OOIDA’s successful class action lawsuit against New York’s Department of Taxation and Finance was concluded April 19, 2017, after a hearing in Albany found the near-record settlement a fair amount. The state’s Supreme Court – which is the state’s trial court – ordered the state to pay a total of $44,429,473.
The lawsuit challenged certain highway taxes as unconstitutional and discriminatory against out-of-state truckers who have paid the taxes in order to do business in New York. OOIDA’s legal action represents a class of all interstate motor carriers who reside and operate trucking equipment primarily outside New York who have paid the taxes.
On Jan. 22, 2016, the court was decided in favor of the truckers. The court ordered the distribution to commence on or before 120 days. Cash settlement checks should be received by the class members 90 days following the date the checks are mailed.
Attorneys for OOIDA filed the complaint in the Supreme Court of the State of New York, County of Albany in the fall of 2013. The action named the defendants as the New York State Department of Taxation and Finance, Thomas H. Mattox, individually and in his official capacity as commissioner; 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 were OOIDA and OOIDA Members Bryan Spoon doing business as Spoon Trucking, Steve Bixler, Jack McComb and William “Lewie” Pugh.
The class action lawsuit challenged the constitutionality of taxes that impose $15 for a certificate of registration and a $4 decal charge on all trucks using New York state highways. The taxes are imposed not only on New York-based trucks, which are driven proportionately higher miles in New York, but also on trucks based outside of New York, which are driven mostly in states other than New York.
“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 certificate and decal is $19, which is not huge, but if other states were to implement this tax, Johnston said it would be huge – collectively and in administrative costs.
With $44.4 million, New York is second to only one other state in size of the refund. Alabama was discriminating against out-of-state truckers by requiring them to pay a marker fee, which was not required of in-state truckers, and had to refund more than $68 million.
“If there are other states that think tacking on flat fees to their state truck taxes won’t be noticed as an economic burden to interstate commerce, they need to understand this is not a good idea,” said OOIDA’s Johnston. “We will take them to court in a heartbeat.”
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