The "Prius Penalty" Lawsuit
This site documents my efforts to end Georgia's war against hybrid electric vehicles -- by lawsuit, if necessary. Illuminated here is its $200/year forever "Alternative Fuel Fee" (a tax by any other name) imposed on all hybrid-electric (hence, all Prius) and all-electric cars in Georgia.
Here's the fee (my tag renewal invoice), which the State decided to impose in 2015, just months after I bought my 2014 Toyota Prius C hybrid-electric car. Some might say "good," because efficient small cars use less gas so their owners pay less gas tax, and this fee "evens up the score."
That's demonstrably flawed reasoning, as will be explained. Then I'll detail the sheer lunacy (and cynical back-room dealing) that the state legislature employed to produce this result. Finally, even though (also as detailed below) Georgia's tax collector, the Georgia Department of Revenue (DOR), has halted collection of this fee, the statute enabling it remains on the books and the DOR can change its collection policy back whenever it wants, so the enabling statute must be repealed.
To grasp the surface (but flawed) rationale behind the $200 fee (tax), stop and think about the sales tax you pay on your power bill each month (here's mine showing $6.07 sales tax). Now consider if your neighbor buys a more efficient heating/cooling system, increases his home's insulation, and thus reduces his power consumption. Would you think it unfair if he uses less power and thus pays less sales tax? Would you reason that, since others must now pay more in sales taxes, he should pay some sort of special fee (tax) to make up for it?
Same question if you're a Georgia Power rate-payer. Doesn't Georgia Power ultimately have to raise the rates to compensate for lost revenue from those who consume less power? And when Georgia Power raises your rate accordingly, do you complain if you're a high-consumption customer, paying more than your greenie neighbor?
No. Nor have you ever even thought about complaining if your neighbor pays less for his power, and thus less sales tax on his lower power bill and monthly gasoline "bill" than you do. You know why. Because we long ago decided that those who consume less are virtuous -- they generate less pollution, conserve energy, lessen dependence on foreign oil, etc. Our air is thus cleaner and less of the earth must be disturbed or risked for the sake of brown (coal, nukes, oil, nat-gas) power.
Indeed, even Georgia Power incentivizes "energy greenies" with its energy-star rebate program, its Time of Use Rates, and other, use-less-power incentives (click here for more).
Logically, then, you must feel the same about high-mileage, low-pollution cars, if not all-electric, hybrid-electric and Alternative Fuel Cars. You appreciate that those who invest in them: (a) lower America's dependence on foreign oil; (b) cause less air pollution; (c) generate less wear and tear on our roadways compared to larger, heavier, lower-mpg vehicles; and (d) economically stimulate a virtuous research and development cycle (Toyota uses some of its Prius profits to R&D even more fuel-efficient power trains). Such "Greenies" also expose themselves to higher risk (my Toyota Prius C can be easily crushed by one of those drunken, GM Mastodon SUVs that pass me on my way to work each day).
Hence, many if not most of us cheer those who pay more for higher-efficiency homes and vehicles. Your state and federal government has effectively done so via tax credits and other incentives. This multi-state site actively claims that states promote hybrid and all-electric vehicles. This, too.
And for a while, Georgia did. Through tax incentives and other governmental policies, Georgia urged its citizens to use less energy and emit less pollution by holding sales-tax-free holidays to buy efficient appliances; by according tax credits to those who purchased solar power systems (here's mine), geothermal sytems and low- or alternative-fuel usage vehicles.
But now it's reversed course. Its 2015 legislation (HB170) promulgated a $200 annual "fee" (tax by any other name) on all electric and hybrid gas-electric cars (hence, Toyota Prius hybrids, which are high-mpg and satisfy super-ultra-low-emissions, or SULEV, requirements). I call it the "Prius Penalty" tax, which is precisely what it is (laughably, the State calls it a "fee").
I found out about this on June 20, 2015, when I received, from the Chatham County, Georgia,Tag Renewal office (the GA DOR authorizes county tag offices to collect its fees/taxes), my tag renewal invoice demanding a $200 "Alternative Fuel Fee." The invoice was accompanied by this insert. That $200 tax is not mentioned here.
Here's a comment from an EV website that sums up what I surmise to be the typical reaction:
June 20, 2015 at 8:07 pm
I am really angry about this. My car, a hybrid was never eligible for a tax credit. Now I have to pay $200 a year for a car that gets driven less than 9k miles annually and is mainly GAS powered? This is outrageous. Selling the EV and buying gas vehicle. State of Georgia and Fulton County are worst govt’s in the country. Can’t wait for kids to graduate so I can leave this inept incompetent and corrupt place!
This new tax is consistent with the State's other reverse-course on pro-environment vehicles (that site explains the end of the State's tax credits for alternative fuel vehicles).
Georgia is thus now discouraging fuel efficiency by taxing all electric and hybrid-electric owners $200/year, forever. It also covers all-electric cars, as this pre-passage column forecast.
