The Washington Supreme Court has rejected a constitutional challenge to state motor vehicle fuel taxes. Auto. United Trades Org. v. Washington, No. 85971-0 (Wash. 10/4/12). Plaintiffs claimed that Washington’s hazardous substance tax, as applied, violated a state constitutional requirement that revenue from all taxes “on the sale, distribution or use of motor vehicle fuel” be “placed in a special fund to be used exclusively for highway purposes.”
The tax includes petroleum as a hazardous substance and imposes “on the privilege of possession of hazardous substances in this state” a tax of 0.7 percent of the wholesale value of the substance. The tax collected under this provision must be deposited into a state toxics control account. Plaintiffs asserted that, when applied to motor fuels, this constituted “a gas tax that may not be used for anything other than highway purposes.” The court below dismissed the claims on the grounds that plaintiffs’ suit was barred because it had not been brought until 22 years after enactment of the hazardous substance tax and the tax itself did not violate the state constitution.
The Washington Supreme Court held that plaintiffs were not time barred because the doctrines of laches and reasonable time “cannot be used as affirmative defenses to bar a constitutional challenge.” Turning to that challenge, the court held that the constitution’s words were to be given their ordinary meaning. The court also noted that the constitutional section in question contains the proviso that “this section shall not be construed to include revenue from general or special taxes or excises not levied primarily for highway purposes. . . .” Holding that the proviso applied to the challenged tax, the supreme court affirmed the lower court’s determination that the hazardous substance tax was valid.