Trucking Issue Costs State Millions

Saturday, November 18th 2006, 4:11 pm
By: News On 6

OKLAHOMA CITY (AP) Sanctions imposed against the state by a truck registration compact have been lifted following a major overhaul of truck registration rules and the payment of more than $30.5 million to 12 other states.

Oklahoma paid out the money to resolve a legal dispute about truck registration fees that arose from an Oklahoma Tax Commission scandal, officials said.

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.

Sanctions were lifted in September after Oklahoma agreed to forfeit the withheld money and not appeal adverse federal court decisions.

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, 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 were granted.

Oklahoma did not 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 disputed the amounts other states claimed they had lost. Oklahoma lost the legal battle in federal courts.

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 Tax Commission revised rules and processing procedures in its truck registration section in 2002, Ross said. Compact officials reviewed changes made by Oklahoma and found the state to be in 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.

The money will go to help fund state government and schools.