STATE OF MICHIGAN

FRANK J. KELLEY, ATTORNEY GENERAL

Opinion No. 6095

August 27, 1982

TAXATION:

Motor Carrier Fuel Tax Act--differential in license fee for Michigan trucker

The Motor Carrier Fuel Tax Act, 1980 PA 119, Sec. 5, does not unlawfully discriminate against a Michigan trucker by imposing a diesel license fee larger in amount than the diesel license fee for the operator of a diesel vehicle registered in another state.

Honorable Harry A. DeMaso

State Senator

The Capitol

Lansing, Michigan

You have requested my opinion on the following question:

The Motor Carrier Fuel Tax Act, 1980 PA 119, as amended by 1981 PA 16; MCLA 207.211 et seq; MSA 7.340(1) et seq, by requiring Michigan motor carriers to pay an additional $80.00 in license fees, in effect, levies a tax exceeding the cost of administration and regulation. Yet in order for a person to act as a motor carrier in this state, the person must be a holder of a license issued under 1980 PA 119, supra, Sec. 5, and the license must be affixed to the right hand side of the cab of the vehicle. The purchase of the license and its display to the seller of diesel fuel entitles the purchaser to a discount of 6 cents per gallon from diesel fuel tax. 1927 PA 150, Sec. 22, as last amended by 1980 PA 118; MCLA 207.122; MSA 7.316(2). In essence, the purchase of the license is the method for acquisition of the diesel motor fuel tax discount.

It should be noted that enactment of the Motor Carrier Fuel Tax Act, 1980 PA 119, supra, as tie-barred to the enactment into law of 1980 PA 118, amending, in part, 1927 PA 150, Sec. 22, supra, to grant a 6 cents per gallon diesel fuel discount, and to the enactment into law of 1980 PA 117 amending the Michigan Vehicle Code, 1949 PA 300, Sec. 801; MCLA 257.801; MSA 9.2501, exempting from the taxes imposed therein vehicles subject to the taxes imposed by 1980 PA 119, supra. In tieing the enactment of the Motor Carrier Fuel Tax Act, 1980 PA 119, Sec. 5, supra, imposing a larger annual license fee upon Michigan motor carriers than that imposed upon out-of-state motor carriers, to enactment of amendatory 1980 PA 118 amending 1927 PA 150, Sec. 22, supra, to provide for the 6 cents per gallon diesel fuel tax discount to all licensed motor carriers, the Legislature was aware that licensed Michigan motor carriers stood to receive exemption from taxes imposed by 1949 PA 300, Sec. 801, supra, in the course of making greater use of Michigan roads and highways, necessitating increased maintenance thereof.

In passing on the constitutionality of a state tax, it is necessary to focus on its practical operation without regard to its precise form or descriptive words which may be applied to it. Detroit v Murray Corp, 355 US 489, 495; 78 S Ct 458, 486; 2 L Ed 2d 441, 460 (1958), The E. F. MacDonald Co v Department of Treasury, 62 Mich App 626; 233 NW2d 678 (1975). It is further recognized that a strong presumption exists in favor of constitutionality of tax legislation, and that hostile and oppressive discrimination must be demonstrated before the presumption is defeated. American Amusement Co, Inc v Department of Treasury, 91 Mich App 573; 283 NW2d 803 (1979).

You suggest that the disparity between the two license fees may constitute unfair discrimination. In this regard, the Michigan Court of Appeals has held that legislative classifications must be based upon substantial and natural differences which reasonably suggest the propriety of different treatment. Avis Rent-A-Car System, Inc v City of Romulus, 65 Mich App 119; 237 NW2d 209 (1975), aff'd, 400 Mich 337; 254 NW2d 555 (1977). The Motor Carrier Fuel Tax Act, supra, places a license charge of $92.00 upon Michigan vehicles, while charging vehicles not registered in Michigan, $12.00. It is apparent that the legislative assumption was that Michigan-based motor vehicles have a higher rate of use of Michigan highways than do out of state vehicles which either make stops in Michigan or which merely pass through Michigan. The difference between the amount of Michigan highway use by Michigan vehicles, on the one hand, and by foreign vehicles, on the other hand, is the type of substantial difference which warrants legislative classification. On such basis, domestic truckers, who have primary access to and use of Michigan roads, pay their fair share toward the maintenance of Michigan public highways, while vehicles operating in interstate commerce and registered in other jurisdictions contribute a smaller amount under the Act, supra.

It is my opinion, therefore, that the licensing provision of the Motor Carrier Fuel Tax Act, Sec. 5(2), supra, does not unfairly discriminate against Michigan motor carriers so as to render the tax invalid.

Frank J. Kelley