The Passenger Service Levy
- What is the Passenger Service Levy?
- Who pays?
- How do I register as a taxpayer for the levy?
- How is the levy calculated?
- What is a passenger service transaction?
- Can I pass the levy on to customers?
- What are the GST and iincome tax implications of the levy?
- Special circumstances and exemptions
- Lodging a return
- What if I don't lodge a return?
- How do I know what to pay?
- How do I count booked passenger service transactions for levy purposes?
- When do I count a passenger service transaction for an advance booking?
- What happens if I take a booking referral from another booking service provider?
- What happens if I don't pay in full?
- What if I disagree with an assessment?
- Where does the levy apply across NSW?
- Are customers being told about the levy?
What is the Passenger Service Levy?
From 1 February 2018, authorised taxi service providers and booking service providers will be liable to pay a temporary levy of $1 per trip. Payment of the levy is a condition of authorisation.
The levy will be in place for up to five years to help fund the NSW Government’s industry adjustment assistance package of up to $250 million, designed to help taxi and hire car licence holders adjust to the industry changes.
Read a copy of a presentation recently delivered at a series of levy registration workshops hosted by the Commission.
The levy is payable by taxi service providers and booking service providers, including taxis, hire cars, rideshare and others providing passenger services for a fare in vehicles with 12 seats or less (including the driver).
This means there is a level playing field across industry when it comes to accounting for the levy in business planning.
Taxi and booking service providers will need to register as a taxpayer within 7 days of becoming liable to pay the levy. Registration opens on 1 February 2018 and can only be done through the Industry Portal. You will need to provide:
- A direct debit authorisation which will permit Revenue NSW to make deductions from your nominated bank account
- An estimate of the number of passenger service transactions that you expect to carry out during the next 12 months
- Details of a person who can be contacted about the levy
Even if you do not register as a taxpayer, if you are providing taxi or booking services you are still obliged to pay the levy. In these circumstances, the Commissioner will issue you with an estimated assessment of your levy liability.
NOTE: If you have not already provided us with 100 points of certified identification, you will need to upload it in the Industry Portal before you can register for the levy.
How is the levy calculated?
For taxi service providers, it means $1 for every ‘passenger service transaction’ provided as a result of the taxi being hailed in the street or taken from a taxi rank. For booking service providers (including for booked taxis), it means $1 for every booking which results in the provision of a ‘passenger service transaction’.
What is a passenger service transaction?
A passenger service transaction is when a passenger service is provided from:
- A taxi hailed from the street, or
- A taxi caught from a rank, or
- A booking for a taxi or hire vehicle made over the phone, using the internet, via an app or by any other means, and
- When the journey commences in New South Wales
It is up to each service provider to decide whether to absorb the levy, or to pass it on to customers. If you choose to pass the levy on to customers (for example, as an addition to their fare), it will attract GST.
Transport for NSW has published a new taxi fares order under the Point to Point Transport (Taxis and Hire Vehicles Act) 2016 to enable taxi service providers to pass on the cost of the levy to passengers.
What are the GST and income tax implications of the levy?
The Australian Taxation Office has information about income tax and the GST in relation to the levy available on the ATO website
Special circumstances and exemptions
There are a number of reasonable exemptions in place to help ease the burden on industry wherever possible. The levy is not payable if:
- A passenger service transaction is not provided (for example, the customer cancels the booking)
- The service provider carries out 150 or fewer passenger service transactions per year
- The journey commences outside of New South Wales, or starts or finishes in a remote or very remote part of NSW (see map below)
Other exemptions include services provided:
- Under a community transport contract with Transport for NSW
- For the transport of patients facilitated by a hospital or by or on behalf of Health Share NSW
- In a bus (vehicles with more than 12 seats, including the driver)
- For the transport of patients by the Ambulance Service of NSW or another ambulance service authorised under the Health Services Act 1997
- Under the Assisted School Travel Program of the NSW Department of Education
- For the transport of persons in custody by or on behalf of Corrective Services NSW, and
- Services not otherwise captured by the point to point transport legislation, such as a courtesy service or a car pooling arrangement.
If you carry out 600 or more passenger service transactions in any period of 12 months, then on or before the last day of each month you will need to tell us how many passenger service transactions you carried out during the preceding month. Log into the Industry Portal and complete the Passenger Service Transactions Return.
Download the Passenger Service Levy User Guide for the Industry Portal.
What if I don’t lodge a return?
If you fail to provide details of the number of transactions carried out for an assessment period, the Point to Point Transport Commissioner will make an estimated assessment of your liability.
How do I know what to pay?
1-150 passenger service transactions per year
151-400 passenger service transactions per year
$150 total, payable annually
401-600 passenger service transactions per year
$400 total, payable annually
600+ passenger service transactions per year
$1 per passenger service transaction, calculated and paid monthly
Payment collection will be managed by Revenue NSW. Service providers will need to nominate a bank account and ensure enough funds are available to allow for the payment to be debited on the 26th of each month (or the next business day if the 26th falls on a weekend or public holiday).
How do I count booked passenger service transactions for levy purposes?
Booking service providers must pay a $1 levy for each passenger service transaction provided in an assessment period. For most booking service providers an assessment period is one month, unless you carry out fewer than 600 passenger service transactions, which means an assessment period is one year.
