Oklahoma Supreme Court rules automobile sales tax is constitutional

The Oklahoma Capitol, in the early morning, on the last day of the regular legislative session on May 26, 2017 (Phil Cross KOKH)

The Oklahoma Supreme Court has ruled an automobile sales tax bill passed by the legislature is constitutional

In a decision issued August 31, the Supreme Court ruled 5-4 that HB 2433 was constitutional. The Oklahoma Automobile Dealers Association brought the suit against the state saying that the bill was a revenue raising measure and passed unconstitutionally by the Oklahoma Legislature during the final five days of the session when revenue bills are not allowed to be passed.

The court argued that the bill just eliminated an exemption and was not the same as creating a new tax. HB 2433 removes an exemption on the automobile sales tax at 1.25 percent. Lawmakers estimate it will raise $100 million in the first year.

Senate President Pro Tem Mike Schulz was pleased by the decision.

“As the Senate has maintained, this measure is constitutional and it’s gratifying to know that the Oklahoma Supreme Court agrees. With the decision finalized, we now know the full extent of the revenue picture that needs to be addressed during a potential special session.” Schulz said. “The Senate will continue to work closely with the Governor and the House to finalize a plan to make up the $215 million in revenue lost in an earlier court decision.”

House Speaker Charles McCall’s office said he would not be commenting on the decision Thursday.

The Supreme Court earlier ruled that a fee raising the cigarette tax was unconstitutional, leaving a $215 million hole in the state budget.

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