The trucking industry has had a mixed record in court in the past few months. Here's a rundown on some cases that may affect your company and its workers.
Weight-distance tax
The Oregon Dept. of Transportation (ODOT) won a round against the American Trucking Assns. (ATA) and three carriers in the battle over Oregon's unique highway taxes. In this case, ATA was not challenging Oregon's weight-distance tax itself but the “flat fee” alternative available only to carriers of logs, sand and gravel in dump trucks, and wood chips. A state trial court had ruled that the fee was not discriminatory but the state court of appeals reversed that decision. Then, on December. 15, the Oregon Supreme Court overturned the appeals court. The court's ruling means that OTR carriers will continue to pay more of the total highway tax burden in the state than if the alternative fee for specialized carriers had been abolished.
State income tax
Oregon was also the venue for two decisions in November regarding the scope of a federal ban on state income taxation of motor carrier employees. Section 14503(a)(1) of Title 49 of the U.S. Code states that “No part of the compensation paid by a… private carrier to an employee who performs regularly assigned duties in 2 or more States…shall be subject to the income tax laws of any State…other than the State…of the employee's residence.”
The Oregon Tax Court has ruled that a trucking company dispatcher and a truck tire center's employee who worked in Portland could not claim their Oregon wages were exempt from state income taxes under this provision because they were not regularly assigned duties in another state. Although the decision applies only to Oregon, a victory by the employees would doubtless have prompted similar suits by trucking employees who work in states with income taxes but live in states without them.
Telephone excise tax
Interstate motor carriers, as large users of long-distance phone service, should benefit from several recent rulings limiting the application of federal telephone excise tax. The 3% tax applies to service for which there is a toll charge that “varies in amount with the distance and elapsed transmission time.” Several federal appeals courts have recently ruled that the tax doesn't apply to long-distance calls that were billed by time alone and not distance.
However, the IRS announced in October that it was appealing other cases and would continue to try to collect tax on long-distance calls. Congress could settle the matter, but bills introduced by three Senate Finance Committee members and more than 100 House members to repeal the entire telephone excise tax have gone nowhere so far.
Multiemployer pension plans
Three circuit courts recently ruled for motor carriers. On October 12, the Second Circuit sustained a district court's standing to determine that two companies were not liable for a third company's withdrawal liability from a Teamsters plan, even though they shared the same management personnel and mailing address. Two days earlier, the Eighth Circuit ruled that a district court had jurisdiction to remand to a fund's trustees a dispute between CRST and another Teamsters plan. On August 29, the Seventh Circuit reversed a district court and ruled that Roadway Express was not the employer for pension plan purposes of drivers it had leased from Transpersonnel Inc.
The bottom line: Although the underlying laws in these cases date back decades, carriers still need to be watchful of how courts rule. Any of these cases could leave carriers facing large liabilities, new opportunities, and major organizational and operational decisions.
