Lawsuit Update
New York HVUT decal case continues to move along

OOIDA v. New York State Department of Taxation is a Commerce Clause challenge to New York’s collection of a $15 registration fee and a $4 decal fee related to the state’s administration of the New York Highway Use Tax. This case does not challenge the collection of the HVUT itself; it only challenges the collection of the registration and decal fees on out-of-state truckers.

OOIDA’s attorneys filed a class action complaint Oct. 8, 2013, in the Supreme Court of the State of New York – the state’s trial court – in Albany County. The action names the defendants as the New York State Department of Taxation and Finance; Thomas H. Mattox (individually and in his official capacity as commissioner), along with the State of New York; and Andrew Cuomo (individually and in his official capacity as governor of the State of New York).

Named plaintiffs in the case are OOIDA and OOIDA Members Bryan Spoon dba Spoon Trucking, Steve Bixler, Jack McComb and William “Lewie” Pugh.

Latest actions in the case
On Jan. 28, 2014, the Supreme Court of New York denied the State’s motion to dismiss. It held that OOIDA had pleaded a case that properly alleged that neither tax is apportioned on a vehicles’ actual use of New York’s highways and that the taxes impose heavier per-mile taxes on out-of-state trucks than on New York state-based trucks. This establishes a valid issue as to whether the taxes are unconstitutional.

On May 8, 2014, OOIDA completed class certification briefing, and a ruling on that is expected during summer 2014. The class would include anyone who has paid the unlawful registration and decal fees.

In May 2014, the State of New York produced information to OOIDA during the discovery phase establishing that the total amount of unconstitutional taxes collected is at least $10 million. If the court grants class certification, OOIDA will seek refunds for all class members, once it obtains a ruling from the court that the taxes were unconstitutional.

This challenge is based on ATA v. Scheiner (1987), which held that a similar flat tax was an unconstitutional burden on interstate commerce.

This New York case raises essentially the same issues successfully raised by OOIDA against the State of Alabama in the mid-1990s. New York began collecting these fees in 2012. LL