Georgia's anti-green policy change occurred just months after I bought my new 2014 Toyota Prius C hybrid. Notably, the State and its DOR singled that (hybrid-electric and all-electric) vehicle class out and permanently damaged its market value by increasing its annual carrying cost.
Here's the legislative path the state's politicians took: O.C.G.A. § 40-2-151 specifies the annual passenger vehicle registration fee and, before HB170 was passed, that fee was $20/year for private passenger vehicles. HB170 sneaks the $200 fee onto hybrid electric cars by directing the reader to the definition used in another statute, one that deals with enabling car owners to get an "Alternative Fuel" license plate so you can ride, passengerless, in HOV lanes:
(ii) “Alternative fueled vehicle” means:
(I) Any vehicle fueled by alternative fuel, as defined in division (i) of this subparagraph; or
(II) A hybrid vehicle, which means a motor vehicle which draws propulsion energy from onboard sources of stored energy which include an internal combustion or heat engine using combustible fuel and a rechargeable energy storage system; and, in the case of a passenger automobile or light truck, means for any 2000 and later model, a vehicle which has received a certificate of conformity under the Clean Air Act, 42 U.S.C. Section 7401, et seq., and meets or exceeds the equivalent qualifying California low-emission vehicle standard under Section 243(e)(2) of the Clean Air Act, 42 U.S.C. Section 7583(c)(2), for that make and model year or, for any 2004 and later model, a vehicle which has received a certificate that such vehicle meets or exceeds the Bin 5 Tier II emission level established in regulations prescribed by the administrator of the Environmental Protection Agency under Section 202(i) of the Clean Air Act, 42 U.S.C. Section 7521(i), for that make and model year vehicle and which achieves a composite label fuel economy greater than or equal to 1.5 times the Model Year 2002 EPA composite class average for the same vehicle class and which is made by a manufacturer.
O.C.G.A. § 40-2-86.1(l)(7)(B)(ii)(II).
Section 3-2 of the new "Prius Penalty" statute, HB170, says it amends O.C.G.A. § 40-2-151 (the annual registration fee statute) to increase the annual registration fee from $20 to $200 for "alternative fueled vehicles."
In doing so, it refers you back to O.C.G.A. § 40-2-86.1(l)(7)(B)(ii)(II)'s definition -- just to bring hybrid-electric cars within its reach. Specifically, HB170 Section 3-2 says: "As used in this paragraph, the term ‘alternative fueled vehicle’ shall have the same meaning as in division (l)(7)(B)(ii) of Code Section 40–2–86.1[.]" Again, that statute says
(I) Any vehicle fueled by alternative fuel, as defined in division (i) of this subparagraph; or
(II) A hybrid vehicle . . .
Yet, HB170 exempts natural gas and LPG vehicles: "provided, however, that the fees in this paragraph shall not be assessed on vehicles which operate primarily on compressed natural gas, liquefied natural gas, or liquefied petroleum gas."
Thus, Georgia is now arbitrarily exempting vehicles that would otherwise fit the new "Alternative Fuel" fee (surcharge tax) statute, while going out of its way to tax ($200 extra "fee") hybrids like my Prius. And the sneaky politicians didn't even have the intellectual integrity to insert the hybrid-electric-grabbing language into HB170. Instead, they make you go to another statute to find that out (rope-a-dope tactic to confuse the press and delay detection by the public until after the legislature session?).
To that end, the DOR's insert says the $200 fee doesn't apply to "flex fuel" and "fuel mixture" (e.g., propane- and natural-gas) vehicles but it does apply to all hybrid electrics.
Sheer, pick-and-choose, hypocritical politics, eh? Those behind the nat-gas vehicle trade must have gotten their lobbyists in the right place at the right time on that, while Toyota and other electric/hybrid-electric makers evidently fell asleep at the lobbying switch.
Focus here on how sleazy and duplicitous that is. First, read this from the DOR's tax credit site explaining that hybrid car owners can not claim Georgia's now expired (on 7/1/15) green energy tax credit since they do not run solely on alternative fuels:
*"Solely by alternative fuels” means a vehicle that is capable of running ONLY on alternative fuel. A vehicle that is capable of operating on gasoline or diesel does not qualify for the tax credit."
Catch that? The State's tax credit site, qualifying who may reap the State's now-vanishing tax credit, goes out of its way to explain that my Toyota Prius C hybrid electric does NOT qualify because it is capable of operating on gasoline.
So, any vehicle that is merely capable of operating on gasoline is not an alternative fuel vehicle.
Yet, the DOR's own Tag renewal invoice insert, purporting to apply that statute (HB170), says my Toyota Prius C is an Alternative Fuel Vehicle.
Sheer madness.
Look at it again: The $200 tax statute specifies that it is limited to "Alternative Fuel" vehicles. The DOR knows that my Toyota Prius is not an Alternative Fuel vehicle. It even says so on its page purporting to explain the tax-credit statute -- as part of its effort to deny the credit to "mere" hybrid owners. Yet, in blatant bad faith, Georgia is now insisting (through its DOR's insert) that, for the purpose of taxing me that $200 "fee," my Toyota Prius in fact is an "Alternative Fuel" vehicle.
