Editorial: Requiem for the Oregon Tax

The state that invented the weight-distance tax has decided to dismantle its invention.

The Oregon Legislature voted July 23 to replace its 52-year-old ton-mile levy with a 29-cent diesel fuel tax and an 11-fold increase in truck registration fees. The switch, which takes effect July 1, 2000, is supposed to cost most carriers about the same as the old system.

Oregon gave birth to the ton-mile tax in 1947, so its demise was cheered by trucking, which has waged ferocious battles to kill its spawn in 17 other states.

The Oregon victory should hearten truckers in Idaho, Kentucky, New Mexico and New York, the four states with ton-mile taxes still on the books in one form or another. The New York Senate unanimously approved a plan in June to get rid of the tax there in exchange for a 50% hike in the truck registration fee.

But truckers shouldn’t park their rigs and pop open the champagne bottles just yet.

Because of strong opposition from the state’s chapter of the American Automobile Association, it took the Oregon House three votes over two days to get the job done. Shortly thereafter, AAA announced plans to convince citizens to overturn the legislation in a popular referendum. We can expect AAA to wage a vigorous campaign over the next 15 months to reverse the repeal.

On other side of the country, the possibility of a national weight-distance tax is lurking in the corridors of Congress. Sen. John Chafee (R-R.I.) is pushing a proposal for a national weight-distance tax. While trucking appears to have kept the proposal out of the tax-cut bill making its way through the Senate last week, Chafee says he plans to continue promoting the idea.

His proposal would make the federal diesel fuel tax smaller and eliminate the 12% sales tax on new trucks, the tire tax and the heavy vehicle use tax. The result, according to Chafee, would reduce the tax bill on 6 million trucks and raise it for 1.5 million others.

The legislation would be impossible to enforce, according to American Trucking Associations, which says weight-distance taxes are expensive to administer, expensive to comply with and subject to evasion.

While basking in the Oregon achievement, trucking needs to keep a close eye on Chafee’s bill in Washington, D.C.