By Nick Goldstein, vice president of regulatory affairs & assistant general counsel, ARTBA

The Sierra Club won a legal victory in the state of Oklahoma Oct. 24 when a state supreme court decision struck down legislation that instituted registration fees on electric and hybrid vehicles. Despite the fact that the funds raised would go toward road and bridge construction and maintenance, public transit and passenger rail, the Sierra Club said the fees were improperly passed by the state legislature while also contending that “motor vehicle fees are not user fees.” The court agreed in a split 6-3 decision. The court said it struck down the electric and hybrid registration fee because it was improperly classified as a “fee” when it should have been classified as a “tax.” Since there are more legislative requirements for a “tax” than a “fee” under Oklahoma state law, the improper classification forced the court to strike down the fee. The Oklahoma Supreme Court made a similar ruling earlier this year on a recently-enacted cigarette tax.

The court took specific time to note in the decision that “[n]one of this is to say that the Legislature cannot place a tax on electric-drive and hybrid-drive vehicles to further the goal of equalizing the burdens of road maintenance,” only that it must meet the proper legislative and procedural requirements before doing so. The dissenting judges in the case provided further justification for the fees, noting “[t]he fees are to go to the State Highway Construction and Maintenance Fund to compensate the dollars required to maintain Oklahoma roads and highways, the same roads used by electric and hybrid driven vehicles. The fee is a fair exchange for this maintenance.” The full decision can be read here.