11/2/2017Oklahoma Supreme Court Backs Car Tax Hike
Electric vehicle owners will pay less, but new vehicle buyers will pay more under Oklahoma Supreme Court ruling.
Plug-in electric vehicle owners in Oklahoma will spared from paying an extra $100 every year to the state, but buyers of other automobiles will now have to pay an additional 1.25 percent in state sales taxes. The Oklahoma Supreme Court on Wednesday reiterated its position that the procedures used to enact the electric car tax were unconstitutional, while those used for the sales tax were just fine.
Attorney Gary L. Richardson, a Republican candidate for governor, filed a lawsuit hoping to have both tax hikes thrown out. House Bill 1449 imposed a $100 fee on electric vehicles and a $30 fee on hybrids. House Bill 2433 raised removed a sales tax exemption on new vehicles, effectively raising the rate that must be paid from 3.25 percent to 4.5 percent. On a car costing the national average of $33,560, this represented an increase of $419.
Both tax hikes passed in the final five days of the legislative session, and under the state constitution, no "revenue bills" may be passed at the last minute unless they receive three-fourths supermajority votes in the House and Senate. HB 2433 passed 52 to 47 in the House. The vote for the electric vehicle tax was closer at 61 to 36.
The high court pointed to its previous decisions on both matters and refused to reconsider the matter. Last week, the justices ruled that the hybrid and electric vehicle "fee" was very clearly a tax meant to raise revenue for the state. As such, it did not pass with the required supermajority and was found to be illegal.
"None of this is to say that the legislature cannot place a tax on electric-drive and hybrid-drive vehicles to further a goal of equalizing the burdens of road maintenance," Justice Joseph M. Watt wrote for the court. "But, if the legislature wishes to do so, it must comply with Article V, Section 33 [of the state constitution] because the people have insisted that legislative measures 'intended to raise revenue' -- i.e., those whose primary effect is to reach into the people's pockets to take more money to fund state government -- be significantly more difficult to enact than other types of legislation."
On the other hand, the high court had previously ruled that it was legal to remove the 1.25 percent discount automobiles had previously had from the 4.5 percent sales tax because this was not a new revenue raising measure. Richardson was pleased that the electric vehicle tax was struck down, but he was displeased that the sales tax hike was upheld.
"The one silver lining I take from the Oklahoma Supreme Court's decision today is that they made the stakes for the next Oklahoma governor crystal clear," Richardson said in a statement. "Oklahoma needs governor who will be a defender of the constitution. Oklahoma needs a governor who will audit every state agency, trust, and authority. And Oklahoma needs a governor who will stand on our conservative principles."
A copy of the ruling is available in a 3.5mb PDF file at the source link below.