State Senator Martin Malavé Dilan, chair of the Senate's Transportation Committee, Senator Ruben Diaz, a member of the committee, and Assembly Member Adriano Espaillat, who represents Northern Manhattan.

"They all committed themselves to submit a cleanup bill to exempt us," Heredia said. "We did get a lot of support from a lot of elected officials."

But politics might get in the way of any kind of cleanup bill being passed before the legislative session ends on June 22.

On June 8, two Democrats, Pedro Espada Jr. and Hiram Monserrate, voted with the Republican minority to break the delicate Democratic majority and elect a new leadership for the Senate. The move threw the Senate into a legal and political tumult, from which it has yet to surface, and sidelined any actions on legislation.

If the Senate does vote on any bills before the session ends, Heredia faces some stiff competition (gay marriage and mayoral control of schools in New York City to name two) for attention.

"I am confident," Heredia said. "We have mustered a lot of support."

Heredia returned to Albany on June 17 to meet with Governor David Paterson's staff and will ask for some kind of executive action if the Senate doesn't act before the end of the legislative session.

"We need to at least request a pardon, an extension on an exemption," Heredia said. "This industry cannot be in limbo for three months."

If he doesn't get a satisfactory answer, he will call again on his fellow livery drivers – and to the permit he has secured in Albany to parade up to 3,000 people in the city.

"This is the last thing Governor Paterson wants to see – the streets flooded with people and cars," he said

 

In briefs section of Edition 379 2 July 2009