Oregon Trucking Companies Challenge State Weight-Mile Taxes as Unconstitutional
Court’s Decision on Unconstitutionally Excessive Taxes May Weigh Heavily on Oregon Trucking Operations
Trucking companies and the Oregon Trucking Association have sued the Oregon government and officials for overcharging heavy vehicles using Oregon’s roads. They allege lawmakers failed to fulfill their Oregon constitutional duty to apportion highway costs fairly among highway users, instead requiring the owners of heavy trucks to pay disproportionately in weight-mile taxes. The plaintiffs have asked the court to stop the state from collecting unconstitutionally excessive truck taxes and refund previous amounts overpaid.
The government defendants have moved to dismiss the case based on immunity and other legal issues. The Circuit Court of Douglas County, Oregon, heard that motion in July 2024 and, as of September 13, 2024, has not yet ruled.
Oregon’s Constitution expressly requires the state to allocate auto and heavy truck highway taxes proportionately to those vehicles’ use of the roads
The Constitution of Oregon contains a specific provision directing the collection and use of highway tax revenues. Article IX, section 3a(3) requires the state government to fairly apportion fuel and motor vehicle taxes to ensure that the shares of revenues paid for the use of “light vehicles” and “heavy vehicles,” respectively, are “fair and proportionate to the costs incurred for the highway system because of each class of vehicle.” This section also provides a specific mechanism for keeping the taxes fair, directing the state legislature to review the taxes every two years and adjust rates if necessary. A state statute implements this requirement, directing a state agency to conduct and submit the report to the legislature. O.R.S. 366.506.
Plaintiffs’ lawsuit alleges that truck owners have been paying more than their fair share of Oregon’s highway taxes
According to the plaintiffs’ complaint, from 2005 to 2017, the tax balance between light and heavy vehicles was nearly perfect—that is, each group paid an amount of tax roughly equivalent to the group’s contribution to the overall road costs. HCAS for 2019–2021 Biennium at 49. Since then, however, truckers’ share has increased above their portion of the costs. The following three biennial reports (2019-21, 2021-23, and 2023-25) revealed that heavy vehicles overpaid by roughly 3%, 16%, and 32%, respectively. The most recent report estimates truck owners will overpay by $193 million each year.
The government defendants asked the court to dismiss plaintiffs’ claims on procedural and substantive grounds
In May, the defendants moved the court to dismiss the claims based on various legal obstacles, including lawmaker immunity, separation of powers between the branches of government, and the lack of a right to sue the government for money damages resulting from constitutional violations.
The plaintiffs responded to this motion, and the court heard oral argument in July.
What’s next?
The court did not rule on the motion from the bench at oral argument, instead it took it under advisement (which is typical for complex dispositive motions). Thus, the court will issue its decision in the future, either dismissing plaintiffs’ claims at the pleading stage or allowing them to prove their claims.
This lawsuit has the potential to greatly impact trucking operations in Oregon. An outcome in plaintiffs’ favor could result in substantially lower truck taxes and serve as a reminder to government officials that their conduct is subject to limitation by the state constitution and courts. Moreover, motor carriers who paid the allegedly unconstitutional tax could also receive refunds of the unconstitutional amount, and if any motor carriers shifted that tax obligation to their leased owner-operators, the owner-operators should be the beneficiary of any refund due at the end of the case.
For more information on this case or other state tax or constitutional disputes, please contact CullenLaw attorneys at info@cullenlaw.com.
Read more constitutional law challenges
Other challenges brought by CullenLaw that involved excessive taxes include this one where we obtained a $44.4 million settlement against the State of New York after successfully demonstrating that the State had illegally levied and collected taxes under its Highway Use Registration and Decal program.
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