Uber Georgia Sales Tax Dispute Returns to Appeals Court

The dispute between Uber and the Georgia Department of Revenue regarding the unpaid sales tax entered into the new chapter, as the Georgia Supreme Court sent Uber’s challenge regarding sales tax obligations for the pre-South Dakota v. Wayfair period back to the state’s appellate court for further review. As a result, earlier findings are not final and must be reconsidered at a lower judicial level before a definitive conclusion can be reached.

The Overview of the Uber v. Georgia DOR Dispute

In 2014, Uber began charging riders a “Safe Rides Fee” for trips booked through its app. The fee was applied as a flat, separately listed charge on customer receipts intended to fund a range of safety-related initiatives, including regulatory compliance, driver background and record checks, enhanced app safety features, driver training, and incident response systems. Notably, the fees were not shared with drivers and were kept separate from both driver earnings and Uber’s own service fees.

The DOR conducted a tax audit covering July 2012 through June 2015 and concluded that Uber had failed to collect sales tax on rider fares in the state. After this audit, Uber renamed the fee to “Booking Fee”. Nonetheless, the DOR issued a proposed assessment, which Uber challenged in court. 

In 2022, the Tribunal Court denied Uber’s motion for summary judgment and ruled in favor of the DOR on the question of liability. However, the Tribunal Court did not determine the exact amount Uber owed, and the case was sent back to the DOR to calculate the tax due. This resulted in the Court's second ruling, where it found that the fee forms part of the overall sales price of its transportation services and therefore must be included in the taxable base under state law, amounting to nearly USD 9 million in unpaid sales tax. 

In 2024, the Fulton County Superior Court upheld the Tribunal Court's ruling and affirmed that DOR is authorized to tax Uber. In its ruling, the Court also noted the practical difficulties of attempting to collect sales tax from thousands of individual drivers, whose records may be inconsistent and whose activity changes frequently, describing such an approach as administratively unworkable. In contrast, Uber was found in a far better position to collect and remit the tax on behalf of the system.

The Georgia Court of Appeals affirmed that ruling in March 2025, resulting in Uber's appeal before the Georgia Supreme Court claiming that the lower Court’s ruling improperly gives the DOR  unprecedented and virtually unlimited authority. With the latest decision, the Georgia Supreme Court directed the Court of Appeals to evaluate Uber’s challenge to the imposition of sales tax obligations for pre‑Wayfair periods.

Conclusion

The ongoing legal battle reflects the broader challenge of applying legacy sales tax rules to marketplace-based business models that were not clearly addressed under earlier statutory regimes. The decision in this case might have an effect far beyond Uber, so all companies operating in the industry should monitor for further developments.

Source: Bloomberg, Georgia Tax Tribunal, Sales Tax Institute, VATabout