State Laws Newsletter, September 4, 2015

Written and edited by Robert C. Pitcher, American Trucking Associations

MI to End Pay to Play – On June 17, 2015, Governor Snyder of Michigan signed legislation (S.B. 100) that will end the longstanding requirement in that state that taxpayers who want to appeal disputed tax liabilities before the Michigan court of claims must pay those liabilities before they do so. A taxpayer has always been able to take its case to the Michigan tax tribunal without paying first, but that body is administrative rather than judicial, and the administrative law judges there are not required to be attorneys. The new law will be effective no later than the end of March next year.

Don’t Mess with … Yes, We Get It! – The Office of the Texas comptroller of Public Accounts, the state’s tax agency, announced last week that a man convicted of evading the Texas fuel tax has been sentenced to 40 years in jail. The specific offense evidently had to do with transporting and selling dyed diesel for highway use. The length of the prison term, however, stemmed from the culprit’s several previous felony convictions – which may not have involved taxes — but it’s great advertising for the Comptroller’s Office. For a few more details, click here. For a long string of other convictions for evading the Texas fuel tax, click here.

U.S. Court Decides another Railroad Case – Last week, SLN reported on a procedural step in the long-running dispute in the federal courts between Alabama, which imposes a sales and use tax on the diesel fuel used by railroads in the state, and a railroad that argues this tax is illegally discriminatory under federal statute. Last Friday, however, the U.S. Court of Appeals for the Sixth Circuit decided a case involving another state fuel tax imposed on the rails, this time Tennessee’s. That tax was a tax on users of diesel fuel by carriers of passengers or freight, including railroads as well as motor carriers. Several railroads challenged the imposition on grounds similar to those argued in the Alabama case; that is, that the Tennessee tax discriminated against them in violation of the federal “4R Act,” 49 U.S. Code section 11501. The tax left them, the railroads argued, the only taxpayers who did not use the highways to whose maintenance the revenues would go. The district court had denied the railroads a preliminary injunction, and the case was before the appeals court on that question. The court agreed with the district court on that point, saying that it was not dispositive that Tennessee had “singled out” the railroads; the tax might still, if it did not leave the rails disadvantaged vis-à-vis their competitors, be valid. On this latter point, though, the court noted that the Supreme Court’s latest decision in the Alabama case required an analysis of just this kind of competitive effect, and sent the case back to the district court for that analysis. BNSF Ry. Co., et al. v. Tennessee Dept. of Revenue, et al., docket nos. 14-6285 through -6288, and -6401, decided August 28, 2015.

CO Chain Requirement Now in Effect – As of September 1, Colorado’s requirement that vehicles over 26,000 pounds gross weight carry chains on the central portion of Interstate 70 in the state is now in effect. That rule holds between mileposts 133 (Dotsero) in the west and 259 (Morrison) in the east, and applies from now through the end of May next year. Fines for a failure to carry chains adequate for the vehicle operated are expensive. For more details, contact the Colorado Motor Carriers Association at 303-433-3375.