One point of contention in the North Carolina tax reform debate has been the fate of one particular tax expenditure—the uncapped sales tax refund for nonprofits. The refund applies to "sales of taxable tangible personal...
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- More Roadblocks for Virginia's Tax on Traffic Offenses
More Roadblocks for Virginia's Tax on Traffic Offenses
Court cases involving Virginia's new surcharges keep piling up. We wrote last week about the "civil assessment fees," which the state imposed effective July 1 to raise $65 million for state spending. Reckless drivers must pay up to $1,050, on top of pre-existing fines and fees.
We also noted that two state trial judges have already held the new charges unconstitutional for violating the federal and state Equal Protection Clauses, in that out-of-state drivers do not have to pay them, and the state could offer no rational reason for that exemption.
The reason, it turns out, lies with the multi-state compacts, where states agree to enforce each other's traffic fines and fees. Since the surcharges raise money far in excess of the cost of upkeep, regulation, and enforcement, they aren't covered by those compacts and that makes enforcement difficult. Because the purpose of the surcharges is to raise money, rather than deter behavior or recoup the cost of administration, they are more akin to taxes, not fees.
The Washington Post reports that the Arlington County General District Court is now considering a similar Equal Protection challenge filed by a U.S. Navy reservist in full dress uniform fined $1,050 for driving 75 mph on I-395. The article also provides anecdotal evidence that judges disapprove of the excessive penalties, and are amending charges and stretching circumstances to help people avoid them. But they continue to be imposed:
Upon hearing that he would have to pay the first $350 of his civil fee after being convicted of reckless driving, Samuel Ortez, 34, of Woodbridge, a truck driver and father of two from El Salvador, stared blankly for a moment outside the cashier's office, his eyes watering slightly.
"It's going to affect the bills," he said quietly in Spanish, his nephew Leo Ortez interpreting.
News outlets reported over the weekend about a pregnant woman rushing to the hospital (57 mph in a 35 mph zone), who was assessed a $100 traffic fine, plus the $1,050 civil assessment fee. She plans to appeal as well. Some legislators are considering repeal-and-refund bills, though Governor Tim Kaine (D) is advocating a wait-and-see approach. Finally, in Richmond, another lawsuit challenges the law's delegation of assessment powers to local transportation authorities.
Virginia residents seem to know taxes when they see them. For more on the difference between taxes and fees, check out our work in the Heatherly lottery case.
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