OOIDA wins NY decal fee lawsuit

OOIDA wins NY decal fee lawsuit

Assessment violated the Commerce Clause, judge rules

The Owner-Operator Independent Drivers Association (OOIDA) said it won a class-action lawsuit launched two and a half years ago against the state of New York nixing a decal fee imposed on all commercial trucks operating in the Empire state.

OOIDA challenged the taxes as unconstitutional and discriminatory, taking the case to the New York Supreme Court, which declared the fees invalid and unenforceable.

The association said it argued that the fees constituted an “undue burden” on interstate commerce in violation of the Commerce Clause of the U.S. Constitution. 

OOIDA noted that the taxes were imposed not only on New York-based trucks – which are driven proportionately higher miles in New York, the group said – but also on trucks based outside of New York, which are driven mostly in states other than New York.

Yet trucks owned and/or operated outside of New York travel fewer miles on New York highways than trucks owned and/or operated in New York meaning the imposition of New York’s decal fees resulted in a higher per mile tax rate being imposed on out-of-state trucks.

“A number of similar tax cases were fought against states back in the 1980s and 1990s and the states lost every one of them,” OOIDA President and CEO Jim Johnston said in a statement.

“Given that history, we were shocked that New York even thought they could get away with this unconstitutional tax,” he stressed. “The amount for the New York HUT [highway use tax] decal is $19, which is not huge, but if other states were to implement this tax, it would be huge collectively and in administrative costs.”

In addition to its order permanently enjoining the state from collecting any more fees, the court directed the parties to submit briefs within 60 days addressing issues pertaining to the calculation and administration of refunds to class members. It is estimated that the amount of refunds could exceed $30 million, according to the Cullen Law Firm which represented OOIDA.

"The Court's ruling vindicates the constitutional rights of thousands of truck owner-operators, who should be reimbursed by the State of New York for all registration taxes they have been required to pay in violation of the Constitution," said Daniel E. Cohen, lead counsel for the class.

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