OTA Dispatch Issue 2, 2021

26 Oregon Trucking Associations, Inc. Oregon Truck Dispatch Flat Fees as Alternative Payment Mechanism for Select Weight Mile Tax Filers By Gregg Dal Ponte, OTA’s Director of Regulatory Compliance REGULATORY COMPLIANCE AS ORIGINALLY INTENDED, flat fees were provided to provide a simpler means of reporting and paying weight mile tax for motor carriers carrying certain qualifying commodities who use non-public or lesser-traveled public roads where the record keeping associated with distinguishing between miles off and on the public highway might be burdensome. The Oregon flat fee payment option originated in 1949 as a way to make road- use tax reporting easier for log haulers who regularly use non-public roads. Since many of those carriers at that time were small, single-truck operators who often made many short trips in a single day, it was considered more difficult for them to keep the records necessary to determine their taxable miles. In many instances a husband drove the log truck during the day and performed maintenance on the truck after work while his wife did the paperwork on the kitchen table after the dinner dishes were cleared away. The flat fee option was meant to ease the recordkeeping burden on those carriers. After the payment option was offered to log haulers in 1949, it was offered to sand and gravel haulers in 1969, and to wood chip haulers in 1983. The option is also available for farm trucks operating for-hire intrastate with a combined vehicle weight under 46,000 pounds, but there are no farmers paying flat fees. That description is not illustrative of all that is going on today over 70 years after the introduction of flat fees. It is important to remember that there was never any intention that the flat fee alternative was to provide a discount to motor carriers hauling qualifying commodities who opted to use the flat fee option. In fact, ORS 825.482 makes it abundantly clear that the ongoing legislative intent has always been that flat fee filers are paying as a class of taxpayers (not necessarily as individual taxpayers) what they would have paid had they reported and paid their highway use tax on a mileage and weight basis. So, simple arithmetic comes into play at this point. Larger fleets that haul eligible commodities are faced with the choice should they report and pay their weight mile tax on a mileage basis or should they elect the flat fee option? These fleets possess sufficient business acumen to be able to project the miles that their hauling operation will accumulate in the coming calendar year and compute the tax liability that they would pay if they reported weight mile tax on a mileage basis. Then, they simply compare that result to the amount of tax they would alternatively pay if they selected the flat fee option and they choose the payment option that results in the lowest tax liability for them. If in any two-year time period more fleets (or more precisely more participating trucks) have done such a comparison and opted for the lower cost option, then the established flat fee rates will no longer accomplish their calculated purpose (revenue neutrality) and necessitate a change in the rate structure to balance the equation once again. The flat fee alternative is all about averages. ODOT is not concerned about whether any one individual tax payer is