Could Kentucky enforce its extra fuel tax on heavy interstate trucks after September 1996?

Plain-English summary

In 1995, Kentucky's Attorney General examined an additional two-cent-per-gallon fuel use tax imposed on motor carriers operating vehicles with a combined license weight above 59,999 pounds. He concluded that Kentucky could not enforce the tax or its reporting requirements after September 30, 1996. A federal statute allowed states to enforce fuel use tax payment and reporting rules after that date only if they conformed to the International Fuel Tax Agreement (IFTA).

The mismatch was the vehicle category. IFTA's quoted definition covered vehicles with two axles over 26,000 pounds, vehicles with three or more axles regardless of weight, and combinations over 26,000 pounds. Kentucky's separate category for vehicles above 59,999 pounds could not be administered through IFTA's shared system, the AG reasoned. He also said the federal statute did not require a state to join IFTA; it restricted enforcement of a nonconforming fuel use tax.

Currency note

This opinion was issued in 1995. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Historical summary

Interstate motor carriers

The opinion treated Kentucky's extra tax on vehicles above 59,999 pounds as preempted after the federal deadline. The AG's conclusion also covered the reporting requirements attached to that tax. He did not decide the status of every Kentucky fuel tax.

State tax administrators

The AG explained that IFTA used one base state to collect and proportionally share fuel use taxes among states where a commercial vehicle operated. A special weight category outside IFTA's qualified-vehicle definition could not be administered by other member states under that system.

Common questions

Why did the AG say Kentucky's heavy-truck fuel tax conflicted with federal law?

Kentucky taxed vehicles above 59,999 pounds under KRS 138.6601. IFTA used different categories of qualified motor vehicles. The AG concluded that other member states could not collect Kentucky's separate tax through IFTA, so the tax did not conform to the agreement as federal law required.

Did federal law require Kentucky to join IFTA?

No. The opinion expressly said the federal statute did not require any state to join. It did forbid enforcement of a fuel use tax that did not conform to IFTA after the stated date.

Did the opinion invalidate all fuel taxes on trucks?

No. Its conclusion concerned the additional tax imposed by KRS 138.6601 on vehicles above 59,999 pounds and that statute's reporting requirements. The opinion did not analyze every fuel tax Kentucky imposed.

Background and statutory framework

The opinion quoted a federal statute that conditioned state fuel use tax reporting and payment laws on conformity with IFTA after September 30, 1996. It compared IFTA's qualified-vehicle categories with KRS 138.6601's heavier-vehicle category and concluded that the mismatch made the Kentucky tax unenforceable under federal preemption principles.

Citations and references

• KRS 138.6601: the additional Kentucky fuel use tax examined by the AG.
• Straight Creek Bus v Saylor, 299 Ky 309, 185 SW2d 253 (1945): quoted on federal supremacy over conflicting state law.
• Commonwealth ex rel Cowan v Telcom Directories, Ky, 806 SW2d 638, 640 (1991): cited for the requirement of clear congressional intent to preempt state law.

Source

• Landing page: https://www.ag.ky.gov/Resources/Opinions/Opinions/OAG95-033.htm

Original opinion text

OAG 95-33

August 25, 1995

Subject: International Fuel Tax Agreement

Written by: Ross T. Carter

Requested by: Don C. Kelly

Syllabus: Because the fuel tax established in KRS 138.6601 conflicts with the International Fuel Tax Agreement, the tax is preempted by federal law after September 30, 1996

OAGs cited: None

Statutes construed: KRS 138.6601

Opinion of theAttorney General

We have been asked whether 49 USC 31705 preempts KRS 138.6601. It does.

The federal statute says:

31705. Fuel use tax

(a) Reporting requirements.—After September 30, 1996, a State may establish, maintain, or enforce a law or regulation that has a fuel use tax reporting requirement (including any tax reporting form) only if the requirement conforms with the International Fuel Tax Agreement.

(b) Payment.—After September 30, 1996, a State may establish, maintain, or enforce a law or regulation that provides for the payment of a fuel use tax only if the law or regulation conforms with the International Fuel Tax Agreement as it applies to the collection of a fuel use tax by a single base State and proportional sharing of fuel use taxes charged among the States where a commercial motor vehicle is operated.

The International Fuel Tax Agreement is defined in 49 USC 31701(3) as “the interstate agreement on collecting and distributing fuel use taxes paid by motor carriers, developed under the auspices of the National Governors' Association.”

IFTA is managed by International Fuel Tax Association, Inc. States and provinces may become members of the association and participate in the cooperative administration of fuel use tax laws. IFTA eases the administrative burden of governments that collect tax from multistate operators, and it allows operators to deal with a single taxing jurisdiction. Obviously, such a cooperative undertaking can operate efficiently only if all participating states and provinces impose fuel use taxes that operate in substantially the same way. Therefore IFTA imposes various requirements on its members in order to maintain a consistent set of tax procedures throughout all taxing jurisdictions.

Membership and administration are governed by the association's Articles of Agreement and the Procedures Manual. In general, members may impose fuel use taxes only on “qualified motor vehicles.” Section II.K. of the Articles of Agreement says:

“Qualified motor vehicle” means a motor vehicle used, designed, or maintained for transportation of persons and property and:

1. Having two axles and a gross vehicle weight or registered gross vehicle weight exceeding 26,000 pounds or 11,797 kilograms; or

2. Having three or more axles regardless of weight; or

3. Is used in combination, when the weight of such combination exceeds 26,000 pounds or 11,797 kilograms gross vehicle or registered gross vehicle weight. “Qualified motor vehicle” does not include recreational vehicles.

Various other provisions of the Articles of Agreement make it clear that the fuel use tax reporting and collection system operated under IFTA applies only to “qualified motor vehicles.” A classification of motor vehicles on any basis other than the three criteria set out above does not comport with the agreement, and a tax based on such a classification would not be collectible through IFTA.

KRS 138.6601(1) says:

In addition to any other taxes, every motor carrier operating a motor vehicle in this state with a combined license weight in excess of fifty-nine thousand nine hundred ninety-nine (59,999) pounds, shall pay two cents (2�) per gallon on the amount of gasoline or special fuels used in its operation on the public highways of this state.

This statute imposes a fuel use tax on a classification of vehicles other than the classification of “qualified motor vehicles” designated under IFTA. This tax could not be administered by other member states because other states do not have a separate classification for vehicles that weigh more than 59,999 pounds. The tax is therefore not in conformity with IFTA.

“[S]ince the Federal Constitution is the supreme law of the land, a Federal enactment authorized by that instrument prevails over a state statute and suspends the operation of the latter when its enforcement would necessitate or sanction the performance of an act prohibited by the former.” Straight Creek Bus v Saylor, 299 Ky 309, 185 SW2d 253 (1945). Preemption of a state law occurs when Congress expresses a clear intent to preempt state law. Commonwealth ex rel Cowan v Telcom Directories, Ky, 806 SW2d 638, 640 (1991). We believe that Congress expressed a clear intent to preempt state law by providing that a state may impose fuel tax reporting and collection requirements only if the requirements are in conformity with IFTA. A state law that is not in conformity with IFTA is preempted.

The federal statute quoted above does not require any state to join IFTA, but it does forbid any state to enforce a fuel use tax that does not conform with IFTA. Because KRS 138.6601 does not conform with the IFTA definition of qualified motor vehicle, the Kentucky statute is preempted and Kentucky may not enforce the statute or any of the statute's reporting requirements after September 30, 1996.

Chris Gorman

Attorney General

Ross T. Carter

Division of Civil and Environmental Law

Manager of the Opinions Branch