That constitutes the essence of bad faith. I communicated this in a June 21, 2015 online message at the DOR's website. The DOR's blatant contradiction, made for the purpose of extracting money from Georgia's citizens, constitutes hypocrisy so blatant that when I went to pay my $200 Fee on June 23, 2015, four kindly ladies at the Chatham County Tag Renewal office studied my fee invoice and, on their own, decided it made no sense (unless I wanted a special, Alternative Vehicle license plate to ride Atlanta's HOV lanes, which I didn't) and thus declined to charge me that extra $200 fee!
So much blow-back must have occurred that in a late June, 2015 (undated) policy bulletin, the state's DOR announced it was mistaken, and that the new fee (tax) does not apply to hybrid-electric cars. See also this June 25, 2015 article explaining the policy turn (yeah, it's undated, but I'd like to think the DOR was reacting to my online message). Money quote: "The fees do not apply to hybrid electric vehicles that are not plug-in hybrid-electric vehicles and such vehicles do not qualify for the alternative fuel vehicle license plate."
The problem? That's just a "policy bulletin," not the law, and bureaucrats can change their mind and stick you with the fee at any time in the future, so long as HB170 remains on the books. To "get real" about this, the statute itself (which is otherwise clear, and it covers hybrid-electrics) must be repealed or judicially invalidated, and Georgia must resume its pro-environmental position.
By the way, don't let the DOR's lawyer who wrote that "bulletin" fool you. He or she (in crafting the "policy bulletin") obviously felt a need to ignore the statute's plain wording (it impose a $200 forever tax on all hybrid-electrics, in addition to all-electrics), and thus came up with this interpretation: "The fees apply to plug-in hybrid-electric or flex fuel vehicles (such as E-85) only if those vehicles have elected an alternative fuel vehicle license plate." Id. That's bull. There is no such linkage in HB170. It flat-out imposes a $200 fee and simply borrows the "Alternative Fuel Vehicle" definition from the "alternative fuel vehicle license plate" statute.
It does not say hey, only if you want that plate do you have to pay the new, $200 fee.
Thus, I am (until HB170 is repealed on this component) subject to a "policy change" at any time in the future, and this "Prius Penalty" stigma negatively impacts the value of my Prius (downwind buyers buy it with the risk that its annual operating cost at any time can suffer a $200 bump-up). And remember, the policy has not changed for all-electric vehicles; those owners are still being punished for their environmental efforts.
Finally, take note of the legislators and governor who produced HB170, which still goes after all-electric vehicles. Why? Shouldn't it always be the government's policy to reward, rather than punish, those who consume and pollute less? Isn't that what we're teaching our kids?
To the politicians: Just raise the damn gas tax if you need more money, don't sluff your tax increases under cover of gotch-ya "fees" here and there, especially on virtuous consumers. Politicians who hide (and mis-design) tax increases are just plain cowards. We want sensible taxing/spending and 100% transparency, OK?
STORED RESEARCH:
States have always had the power to tax a particular taxpayer, but not in a discriminatory manner. Comptroller of Treasury of Maryland v. Wynne, ___ U.S. ___, 135 S.Ct. 1787, 1798-99 (2015). Wynne focused on a state’s tax that has a discriminatory effect on interstate commerce, so it’s not on-point with this case, but it is a useful source for litigants formulating a litigation strategy to judicially invalidate irrational taxation -- precisely what’s going on with HB170.
Wynne, in a nutshell: "Maryland imposed an income tax upon its own residents in two parts: a 'state' income tax, and a 'county' income tax. Both were state taxes. If Maryland residents paid income tax to another jurisdiction for income earned in another state, Maryland allowed its residents a credit against the state tax but not the county tax. As a result, part of the income that a Maryland resident earned outside the state might be taxed twice. Nonresidents who earned income from sources within Maryland had to pay the state income tax, and nonresidents not subject to the county tax had to pay a 'special nonresident tax' in lieu of the county tax." 33 No. 7 Fletcher Corp Law Adviser NL 2 (July 2015). Wynne struck down that Maryland state tax scheme because it discriminated in favor of intrastate over interstate economic activity. Id.
Georgia's Bad faith litigation sanction under O.C.G.A. § 9-15-14.
O.C.G.A. § 9-15-14, does not exempt Politicians and their Bureaucrats (Pol-Crats).
If a state knowingly and deliberately misapplies its law to extinguish a right without due process, a federal civil rights claim under Logan v. Zimmeran Brush Co., 455 U.S. 422, 102 S.Ct. 1148 (1982) can be brought in state or federal court to remedy that.
State officials who act under color of state law to extinguish a property right without due process can be sued for compensatory and punitive damages under 42 U.S.C. § 1983. See Logan v. Zimmeran Brush Co., 455 U.S. 422, 102 S.Ct. 1148 (1982).