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In February, an Ohio woman who pleaded guilty to using her Uber ride service to help a fugitive escape from prison won $1.3 million in damages.
And now, a federal appeals court has ruled Uber should pay $500 million in federal taxes for allegedly dodging state and local taxes on its ride-hailing services.
The Tax Court has sided with a man who lost his home to a fire that destroyed the home’s second floor, and a woman who sued Uber over its “illegal” ride-sharing program.
In a 5-2 decision last month, the court upheld Uber’s ability to pay up to $2,500 in state and federal taxes on drivers’ income and capital gains.
“The Court is convinced that the plaintiffs’ claim is sufficiently plausible that Uber can be held liable,” wrote Judge Robert W. Wilkins in the decision.
Uber was among a group of companies that argued in the U.S. Tax Court that it was “not liable for its failure to comply with the laws of its state or local jurisdictions.”
Wilkins said that Uber could avoid paying $500M by claiming the company’s drivers’ earnings were taxed at a lower rate than drivers’ incomes.
The tax issue has sparked a debate among lawmakers, the media and tax experts.
The issue has also divided consumers, and Uber has faced scrutiny from state and national lawmakers in recent months.
Uber’s Tax Court case was the first of its kind in the country.
In February 2016, a California woman lost her home to fire and then was charged with arson.
Her attorney, Michael G. Cohen, successfully argued that the home had been destroyed by fire and not by Uber.
A federal appeals judge rejected Cohen’s argument and instead said Uber should have to pay the full amount in taxes.
In that case, the woman’s attorney, Steven P. Toczek, sued Uber, saying the company did not owe him a refund of the $2.2 million in taxes due on the home.