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Virginia Supreme Court Strikes Down Motorist Taxes
Supreme Court of Virginia ruling finds unelected body cannot impose special taxes on motorists.

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The Supreme Court of Virginia issued a ruling yesterday striking down the ability of unelected officials to impose taxes on Northern Virginia motorists. The ruling focused on the Northern Virginia Transportation Authority (NVTA), an unelected body that the legislature created as a means to avoid a direct vote on $300 million in new revenue generated from motorists primarily to fund expensive new mass transit projects. State officials maintained that these "fees" were legal, but the high court disagreed.

"We consistently have held that when the primary purpose of an enactment is to raise revenue, the enactment will be considered a tax, regardless of the name attached to the act," Justice S. Bernard Goodwyn wrote for the court.

Using powers delegated by the General Assembly in 2007, the NVTA voted to impose the following taxes: adding an extra 2 percent fee on the cost of renting a car; an extra $10 fee added to the cost of annual car inspections; a 5 percent tax on the cost of repairing an automobile; an extra $10 fee to register a car; and a fee equal to 1 percent of a car's value the first time it is registered. Non-motorist fees include a tax on the sale of homes of $400 for every $100,000 of the home's value and a 2 percent tax hike on hotel rooms.

The court ruled that these taxes were imposed in violation of Article IV, Section 11 of the state constitution which specifies that the legislature must approve all taxes, and Section 14 which specifies the legislature shall not impose any local or special law "for the assessment and collection of taxes."

"The people of Virginia approved a constitution that places restrictions on the General Assembly's exercise of the taxing power," Justice Goodwyn wrote for the court. "In fact, greater restrictions are placed on the taxing power than are placed on the exercise of most other types of legislative power."

The court found the attempt to sidestep these explicit limitations through delegation was implicitly prohibited by the constitution. The court then found all taxes already imposed by NVTA to be "null and void."

The ruling shatters a bipartisan compromise centered on balancing the budget with the NVTA's regional tax hikes and massive fines imposed on motorists. Both houses of the legislature have passed bills repealing the latter provision, although State Delegate David B. Albo (R-Springfield), a key architect of the original tax compromise, has brought abuser fees back in a scaled-back form.

View the full text of yesterday's decision in a 60k PDF file at the source link below.

Source: PDF File Marshall v. NVTA (Supreme Court of Virginia, 3/1/2008)

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