806 P.2d 598 (Okla. 1990), 68401, Private Truck Council of America, Inc. v. Oklahoma Tax Com'n
|Citation:||806 P.2d 598, 1990 OK 54|
|Party Name:||PRIVATE TRUCK COUNCIL OF AMERICA, INC., Circle W. Transportation, Inc., and Roy E. Griffis, On behalf of Themselves and all Others Similarly Situated, Appellants, v. OKLAHOMA TAX COMMISSION, et al., Appellees, and Associated Motor Carriers of Oklahoma, Inc., Intervenor.|
|Case Date:||June 28, 1990|
|Court:||Supreme Court of Oklahoma|
As Amended March 5, 1991.
Appeal from the District Court of Oklahoma County; John M. Amick, Trial Judge.
Class action by and on behalf of non-resident motor carriers challenging the constitutionality of retaliatory/third-tier taxes imposed on non-Oklahoma residents operating foreign based motor carriers, pursuant to 47 O.S.1986 Supp. § 1120(K) and 68 O.S.1982 Supp. § 607.1. District court upheld constitutionality of challenged taxes, denied appellant's motion for summary judgment, including declaratory and injunctive relief, tax payment refunds, costs and attorneys fees, and rendered final judgment for appellees.
REVERSED AND REMANDED FOR FURTHER PROCEEDINGS.
William B. Rogers & Associates, by William B. Rogers and Ronald C. Palmatary, Oklahoma City, and Zuckert, Scoutt, Rasenberger & Johnson, by Richard A. Allen and Andrew R. Plump, Washington, D.C., for appellants.
Oklahoma Tax Com'n by Joe Mark Elkouri and Stanley Johnston, and Office of the Atty. Gen., by Thomas L. Spencer, As Intervenor, Oklahoma City, for appellees.
Kimball, Wilson & Walker, by Thomas G. Ferguson, Jr., Oklahoma City, for intervenor.
Appellants Private Truck Council of America, Inc., Circle W. Transportation, and Roy E. Griffis, (Truckers) 1 have challenged
the constitutionality of 47 O.S.Supp.1986 § 1120(K) and 68 O.S.Supp.1982 § 607.1. The questioned statutes impose fees and taxes on out of state motor carriers, operating in Oklahoma, in the same manner and extent that Oklahoma based motor carriers are taxed in other states. The pivotal issue presented is whether 47 O.S. § 1120(K) and 68 O.S. § 607.1 discriminate on their face against interstate commerce and nonresident motor carriers in violation of both the Commerce Clause, U.S. Const., Art. I, § 8, cl. 3, and the Privileges and Immunities Clause, U.S. Const., Art. IV, § 2, cl. 1. Other issues before this Court are whether Truckers are entitled to reimbursement of litigation expenses and reasonable attorneys' fees, and whether Truckers are entitled to refunds, and if so, whether retroactive or prospective application is appropriate.
In its overall taxing scheme, the State of Oklahoma imposes several fees and taxes on all motor carriers operating within its borders. At the "first tier", the State imposes an annual registration fee, determined by the vehicle's total weight, for all trucks and related equipment operating in the State. 47 O.S.Supp.1985 § 1101 et seq. As a participating member of the International Registration Plan (IRP), an apportioned interstate registration system, Oklahoma also shares its registration fees for Oklahoma based-motor carriers, engaged in interstate commerce, with other participating IRP States, wherein the motor carrier travels. 47 O.S.1985 § 1120.
In return, Oklahoma receives a percentage of nonresident motor carrier's total registration fee which is determined by dividing the vehicle's actual mileage within Oklahoma by its overall total mileage for the preceding year. Thus, with respect to motor carriers engaged in interstate commerce, Oklahoma's total registration fees are determined by the vehicle's registration fee, and its percentage share of the vehicle's in-state mileage. 47 O.S.1985 § 1120(B). No Oklahoma motor carrier is required to pay more than one full registration fee, nor does the State impose registration fees against motor carriers based in non-IRP States. Although Oklahoma does not share its registration fees with non-IRP States, the appellee, Oklahoma Tax Commission, is "authorized and empowered to enter into and make reciprocal compacts and agreements" with non-IRP States. 47 O.S.1985 § 1123.
At the "second tier", the State also imposes a tax on all motor carriers, regardless of their state of registration, for the use of motor fuel within the State. Additionally, a number of special excise taxes are imposed on the use of diesel fuel. 68 O.S.1981 §§ 501 and 601 et seq.
