ATA argues tolls are not taxes in Rhode Island lawsuit

The American Trucking Associations continue to battle Rhode Island in the courtroom over the state’s truck-only tolls. Now in the appellate court, ATA is arguing that technically tolls are not taxes, and therefore a law blocking lawsuits against taxes does not apply.

Per the Tax Injunction Act, lawsuits that “enjoin, suspend or restrain” collection of state or local taxes, except where no “plain, speedy and efficient remedy” is available in state court are barred.

ATA said tolls are not taxes within that meaning. In its brief, ATA states the dismissal “departs from the language, history, policy and consistent judicial construction of the Act.”

Backing its position, ATA claims that evoking the Tax Injunction Act for tolls is unprecedented.

ATA says that the district court’s dismissal of its case is the “only ruling, from any court, that has ever found the Tax Injunction Act applicable to challenge to a highway toll or similar user fee.”

The district court justified applying the Tax Injunction Act to ATA’s lawsuit by explaining that for a toll to be an actual toll there must be a “direct correlation between the fee or toll and the use of the (tolled) property.”

The court stated that Rhode Island’s truck-only tolls, “while dubbed ‘tolls,’ are really a highly targeted and sophisticated tax designed to fund infrastructure maintenance and improvements that would otherwise need to be paid for by other forms of tax-generated revenue.” Consequently, the court applied the Tax Injunction Act to the case and granted summary judgment to RIDOT Director Peter Alviti.

ATA countered that assessment by pointing out the following regarding Rhode Island’s toll:

• Tolls are imposed by an agency, not the legislature.
• Tolls fall on only a very small subset of the population.
• Amounts collected are placed in a special fund and may not be directed to the state’s general fund.
• Tolls are administered by RIDOT and RITBA, not by state tax officials.
• The legislature characterized the charges as tolls, not taxes. LL