Opinion ID: 2395330
Heading Depth: 1
Heading Rank: 3

Heading: The HU tax

Text: In her order placing the HU tax collections in escrow, the chancellor specifically found that ATA was likely to succeed because the law exempting trucks hauling certain items, Ark.Code Ann. § 27-35-205(c) (Supp.1989), appears to be inconsistent with the basic purpose of the tax. The chancellor cited Williams v. Vermont, 472 U.S. 14, 105 S.Ct. 2465, 86 L.Ed.2d 11 (1985), in which the Supreme Court held that taxpayers had stated a claim that Vermont's use tax on automobiles was in violation of the Equal Protection Clause and mentioned the fact that the tax treated taxpayers unequally on a basis which bore no relation to the statutory purpose. 472 U.S. at 24, 105 S.Ct. at 2472. As to the trip permit, the chancellor stated ATA had shown a likelihood of success in establishing that truckers based in other states purchasing the permits at $.08 per mile were, in practice, having to pay more than Arkansas based truckers for the privilege of using Arkansas highways, citing Complete Auto Transit, Inc. v. Brady, 430 U.S. 274, 97 S.Ct. 1076, 51 L.Ed.2d 326 (1977), and Larey v. Continental Southern Lines, Inc., 243 Ark. 278, 419 S.W.2d 610 (1967). In the Complete Auto case the Supreme Court upheld a Mississippi tax on the basis that it was fairly apportioned among those who had to pay it and was related to the services provided by the state. In the Larey case this court held an Arkansas fuel tax in violation of the Commerce Clause because it discriminated against interstate bus operators. The state argued the discrimination was justified, but we rejected the argument because we had nothing before us to indicate that this cost bears any relationship whatever to the resulting difference in the tax collected. 243 Ark. at 284, 419 S.W.2d at 614. The chancellor noted that the state had not demonstrated that the $.025 per mile rate was, in practice, available to interstate motor carriers whose business operations do not economically justify prequalification of any of their vehicles ... and who, consequently, must satisfy the HU tax on arriving at the state's border. Although the state is correct in arguing that the plaintiffs, ATA, bear the burden of proof, the chancellor obviously found they had presented a prima facie case that, in practice, trucks registered outside Arkansas are paying the $.08 per mile rate and Arkansas trucks are taxed at $.025. We can not say the chancellor abused her discretion in deciding, based on the authorities cited and the information before her, that the plaintiffs were likely to succeed on their claims against the HU tax.