In the summer of 2015, legislators brought forward a bill that would allow Sound Transit to increase car tab taxes to fund a $15 billion mass-transit expansion. No cap was placed on how long the additional taxes could be collected, and the initial figure ballooned to $28 billion when Sound Transit went to the voters. In 2016, the bill passed with a 54% vote. Now, the law is being called unconstitutional.
Using Outdated Methods to Calculate the Value of Vehicles
In addition to misleading legislators about the total amount of new tax to be collected and for how long, Sound Transit also uses an outdated method to calculate car tab tax rates. The valuation formula used was approved by legislators in 1990, and many claim that using such an outdated formula does not allow for the current market rates of vehicles to be reflected.
This means that cars are valued inaccurately, often for much more than they are really worth, and this causes tax rates to go up. While Sound Transit estimated that their formula would only cause tax rates to rise by about $110 annually, last year reports suggested that the rates were falling anywhere between $90 to over $260.
What Makes the Law Unconstitutional
Senator Fortunato nails why this law is unconstitutional in a statement to Seattle Weekly, saying “The constitution has that clause to prohibit deceptive things from happening and that’s pretty much what this is. Sound Transit drafted the legislation. If they were to do this properly, the proper way to do it would’ve been to list the [motor vehicle excise tax] schedule.”
When the bill went to voters, how the tax was going to be calculated wasn’t included. Neither legislators or voters knew that an outdated schedule would be used, and many people believe this move was purposeful on Sound Transit’s part to deceive the public about how much they were really going to be collecting.
Attempts to Enforce Accurate Valuation
In both 2017 and 2018, legislators attempted to bring forward bills that would force Sound Transit to begin using updated Kelley Blue Book values for vehicles to calculate car tab tax rates. However, the bills didn’t gain enough traction. Now, Sound Transit says that changing the valuation system now would cut too much funding from important projects. However, they promised to do so by 2029, which may be too little, too late.
Albrecht Law, PLLC recently signed on to the class action lawsuit and bring their skill and track record of success to help hold Sound Transit responsible for deceptive taxation.