Trucking issue costs state millions
NewsOK.com, November 18, 2006
By Randy Ellis
See related Grand Jury report
Oklahoma has paid 12 other states more than $30.5 million to resolve a legal
dispute about truck registration fees that arose from an Oklahoma Tax Commission
scandal, officials confirmed Friday.
Oklahoma didn't have to write checks to make the payments because the other states
began withholding money from Oklahoma in January 2003 under sanctions imposed by the
governing board of an international truck registration compact, said Paula Ross,
spokeswoman for the state Tax Commission.
The sanctions were lifted in September of this year after Oklahoma agreed to forfeit
the money that had been withheld and not appeal adverse federal court decisions.
The dispute arose because of the corrupt actions of former Oklahoma Tax Commission
employees and truck registration agents.
Oklahoma participates in a compact with other states and Canadian provinces that
allows truck drivers to register in just one state although they travel in many.
Registration revenue is divided among the various states and provinces based on
the distance the truck is expected to travel in each jurisdiction and the tax rate
of each jurisdiction.
For years, corrupt Oklahoma Tax Commission employees allowed truck registration
agents to use false projections to make it appear as if more miles would be
traveled in low-cost states and less miles in high-cost states to lessen tax bills.
Private trucking agents gave kickbacks to Tax Commission employees for favors they
Oklahoma didn't dispute that skewed mileage projections were used. Attorney
General Drew Edmondson successfully prosecuted more than a dozen former
Tax Commission employees and truck registration agents for fraud.
However, Oklahoma did dispute the amounts other states claimed they had lost.
Oklahoma lost the legal battle in Oklahoma City federal district court and
the 10th U.S. Circuit Court of Appeals before deciding not to contest the matter further.
The biggest winners in the dispute were Illinois, which received more than
$6.6 million from Oklahoma, and California, which received more than $5.6 million.
The Oklahoma Tax Commission did a major overhaul of rules and processing procedures
in its truck registration section in the fall of 2002, Ross said. Compact officials
reviewed changes made by Oklahoma and found the state to be in full compliance
with the compact's requirements in November 2003.
Since that time, Oklahoma has "maintained a solid working relationship" with
representatives of the other states, Ross said.
Oklahoma received about $11.9 million in out-of-state income from truck
registrations in fiscal year 2006, she said. That amount should increase
now that sanctions have been lifted.
Oklahoma had to pay 12 other states $30,570,238 to end litigation about
truck registration fees that arose from an Oklahoma Tax Commission scandal.
Following is a list of the money allotted to each state:
• Alabama, $346,401.
• California, $5,635,767.
• Colorado, $2,561,351.
• Illinois, $6,608,840.
• Indiana, $4,332,404.
• Iowa, $1,363,686.
• Kansas, $1,609,253.
• Michigan, $1,486,940.
• Minnesota, $280,529.
• Missouri, $4,940,314.
• Nebraska, $739,918.
• Nevada, $664,835.