The Owner-Operator Independent Drivers Association has wrapped up a class action lawsuit against New York’s Department of Taxation and Finance, with the state Supreme Court’s ordering New York to pay $44.4 million for an unconstitutional registration and decal fee. The settlement was reached last September, following the court’s ruling in February 2016 that the fee was unenforceable.
“We fought against a number of similar taxes back in the 1980s and 1990s and the states lost in every one of those cases,” said OOIDA President Jim Johnston. “We were shocked that New York even thought they could get away with this. The amount for the New York HUT decal is $19, which may seem insignificant, but if other states were to do the same thing, it would be huge—collectively and in administrative costs.”
The class action lawsuit challenged the constitutionality of taxes that impose $15 for a certificate of registration and a $4 decal charge on all trucks using New York state highways. The taxes are imposed not only on New York-based trucks, which are driven proportionately higher miles in New York, but were also charged on trucks based outside of New York, which are driven mostly in states other than New York.
The association argued the taxes were discriminatory against out-of-state truckers. OOIDA established that the challenged taxes resulted in a higher per mile tax rate being imposed on out-of-state trucks, and therefore violated the Commerce Clause.
“If there are other states that think tacking on flat fees to their state truck taxes won’t be noticed as an economic burden to interstate commerce, they need to understand this is not a good idea,” said OOIDA’s Johnston. “We will take them to court in a heartbeat.”