Industry News

State Laws Newsletter, March 21, 2014

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March 21, 2014

Written and edited by Robert C. Pitcher

IN County Finds APUs Exempt – The Indiana Motor Truck Association reports that during a recent property tax audit of a motor carrier based in Marion County (Indianapolis and its suburbs), the county’s auditor at first considered the carrier’s auxiliary power units to be subject to personal property tax, since they had been installed after the company had purchased the tractors.  Rolling stock of for-hire carriers is exempt from property tax in Indiana through the payment of an in-lieu fee at registration.  Following discussions with the carrier, the auditor changed his position, and exempted the APUs.  IMTA points out that Marion County has recently hired more auditors to conduct property tax audits of businesses, and suggests that the result in this case may come in handy either in that county or elsewhere in the state.  For more information, contact Gary Langston at IMTA, at gary.langston@imtaonline.net.

Correction to Last Week’s Fuel Tax Chart – Last week, the SLN carried our quarterly table of state and provincial fuel tax rates.  The rates given for gasoline for Georgia were in error.  (The state did not timely notify the International Fuel Tax Agreement that its rates had changed.)   The correct rate is:  16.3 cents per gallon, effective January 1, 2014.  The rate for diesel remains unchanged at 17.9 cents a gallon.   We note in passing that while the rates listed for Georgia are among the lowest in the states, that’s not the whole story.  The rates given above include a 3 percent sales tax.  However, there is an additional 1% state sales tax charged to those who purchase fuel in the state, and there are local taxes on fuel in most Georgia counties.  These levies are not credited through the IFTA reporting process.

AL to Get Tax Tribunal – By legislation (H.B. 105) signed into law by Governor Bentley on March 11, 2014, and effective October 1 this year, Alabama will finally get an independent tax tribunal to hear tax appeals.  Alabama is one of the last states to have such an independent agency.  The new body will have jurisdiction over decisions of the state department of revenue and those of local governments on their sales taxes, unless a locality opts out.  Many localities in Alabama employ their own sales tax auditors or use contract auditors, and this has evidently resulted in conflicting practices and interpretations of the law.  The first chief judge of the tribunal is expected to be current chief administrative law judge Bill Thompson, whose decisions are highly regarded.  The legislation also adds to taxpayers’ procedural protections under the state’s taxpayer bill of rights.

Court Rules Challenge to CO TABOR Can Proceed – The U.S. Court of Appeals for the Tenth Circuit has held that an unusual challenge to Colorado’s Taxpayer Bill of Rights may proceed in federal court.  This decision upholds a district court ruling almost two years ago.  (See the SLN of 8/17/2012.)   TABOR, as the bill of rights is known, requires a popular vote to approve either an increase in taxes or a major change in state tax policy.  The plaintiffs here argued that this violates the Guaranty Clause of the U.S. Constitution, the provision that guarantees a “republican form of government” to each state of the union, because TABOR, they said, unduly restricts what the legislature may do.  In defense, the state argued that the matter is a political question and the plaintiffs lacked standing to make the challenge.  The appeals court held that at least the plaintiff legislators had standing, and that although the people of Colorado had made a political decision when they approved TABOR in the first place, it wasn’t one that the courts couldn’t rule on in this connection.  Kerr, et al. v. Hickenlooper, docket no. 12-1445, decided March 7, 2014  Observers have pointed out that although the decision does not rule on the merits of the case, the appeals court may nonetheless have invalidated some of the defense’s arguments.  More than half the states have limits of one kind or another on legislative taxing powers.  Prior interpretations of the Guaranty Clause have been few and far between.

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