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Court Peels Back New York’s Highway Use and Decal Fees

February 3, 2016

By David Cullen

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Image: New York State Department of Taxation and Finance
Image: New York State Department of Taxation and Finance

New York State’s Supreme Court has ruled as unconstitutional the highway-use registration and decal fees imposed on all trucks that operate in the Empire State.

The decision, handed down on Jan. 22, resolved a class action suit filed back in 2013 by the Owner Operator Independent Drivers Association and individual operators.

The Culllen Law Firm, PLLC, Washington, D.C., which represented the plaintiffs, stated that “In addition to requiring trucks to pay a per-mile fuel tax, New York State has required operators to pay a $15 per vehicle registration fee and a $4 decal fee. These registration and decal taxes apply equally to in-state and out-of-state operators, regardless of the number of miles they travel in New York State.  In its ruling, the Court held that the taxes violate the Commerce Clause of the U.S. Constitution by discriminating against out-of-state operators.”  

Along with permanently enjoining the State of New York from collecting any more of the fees, the law firm said the court directed the parties to submit briefs within 60 days addressing issues pertaining to the calculation and administration of refunds to class members.

The Cullen Law Firm estimated that the amount of refunds could exceed $30 million.

"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, in a press release issued by the law firm.

In its news release on the ruling, OOIDA said that it “held that 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. The imposition of the challenged taxes results 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 '80s and '90s and the states lost every one of them,” said OOIDA President and CEO Jim Johnston. “Given that history, we were shocked that New York even thought they could get away with this unconstitutional tax.

“The amount for the New York HUT/decal is $19, which is not huge,” he added. “But if other states were to implement this tax, it would be huge – collectively and in administrative costs.”

Comments

  1. 1. Kenny [ February 04, 2016 @ 04:02AM ]

    Feds got something right ,good job. Funny NY ran all those adds saying how friendly they are to do business with. But we all know that the drinking water in The east coast has that AH factor in it , they just can't help their selves.

  2. 2. Rodney [ February 04, 2016 @ 05:43PM ]

    good old ny, pay road taxes through Ifta to NY, than pay another .04 Loaded and .01 empty per mile to my hut, nothing like getting taxed twice, I hope this ruling will mean they get rid of the hut tax altogether not just for out of state trucks

  3. 3. Michael Goodman [ February 04, 2016 @ 06:11PM ]

    I am very glad that New York lost this lawsuit. Now, perhaps we could do something about Kentucky and New Mexico. Both have weight/distance taxes in addition to their highway fuel taxes.

  4. 4. JT [ February 05, 2016 @ 05:17AM ]

    Good job, now let's do the same to New Mexico, Kentucky, and Oregon.

 

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