Request By:
Mr. David N. Bloesing
City Administrator
City of Ludlow
227 Elm Street
Ludlow, Kentucky 41016
Opinion
Opinion By: David L. Armstrong, Attorney General; Walter C. Herdman, Asst. Deputy Attorney General
This is in response to your letter of January 30 in which you raise the question as to the authority of the city to require motor vehicles operating in interstate commerce to purchase and display a city license sticker and enclose a copy of the applicable ordinance.
The Kentucky Court of Appeals has held in the case of City of Newport v. Merkel Bros. Co., 156 Ky. 580, 181 S.W. 549 (1913) that an ordinance imposing a license tax upon persons operating vehicles upon the city streets was invalid as to a nonresident operating such trucks in interstate commerce who had complied with the provisions of KRS 281.835, which under reciprocity, exempts from license tax in this state nonresidents who comply with valid domiciliary laws requiring licensing, registration and numbering of vehicles in their own state. See also the case of Reeves v. Deisenroth, 288 Ky. 724, 157 S.W.2d 331 (1941) and KRS 281.610. Note the distinction drawn in the Reeves case, supra and the case of City of Newport, supra.
Aside from the above reciprocal exemption provisions, if the trucks have been issued a common carrier or contract carrier license in this state, they are also exempt from any license tax imposed by a city under Chapter 281 of KRS, particularly KRS 281.830(2). Under such circumstances the Court of Appeals has construed the above section as preventing a city from imposing a license tax on trucks loading and unloading within the city, in the case of Pineville v. Meeks, 254 Ky. 167, 71 S.W.2d 33 (1934) and Meeks Motor Freight, Inc., v. Ballard, 283 Ky.404, 141 S.W.2d 569 (1940) and Reeves v. Coldway Carriers, 240 S.W.2d 47 (1951). See also City of Russell v. Fannin, 296 Ky. 236, 176 S.W.2d 384 (1943) relating to taxing of interstate trucks passing through the city.
Where no reciprocity exemptions exist and KRS 281.830(2) is not involved, we next refer you to the case of Sprout v. South Bend, 277 U.S. 250, 72 L. Ed. 833, 48 S. Ct. 502, and Annotations under 52 A.L.R. 533, 155 A.L.R. 1105, wherein it is stated that a state and municipality, when authorized by the laws of the state, may impose a license fee or tax upon motor vehicles engaged exclusively in interstate commerce where the tax is nondiscriminatory and is imposed for road usage and further, where the amount of the tax does not exceed fair compensation to the state or city. Along this line, the Court of Appeals of Kentucky in the case of Cordell v. Commonwealth, 254 S.W.2d 484 (1953) for Use and Benefit of the City of Prestonsburg, stated as follows:
"It is now becoming generally recognized that one engaged in interstate commerce is not always exempt from local taxation, and the right of a state or municipality to regulate interstate transactions in the exercise of its general police power has always been recognized. It is only undue or discriminatory burdens upon commerce which are forbidden. Although interstate commerce must pay its way, a state or municipality, consistently with the commerce clause, cannot put a barrier around its borders to bar trade from other States."
The license fee of $200 per year or $10 per day in the Cordell case was declared to be unreasonable and, therefore, invalid. On the other hand, the license fee maximum of $25 per year for two and one-half ton trucks appears to be reasonable and enforceable against motor vehicles operating in interstate commerce. However, this question would ultimately be for the courts to decide.