High court upholds ST3 car tab tax

High court upholds ST3 car tab tax
In a Feb. 13 ruling, the Washington State Supreme Court concluded that the ST3 motor vehicle excise tax does not violate the state constitution. Photo: freepik.com

The Washington State Supreme Court ruled this week in a 7-2 decision that a provision in a 2015 state law authorizing the ST3 motor vehicle excise tax (MVET) does not violate the state constitution. The plaintiffs in the class action lawsuit had argued the law was unconstitutional because it didn’t specify which existing state statute it was modifying. However, the tax could still be removed if Initiative 976 manages to survive its legal fight; a King County judge this week upheld most of the initiative, but an appeal is expected.

However, plaintiffs’ attorney Joel Ard in the ST3 case told Lens that aside from any potential tax relief denied by the ruling, it opens the door for very ambiguous bill language in the future.

“They’ve green-lighted this idea you can write a new law that alters an existing law and not put it in the code,” he said. “All you need to put is a clue for someone to look somewhere else and find what governs their conduct.”

The lawsuit against Sound Transit was filed in 2018 after two Senate investigation hearings were held to examine whether the MVET was legal, in which expert opinion was mixed. The 2015 law approved by the state legislature authorized Sound Transit to place a measure on the ballot for an MVET to pay for transit and light rail projects. The controversy concerns a sentence replacing an existing vehicle depreciation schedule used to actually calculate the MVET owed.

The plaintiffs and others have said that the way the provision was written violated Section 2 Article 37 of the Washington State Constitution: “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 high court in its majority opinion wrote: “the statute is a complete act because it is readily ascertainable from its text alone when which depreciation schedule will apply. The MVET statute properly adopts both depreciation schedules by reference.”

In a dissenting opinion, Justice Gordon McCloud said the problems with the 2015 statute are “severe and pervasive. They completely undermine its (constitutional) goals of ‘avoiding confusion, ambiguity, and uncertainty in the law.’”

McCloud also noted that MVET has become so confusing that the wrong depreciation was used until Washington Policy Center Transportation Director Mariya Frost discovered it right before the case was heard by the State Supreme Court. In response, State Attorney General Bob Ferguson pulled out of the case hours prior to the hearing.

However, the court majority opinion concluded that because “Sound Transit’s actions do not have any bearing on the constitutionality of the MVET statute itself, this notice does not impact our holding.”

Nevertheless, Ard says “it was Sound Transit’s key element to their case. I’m very shocked that the majority (decision) didn’t…give some explanation on how that can be so utterly irrelevant. Sound Transit in all their briefs…insisted that they were then and always have been using the 1996 schedule. (But) they didn’t know it. Their outside lawyers didn’t know it.”

Frost told Lens that the ruling is “surprising – elected judges have chosen to ignore facts which most everyone, including the AG, recognized were critical to the case.”

Along with I-976, state lawmakers may choose to take separate action regarding the ST3 MVET. SB 6606 sponsored by Majority Floor Leader Marko Liias (D-21) nullifies a section of I-976 that repeals the ST3 MVET but switches the tax to a 2006 vehicle depreciation schedule. Three Republican-backed proposals have also been introduced but none cleared the Senate Transportation Committee prior to the legislative cutoff date. SB 6606 has been placed on second reading in the Rules Committee.

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