Beyond the traditional registration fees and fuel taxes is a "third tier" tax. Such taxes are known as "mirror" or "retaliatory" taxes, and are also called "third structure" taxes. Third structure taxes are neither apportioned nor prorated, and examples include: ton-mile taxes, based on the truck's weight and miles driven in the taxing state; axle taxes, a flat charge based on the number of axles on each
vehicle; annual fuel marker fees, and trip fees.
In the instant case, retaliatory taxes and fees are imposed solely on certain nonresident motor carriers whose vehicles are registered in states that impose third tier taxes on heavy trucks registered in Oklahoma. 2 The Oklahoma Legislature, by enacting the "mirror" statutes in 1982, intended that registration and licensing fees, and motor fuel taxes "assessed against residents of other states operating similar vehicles in Oklahoma be comparably the same as the (fees and taxes) assessed against residents of Oklahoma operating a similar vehicle for a similar purpose in such other state." 47 O.S. § 1120(K), and 68 O.S. § 607.1(D).
In 1983, the Oklahoma Tax Commission started imposing mirror fees and taxes against motor carriers with vehicles registered in 25 states. 3 The retaliatory taxes and fees, varying in amount, are wholly dependent upon the vehicle's state of registration, because the taxing scheme mirrors the fees and taxes imposed by that state as a condition precedent to the use of that state's highways by Oklahoma based carriers. 4 The revenues generated by these fees and taxes are distributed and used for the construction and maintenance of the highways and roads in the State of Oklahoma.
Truckers filed this class action, on behalf of themselves and all other persons similarly situated, on December 17, 1984. With respect to the Commerce Clause, Truckers keenly recognized that a State may require persons engaged in interstate commerce to pay their fair share of state taxes. 5 However, Truckers argued that Oklahoma's retaliatory fees and taxes are a blatant and an egregious violation of the Commerce Clause, because they discriminate, on their face, against nonresident motor carriers. Truckers sought a declaratory judgment declaring Oklahoma's retaliatory statutes unconstitutional, and also requested a permanent injunction against collection of the challenged taxes, refunds of all taxes and fees paid by class members, and attorneys' fees and cost. After having its "class action" certified as such pursuant to 12 O.S.Supp.1987, § 2023(B)(1)(b) and (B)(2), Truckers moved for summary judgment.
The Tax Commission argued that Truckers' frontal attack upon the constitutionality of Oklahoma's statutes could not be determined without a "cost impact" analysis. Since Truckers failed to produce any factual evidence showing actual damages, measured in dollars and cents, resulting from the alleged discriminatory intent or effect of the statutes, the Tax Commission
urged the district court to reject Truckers' claim of facial unconstitutionality.
While not representing any party in this case, the Oklahoma Attorney General and the Associated Motor Carriers of Oklahoma, Inc., were granted permission to intervene pursuant to 12 O.S.Supp.1984, § 2024. Since the imposition of third structure taxes upon Oklahoma base-registered operators of motor carriers constitutes a barrier to conducting interstate business in that taxing state, both intervenors, and the Tax Commission, asked the trial court to uphold the constitutionality of the disputed statutes, because the Oklahoma Legislature further promoted interstate commerce by equalizing the third tier taxation burden.
Finding "no disputed material issues of fact," the district court denied Truckers' motion for summary judgment. The court further upheld the constitutionality of both retaliatory statutes, and granted final judgment to the Tax Commission, as a matter of law. In its memorandum opinion, the district court expressly acknowledged that the Supreme Judicial Court of Maine had struck down Maine's reciprocal truck taxes as a violation of the Commerce Clause. 6
Curiously, the district court also noted that the Maine Supreme Judicial Court had found unpersuasive, and "refused to accord any precedential value" to an earlier New Jersey trial court decision which upheld New Jersey's retaliatory truck tax. 7 The Maine Court found that "any significance accorded the Supreme Court's 1974 summary disposition of B & L Motor Freight must yield to supervening 'doctrinal developments.' " See Private Truck Council, 503 A.2d, at 218 n. 7.
Nevertheless, our district court, relying on the United States Supreme Court's summary disposition of B & L to support its contention that "the matter was no longer open to question," concluded:
It would seem that the view taken by the New Jersey Court is better reasoned and more in accord with the views of the United States Supreme Court.
It is the actual effect on interstate commerce that we must consider, not the form of the statute. It seems to me that the purpose of the reciprocal laws is to motivate all states to abandon excessive taxes on out-of-state truckers, and I am not willing to say that such laws are either an undue burden on interstate commerce or that they violate the privileges and immunities clause.
Truckers appeal alleging that the...
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