Shuman Roy is an entrepreneur, business owner, and musician. He started RoysNoys, LLC in 2013 as a music production and education service company. He also offers small business consulting and advisory services to help businesses get from start-up mode to turn-key operations. Shuman earned his M.B.A from the Stern School of Business in 2001 and has an undergraduate degree from Manhattan College in ...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Joel...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Jul 19, 2021

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If you live or work in or around New York City you may have heard about the proposal to levy a crash tax for FDNY service in the event of an auto accident.

Basically, the tax is a service charge the “at-fault” driver would be assessed for the Fire Department having to respond to the call.

Some estimates of the potential charges range from $365 to $490 per response.

Many Cry Foul

There are a slew of critics and organizations who disagree with this tax. It is widely believed that FDNY services are already paid for through sales and income taxes paid to the city and state.

The additional tax is being described as a hidden or double tax due to this line of thinking. Why should we have to pay twice for the same service?

Politicians disagree with the tax partly because it may be a slippery slope for charging additional fees for all sorts of public services already in place. These services may include 911 phone calls and garbage pickup for example.

Additionally, the current state of the economy may be forcing politicians to publicly disagree with a new tax on the already debt burdened in NYC.

Policy holders don’t like the tax because they will likely have to foot the bill themselves. Even if a particular insurance company were to pay this fee as part of the claims process, insurance premiums would be increased to reflect the additional costs.

The policy holder would be responsible for the additional cost in the long run.

Insurance companies across the country also disagree with this type of tax initiative.

As discussed above, it increases their payouts on insurance claims and forces them to raise rates, which never sits well with customers.

What’s Next?

Senator Eric Adams (D-Brooklyn) intends to introduce a piece of legislation this month to block the tax.

Additionally, city council is attempting to gain authority over decisions regarding whether or not to allow the tax.

If approved, they will likely block the enactment.