Bill Sponsors
Kallman, Lawson, Urso, Valverde, Zurier, Pearson, Mack, Ujifusa, and DiPalma
Committee
Senate Finance
Summary
Select
This legislation establishes a seventy-five cent ($0.75) surcharge on every fare charged by rideshare or transportation network companies (such as Uber or Lyft). The revenue collected from this surcharge is divided equally: fifty percent goes to a restricted account for street infrastructure improvements in the municipality where the ride originated, and fifty percent goes to fund the "Transit Forward RI" plan. Additionally, the bill mandates that all sales tax revenue collected from these companies be deposited into a restricted account specifically to benefit the Rhode Island Public Transit Authority (RIPTA).
Sponsor
Analysis
Pros for Progressives
- Provides dedicated, restricted funding streams for the Rhode Island Public Transit Authority (RIPTA) and the "Transit Forward RI" plan, promoting sustainable public transportation.
- Allocates resources specifically for street infrastructure improvements in municipalities, potentially improving safety and accessibility in local communities.
- Ensures that corporations profiting from transportation infrastructure contribute directly to its maintenance and the expansion of public transit alternatives.
Cons for Progressives
- Imposes a flat fee surcharge ($0.75) rather than a percentage-based fee, which is regressive and places a disproportionate financial burden on lower-income riders who rely on these services.
- May increase the cost of transportation for individuals in areas underserved by public transit who have no choice but to use rideshare services for essential travel.
- Requires legislative appropriation for the disbursement of funds, which could allow political gridlock to delay the distribution of money intended for transit and infrastructure.
Pros for Conservatives
- Utilizes a "user fee" model where those utilizing the roads via rideshare services contribute directly to the maintenance of the infrastructure they are using.
- Directs fifty percent of the surcharge revenue back to the specific municipality where the fare originated, supporting local control and local infrastructure needs.
- Places sales tax revenue into a restricted receipt account rather than the general fund, theoretically preventing the money from being spent on unrelated government programs.
Cons for Conservatives
- Increases the financial burden on consumers and businesses by imposing a new government mandate and surcharge on private transactions.
- Redirects general sales tax revenue to subsidize a specific public entity (RIPTA), potentially reducing funds available for other general state obligations or tax relief.
- Expands the size and scope of government by creating new restricted accounts and requiring the tax administrator to promulgate new regulations.
Constitutional Concerns
None Likely
Impact Overview
Groups Affected
- Rideshare passengers
- Rideshare drivers
- Transportation network companies (Uber, Lyft, etc.)
- Public transit riders (RIPTA users)
- Municipalities
Towns Affected
All
Cost to Taxpayers
Rideshare Passengers: $0.75/fare
Revenue Generated
$0.75/fare
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Regulatory
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Environmental Impact
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Bill Status
Current Status
Held
Comm Passed
Floor Passed
Law
History
• 01/16/2026 Introduced, referred to Senate Finance
Bill Text
SECTION 1. Title 31 of the General Laws entitled "MOTOR AND OTHER VEHICLES" is hereby amended by adding thereto the following chapter: CHAPTER 34.2 RIDESHARE OR TRANSPORTATION NETWORK COMPANY VEHICLE SURCHARGE
31-34.2-1. Rideshare or transportation network company vehicle surcharge.
(a) Each rideshare or transportation network company shall collect a surcharge which shall be added to the fare charged to each customer. For the purposes of this chapter, "rideshare or transportation network company" means a company that provides on-demand transportation services through app-based platforms to connect drivers with clients or passengers to facilitate and/or provide transportation for compensation or a fee.
(b) The surcharge shall be seventy-five cents ($0.75) per fare.
(c) The total amount of surcharge collections shall be remitted to the State of Rhode Island, and fifty percent (50%) of the surcharge collections shall be deposited in a restricted account to be used for street infrastructure improvements in the municipality where the fare originated, and fifty percent (50%) of the surcharge collections shall be deposited in a restricted account to be used as funding for implementation of Transit Forward RI as adopted by the state planning council.
(d) The tax administrator shall promulgate rules and regulations necessary to implement the provisions of this chapter.
(e) All disbursements and expenditures of funds from the restricted accounts subject to the provisions of this section shall be by appropriation of the general assembly.
SECTION 2. Chapter 44-18 of the General Laws entitled "Sales and Use Taxes — Liability and Computation" is hereby amended by adding thereto the following section:
44-18-18.2. Transportation network companies tax.
All sales tax revenue collected from transportation network companies, as defined in § 44- 18-7.3, shall be deposited in a restricted receipt account for the benefit of the Rhode Island public transit authority (RIPTA).
SECTION 3. This act shall take effect upon passage.
31-34.2-1. Rideshare or transportation network company vehicle surcharge.
(a) Each rideshare or transportation network company shall collect a surcharge which shall be added to the fare charged to each customer. For the purposes of this chapter, "rideshare or transportation network company" means a company that provides on-demand transportation services through app-based platforms to connect drivers with clients or passengers to facilitate and/or provide transportation for compensation or a fee.
(b) The surcharge shall be seventy-five cents ($0.75) per fare.
(c) The total amount of surcharge collections shall be remitted to the State of Rhode Island, and fifty percent (50%) of the surcharge collections shall be deposited in a restricted account to be used for street infrastructure improvements in the municipality where the fare originated, and fifty percent (50%) of the surcharge collections shall be deposited in a restricted account to be used as funding for implementation of Transit Forward RI as adopted by the state planning council.
(d) The tax administrator shall promulgate rules and regulations necessary to implement the provisions of this chapter.
(e) All disbursements and expenditures of funds from the restricted accounts subject to the provisions of this section shall be by appropriation of the general assembly.
SECTION 2. Chapter 44-18 of the General Laws entitled "Sales and Use Taxes — Liability and Computation" is hereby amended by adding thereto the following section:
44-18-18.2. Transportation network companies tax.
All sales tax revenue collected from transportation network companies, as defined in § 44- 18-7.3, shall be deposited in a restricted receipt account for the benefit of the Rhode Island public transit authority (RIPTA).
SECTION 3. This act shall take effect upon passage.