Monday, September 4, 2017
There should be a statute of limitations on removal of exemptions!
Weekly Opinion Editorial
CAR TAX UPHELD!
by Steve Fair
In a 5-4 decision, the Oklahoma Supreme Court ruled that Oklahoma House Bill 2433 authored by Rep. Leslie Osborn, (R-Tuttle), and Senator Kim David, (R-Porter) is constitutional. That means that Oklahomans will see an increase of 1.25 percent sales tax on motor vehicle purchases. Currently Oklahomans pay 3.25 percent excise tax on motor vehicle purchases, so the total take for the government on car sales will now be 4.5 percent.
The Oklahoma Automobile Dealers Association filed the lawsuit challenging the constitutionality of the bill stating it violated the ‘last minute’ provision in the state constitution and it did not get 75 percent approval from lawmakers. Five of the Justices on the court disagreed, saying HB 2433 didn’t create a new tax or fee, but removed an ‘exemption.’ Those Justices were Gurich, Kauger, Winchester, Reif, and Wyrick. The Justices who voted against were Combs, Watt, Edmondson, and Colbert.
The original enactment of this exemption from the sales tax coincided with the first levy of the motor vehicle tax in 1935. In other words, Oklahomans have enjoyed an exemption from paying sales tax on motor vehicles for 82 years, but not anymore.
Hour Bill 2433 passed the Senate (all Republicans) 25 to18 and passed the House 52(all Republicans) to 47(26 Democrats, 21 Republicans) in the last week of session. Enough lawmakers switched their votes on the emergency clause to allow the law to become effective as soon as the governor signed it. That is why the Supreme Court had allowed it to be implemented before the heard the lawsuit on its constitutionality. Three thoughts:
First, we need a statute of limitations on removal of exemptions. If a good or service has not been taxed for eighty years, then it should be considered a new tax or fee. No one in the legislature was alive when this exemption was passed in 1935. This was clearly a loophole the legislature was looking for to fill this year’s budget hole. When 90% of the population in the state wasn’t alive when the exemption was initially granted, it is ridiculous to not see this as a new tax. You can package it anyway you want, but this was an end run on SQ #640.
Second, the Oklahoma Supreme Court continues their inconsistent rulings. Clearly this was a revenue raising bill passed the last week of session, a clear violation of the law. It is past time for judicial reform in Oklahoma. Eliminating the retention ballot and requiring judges to run as candidates, like district and associate judges is one solution. Term limits is another.Third, there appears to be a movement to attempt repeal of SQ #640. Some lawmakers believe it binds them and makes it difficult to do their job. SQ #640 doesn’t stop the legislature from passing revenue bills- it just makes it harder. Oklahomans aren’t going to repeal a bill that restricts the legislature from raising taxes. Good luck with that initiative petition.