Portland, Ore., Approves Tax on Trucks

iStock

This story appears in the May 16 print edition of Transport Topics.

Portland, Oregon’s five-member City Council voted unanimously in favor of a trucks-only tax May 11.

The tax would add 2.8% to the bills of trucking firms that have Portland business licenses.

Portland Bureau of Transportation Commissioner Steve Novick forecasts that taxing trucks will bring in $2.5 million annually over the next four years to pay for repair and maintenance of city streets.

“Thank you to my City Council colleagues for passing the Heavy Vehicle Use Tax this morning, after extensive collaboration,” Novick said via Twitter after the vote. “This tax will ensure that heavy trucks pay their fair share for the damage they cause to our roads.”

The Heavy Vehicle Use Tax applies to vehicles weighing more than 26,000 pounds.

Novick said he expects an additional $16 million a year to be raised through a gasoline-tax increase of 10 cents per gallon, provided voters approve it on Oregon’s May 17 primary ballot.

Trucks already pay a weight-mile tax in Oregon, which doesn’t have a diesel tax.

The ordinance reads: “Due to the fact that a relatively small number of businesses account for most of the heavy-truck activity and therefore most of the costs associated with heavy trucks, most businesses will pay a relatively small amount. On the flip side, a handful of very large trucking businesses will pay more based on their volume of trucking activity.”

Oregon Trucking Associations President Jana Jarvis was “disappointed but not surprised” by the vote to only tax trucks.

“What we do next remains to be seen,” Jarvis said. “This program focuses on Portland’s city streets, which our trucks use far less than the state’s highway system. If they put a surcharge on the weight-mile tax because you make a delivery or a pickup in Portland with two of your 100 trucks, you would have to pay that on all miles traveled in the state.”

She called the process “unconstitutional” and said her organization will continue to try to find a more viable solution for members.

Novick’s plan requires an appeals process that must be instituted by Aug. 1, a month before the tax on trucks is slated to be levied. The tax also would run four years before requiring City Council renewal.

If the gas-tax hike is rejected by Portland voters May 17, Jarvis said the trucking group might sue for trucks being singled out to pay to fix the city’s roads. But even if the gas-tax hike is approved, it might still seek legal action, she said.

Robert Pitcher, vice president of state laws for American Trucking Associations, said Portland’s plan presents serious legal issues.

“This is the only operating tax [proposed] by a city that is solely on trucks,” Pitcher said. “Most glaringly, the tax is not apportioned to the carrier’s business locally. The carrier could do umpteen miles in Oregon and very little business in Portland but still owe the same amount. The next town over could presumably do the same thing, and there would be no end to it.”