Rideshare behemoth Uber has suffered a bruising High Court loss that will cost it millions of dollars in unpaid taxes.
Australia's highest court on Wednesday dismissed Uber's claim it was not liable to pay payroll tax in NSW.
Uber has long argued it does not employ drivers and claimed money paid to its drivers is not wages under state law.
By a 6-1 majority, the High Court found Uber is liable for a tax bill of $81 million for the tax years from 2015 to 2020.
But the ruling is likely to leave Uber with a significant bill for subsequent years, pushing the total well over $100 million.
Uber was initially successful in appealing the NSW Chief Commissioner of State Revenue's assessment, but Wednesday's High Court ruling spells the end of the company's legal avenues.
Six of seven justices agreed to dismiss Uber's appeal, saying the drivers who work for the company are employees and the money paid to them is classified as wages.
"Uber has structured its rideshare system business so payments from riders are funnelled through it," the majority said in the judgement.
"That gives Uber substantive control over the fares before they are remitted to drivers, allowing Uber to deduct its service fee, or change or cancel the fare entirely."
Chief Justice Gageler noted payroll tax laws were adjusted late in the last century in multiple states to capture more revenue from contractual arrangements meant to disguise the true nature of the working relationship.
"The contractor provisions ... have continued 'always speaking in the present' to participants in the gig economy which emerged in this century," the chief justice wrote.
Legal expert Celeste Black wrote last year the decision by the High Court will likely influence the payroll tax obligations of companies with gig workers across Australia.
Payroll tax is a key part of NSW's tax base, despite only about one in 20 companies meeting the threshold to pay it, the NSW government says.
"It helps fund essential services that families and households rely on," Finance Minister Courtney Houssos said on Wednesday.
"Local businesses pay their fair share. Uber should pay their fair share too."
