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.”

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