An Oklahoma district court lifted a restraining order preventing the Oklahoma Tax Commission from implementing new rules that prohibit trucking companies from using third party registration agents to establish residency in the state.
The court ruled that OTC’s new requirements are a lawful exercise of its rule-making authority and do not infringe on the trucking industry’s constitutional rights and registration agents charge. The new rules, which do not apply to owner-operators, are effective April 15.
Following the April 12 ruling, IRP Inc., which adminsters the International Registration Plan, lifted monetary sanctions which would have deprived Oklahoma of fees collected on its behalf by other states. IRP President John Mamone said other sanctions, including suspension of Oklahoma’s IRP voting rights, may stand until a peer review this summer of fall can confirm that the new rules are being enforced.
The lawsuit was brought by ProCert Inc., an Oklahoma transportation consuting firm that offers registration services. The company’s attorney, Newt Cunningham III of the Dallas law firm Roberts, Cunningham and Stripling, said they are considering an appeal.
“I think the rule is a bad one and I think IRP Inc. has done the industry a gross disservice,” he said. Cunningham also warned that Oklahoma’s new “proof of residency” requirements could put many small businesses out of business -- including registration agents and small trucking companies. Many small carriers register their trucks in Oklahoma because they can’t afford high sales and other taxes levied in their home states, he explained. Now they’ll either have to register in their own states or set up the required “brick and mortar” offices now required by Oklahoma. “How many small truckers out there can afford that?” he asked.
But Oklahoma is not yet square with IRP Inc. Illinois has asked the group’s Dispute Resolution Committee to consider whether or not jurisdictions harmed by Oklahoma’s old rules should be entitled to renumeration. Many claim they lost registration fees through Oklahoma’s lax requirements for first-year mileage estimates, which the OTC has tightened. A request by Oklahoma to delay a scheduled committee hearing was denied by a U.S. District Court.
Also, Oklahoma says owner-operators come under different rules, thus are not included in the new residency requirements. Mamone said that will likely be a topic for further discussion by the Dispute Resolution Committee and the IRP Board.