In determining how many passenger service transactions have been completed in an assessment period, it would be reasonable to expect to have to pay a $1 levy for each booked trip undertaken. The law makes it clear that if a booking is cancelled, then the levy is not payable.
The following examples illustrate how you may calculate the number of passenger service transactions you have done. These examples do not cover all possible scenarios and you may need to seek independent advice.
- If a single booking is taken to transport more than 1 passenger from a single pick up point, then a $1 levy is payable for that trip, even if the passengers are transported to different destinations, such as friends booking a shared taxi to their respective homes on a night out.
- A single event, such as a phone call or email, may include multiple bookings, and therefore multiple passenger service transactions and the levy would need to be paid for each separate transaction. For example:
- A hotel makes bookings in the same phone call for two separate groups to be transported from the hotel to the White Bay cruise terminal. In this case, the booking service provider has to pay $2, even though transport is being provided from a common pick up point to a common destination at the same time.
- A limousine company takes bookings from a regular client who emails through a list of advance bookings for 20 separate trips over several months. In this case, the limousine company has to pay $20.
- Similarly, if a client is booking a return trip to and from the airport, then $2 is payable ($1 for each leg), regardless of whether the return trip is on the same or different days.
- If a booking is for a round trip, including if there are a number of stops along the way, and the vehicle is not available for hire to provide passenger services to anyone else during that time, then a $1 levy is payable for the whole trip. An example might be someone booking a taxi or hire vehicle to run errands and then return home.
- Similarly, if a booking is made on a time basis, for example for an hour, half a day or for a whole day, such that the vehicle is not available for hire to anyone else, then a $1 levy is payable for that booking. An example of this would be a company booking a limousine for use by business executives for their exclusive use to travel from the airport to various meetings throughout the day.
- However, if a booking on a time basis spans multiple days (whether or not consecutive), then the pick up on each day of the booking constitutes a separate passenger service transaction, and $1 needs to be paid for each day. This is because it would be possible to cancel individual days.
In all of the examples above, if more than one vehicle is dispatched to fulfil the passenger service, then the $1 levy is payable for each vehicle noting that those vehicles are not available for any other hire during that period of time.
When do I count a passenger service transaction for an advance booking?
The passenger service transaction should be included in your return for the month in which the trip occurs. For example, if you take a booking on 23 April for a passenger service that takes place on 4 May, you should include this passenger service transaction in your return for the month of May (which you would be making in June).
What happens if I take a booking referral from another booking service provider?
If a booking service is referred, the booking service provider who ultimately provides the passenger service, or communicates the booking to the driver, is liable to pay the levy.
Each booking service provider will need to maintain passenger service transaction records that accurately reflect the referral.
Revenue NSW will be in contact to collect any overdue amount if you do not pay in full.
Payment of the levy is a condition of authorisation, and failure to comply may result in the Commissioner taking steps to vary, suspend or cancel your authorisation.
If this happens, you will be prohibited from providing taxi or booking services until your authorisation is reinstated. Fines of up to $110,000 may apply for a person who provides services without an authorisation. A body corporate convicted of providing a taxi or booking service without an authorisation for a second time may be liable for fines of up to $10,000,000. You will still be required to pay the outstanding debt, even if your authorisation has been cancelled.
What if I disagree with an assessment?
If you have an objection to your levy assessment, you can have the decision reviewed by lodging an objection with the Point to Point Transport Commissioner and providing evidence to support your objection. Objections can only be lodged in certain circumstances, such as if:
- A mistake was made in your return which resulted in a higher assessed liability
- If you receive an estimated assessment and you can demonstrate that the actual number of passenger service transactions is lower than the estimated assessment
- A third party such as a driver, affiliated provider or other person collected the levy amount on your behalf, but has not paid the levy amount (or as otherwise agreed), and you have taken all reasonable steps to recover that amount such as providing written instructions and reminders relating to the collection and remitting of levy amounts, or have the amount paid
- You gave a third party such as a driver, affiliated provider or other person reasonable directions about collecting the levy. The levy amount was not collected by the person as you directed, and you took all reasonable steps to recover the amount such as providing written instructions and reminders relating to the collection and remitting of levy amounts, or have the amount paid.
You may not make an objection on the grounds of a third party failing to pass on the levy amount to you more than once in relation to the same person.
You must provide written evidence to support your objection. Further information on lodging an objection will be contained in your notice of assessment.
You must continue to pay any outstanding levy amounts and any new assessments while your objection is being considered.
If you remain dissatisfied with the outcome of your objection, you can appeal to the NSW Civil and Administrative Tribunal or the Supreme Court of NSW for further review.
Unless the Commissioner is satisfied that there are special circumstances, you must lodge your objection within 30 days of the initial assessment if a mistake was made in your return or within 60 days if the issue is with third party collection.
Some examples of special circumstances include:
- A serious illness or other personal emergency affecting the taxpayer or a person or persons responsible for returns for the taxpayer.
- A failure of computing or other systems, including loss of data, affecting the taxpayer’s ability to make the objection.
- An unforeseen occurrence or circumstance outside the control of the taxpayer.
Are customers being told about the levy?
To help passengers understand the levy, its purpose and its likely effect on fares, Transport for NSW rolled out a customer awareness campaign from mid-January until the end of February. Information about the levy is also available on the Transport NSW Info website.