Is ST3 car tab tax unconstitutional?

Is ST3 car tab tax unconstitutional?
A class action lawsuit filed against Sound Transit by seven plaintiffs argues that the 2015 state law authorizing the new motor vehicle excise tax (MVET) violated a state constitutional provision. The lawsuit is seeking $240 million in MVET revenue that has been collected. Photo author: City of Redmond

A class action lawsuit recently filed against Sound Transit and Washington state by seven plaintiffs could answer the question already asked by some lawmakers and Puget Sound drivers regarding ST3’s new motor vehicle excise tax (MVET): is it constitutional?

The lawsuit comes after two legislative sessions in which lawmakers were unable to agree on legislation providing car tab tax relief following ST3’s approval by voters in 2016, due to concerns raised by Sound Transit officials over how it could affect project schedules.

The lawsuit represents the legal side of the opposition to the new MVET, arguing that the 2015 law creating it violated Section 2 Article 37 of the Washington State Constitution. That article states “No act shall ever be revised or amended by mere reference to its title, but the act revised or the Section amended shall be set forth at full length.”

The lawsuit asserts that the 2015 law failed to set “forth at full length” the state law it was revising. That claim was one among many raised by Republican state lawmakers during two Senate investigative hearings held late last year. The legal controversy over the ST3 car tab tax revolves around this section of the 2015 state law authorizing it, should it receive majority voter approval.

“Notwithstanding any other provision of this subsection or chapter 82.44 RCW, a motor vehicle excise tax imposed by a regional transit authority before or after July 15, 2015, must comply with chapter 82.44 RCW as it existed on January 1, 1996…”

The statute referenced was a 1990 vehicle depreciation schedule used to calculate a vehicle’s MVET. The legislature eventually repealed and replaced it with a 2006 schedule that some lawmakers have unsuccessfully attempted to swap for the ST3 tax. Others have proposed using the Kelley Blue Book.

One of the two lawyers representing the plaintiffs is Gonzaga University law professor David DeWolf, who testified at one of the Senate investigative hearings and ran unsuccessfully against State Supreme Court Justice Mary Yu in 2016.

At the hearing he said the use of the word “notwithstanding” in the 2015 law makes the provision problematic because it “doesn’t set forth in full what the existing statue is that would be affected and how it would be affected.”

DeWolf also cited the 1979 State Supreme Court case Weyerhaeuser v. King County, which concerned the role of local government to regulate forest practices within its shorelines under the 1971 Shoreline Management Act.

The court ultimately ruled that the law “in question violated the constitutional requirements for amending an existing statute, and is void. We do not dispute the legislature’s power to enact…a restriction on the authority it granted in the SMA. In this case, however, it has not done so in a manner consistent with the requirements of the state constitution.”

The 1979 opinion referenced the 1910 high court decision Spokane Grain & Fuel Co. v. Lyttaker, which further elaborated the state’s “forth and full” requirement for state laws:

“The purpose of the constitutional provision was to protect the members of the legislature and the public against fraud and deception; not to trammel or hamper the legislature in the enactment of laws. If the act in question were entitled an act to amend the lien laws of the state, by proper reference, its validity could not be called in question, yet, what additional information would such a title or such an act bring home to either the legislature or the public. True, such an amendment would-direct attention to the existing laws on the subject, but such was not the object or purpose of the framers of the constitution. So long as a legislative act is complete in itself, and has a sufficient title, it satisfies the requirements of the constitution, whether it contains much or little.”

However, pertinent state officials have cast uncertainty on DeWolf’s assertion. That includes State Code Reviser Kyle Thiessen, who told panel members at the Senate investigative hearing that “adoption by reference is a time-honored and common practice by the legislature. To me there’s nothing inherently concerning about adopting by reference.”

Whether state lawmakers themselves knew which statute the 2015 law referenced is also unclear. On the Senate floor, Sen. Doug Ericksen (R-41) proposed an amendment that pertained to the MVET depreciation schedule. Yet, House Transportation Chair Judy Clibborn (D-41) has said publicly that she didn’t realize Sound Transit would use the repealed depreciation schedule.

The lawsuit is seeking $240 million in “unauthorized taxes.” The lawsuit estimates there are over one million people who have paid the new ST3 car tab tax and would therefore receive a portion of the settlement.

1 COMMENT

  1. I live in Orting, WA. we have NO public transportation here and they have no plans in place for any in the future and we pay the ST3 on both of our tabs. taxation for no services. sounds illegal to me!

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