New York’s $44M settlement with truckers over out-of-state fees given green light

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Updated Apr 26, 2017
New York’s payout to truck drivers was finalized recently when the $44.4 million amount was ruled to be fair.New York’s payout to truck drivers was finalized recently when the $44.4 million amount was ruled to be fair.

A New York court has stamped approval on a $44.4 million settlement reached last year between the state and out-of-state truckers. The April 19 decision closes a class action lawsuit in which the state’s highway taxes on out-of-state truckers were deemed unconstitutional. A New York court found the amount of the settlement to be a fair amount.

In September, the Owner-Operator Independent Drivers Association-led effort reached a $44.4 million refund agreement with the state’s Department of Taxation and Finance. The class action lawsuit challenged the constitutionality of taxes that impose $15 for a certificate of registration and a $4 decal charge on all trucks using New York state highways.

The state’s Supreme Court ruled in January 2016 that the registration and decal taxes in the state were unconstitutional and discriminatory against out-of-state truckers who drive mostly in other states.

The court said out-of-state truckers were paying a higher per-mile tax rate than in-state truckers, which is a violation of the federal Commerce Clause prohibiting states from imposing burdens on interstate commerce.

“If there are other states that think tacking on flat fees to their state truck taxes won’t be noticed as an economic burden to interstate commerce, they need to understand this is not a good idea,” said OOIDA President and CEO Jim Johnston.

According to the court’s ruling, the distribution of the settlement money to class action members will begin within 120 days.