State Supreme Court: Local fuel taxes not only for roads and bridges

By Tyson Fisher, staff writer

Local sales taxes on motor fuels are not required to go toward public roads and bridges, the Georgia Supreme Court ruled on June 5. The decision came after the Georgia Motor Trucking Association sued the Georgia Department of Revenue over how local fuel taxes were being used.

The trucking association filed the lawsuit against the Department of Revenue after the Georgia General Assembly enacted the Transportation Funding Act of 2015, which amended motor fuel taxes. The trucking association claimed the taxes were unconstitutional.

However, a trial court sided with the government, stating “the challenged sales taxes were not ‘motor fuel taxes’ within the meaning of the Constitution,” according to court documents.

Of the several claims made by the Georgia trucking group, the Georgia Supreme Court opined that all claims fail if local sales taxes imposed on the retail sale of motor fuel are not “motor fuel taxes” as that term is used in the Motor Fuel Provision. The state Supreme Court ruled that local retail taxes are in fact not “motor fuel taxes.”

The Georgia Constitution does state that fuel taxes should go toward roads and bridges or a sum equal to the total taxes. An act passed in 1927 provided that “each distributor of fuels” would be taxed a certain amount per gallon, with specific instructions on where that money goes.

Over the decades, the act was amended to adjust the fuel tax, but one aspect remained constant: the use of the word “distributor.” Also consistent was the disbursement of taxes, including the state highway fund and for counties to use exclusively for roads and bridges.

In its opinion, the Georgia Supreme Court ruled “that the term ‘motor fuel taxes’ means those motor fuel taxes levied on distributors, not the local sales taxes generally applicable to all sorts of tangible personal property.”

The precedent was set more than 60 years ago with “motor fuel taxes” defined as “the per-gallon taxes imposed on distributors in 1952.” Therefore, local taxes are exempt from any fuel taxes specifically earmarked for roads and bridges in the 2015 act. LL