TNC Tax

Transportation Network Company Tax

The City of Seattle imposes a tax on Transportation Network Company (TNC) trips originating from within Seattle. The tax is levied on TNC companies, not individual drivers, engaging in the business of arranging transportation for compensation by using online platforms to connect passengers with drivers. Revenue from this tax will support affordable housing near transit, the Center City Connector streetcar and the establishment of an independent driver resolution center.

Tax rate

The Washington State Legislature passed a bill during the 2022 session which, in part, prevents cities from imposing any tax on Transportation Network Companies (TNCs) or their drivers. The new law provides that any local ordinance or regulation that existed before Jan. 1, 2022, and imposes a tax, fee, or other charge on a TNC or driver, remains in effect but shall be reduced by 15 cents per trip.

As of Jan. 1, 2023, the tax on TNCs shall be 42 cents per trip that originates in Seattle. The tax is levied on TNC companies, not individual drivers.

Guidelines

  • All TNCs must file a tax return and report the number of trips originating in Seattle whether or not tax is actually owed. This tax return should be used in 2021 and going forward.
  • No tax is due if a TNC has less than 200,000 trips originating in Seattle during the prior calendar quarter. Originally, the threshold was 1 million trips originating in Seattle during the prior calendar quarter.  However, this threshold was changed to the lower number of 200,000 trips originating in Seattle during the prior calendar quarter.
  • The TNC tax shall be due and payable quarterly.
  • Additional fees and/or requirements are separate from the TNC tax.
  • Individual drivers and TNC companies must have a Business License Tax Certificate if they do business in Seattle.

Deductions

Any trip originating in Seattle and terminating outside the state of Washington may be deducted when calculating the overall TNC tax due. 

Get more information

Read related regulations at https://www.seattle.gov/business-regulations/taxis-for-hires-and-tncs/transportation-network-companies/tnc-companies .

Frequently asked questions about the City of Seattle's TNC tax

Final Rule Adopted

The Director of the Department of Finance and Administrative Services, acting under the authority of Seattle Municipal Code Chapters 3.02 and 5.55, adopted an amended rule for the implementation of the Transportation Network Company Tax Ordinance (Seattle Municipal Code Chapter 5.39). The rule became effective Feb. 1, 2021: Seattle Rule 5-970 Transportation Network Company Tax  

The Department of Finance and Administrative Services' License and Tax Administration Division held a virtual public hearing on Jan. 28, 2021 to receive comment on Seattle Rule 5-970 Transportation Network Company Tax  

The public may review a copy of the rule here.

Read the full text of the tax ordinance.