Land Rover and Friends vs. Seattle

Three foreign car companies, Honda, Jaguar/Land Rover, and Volvo, have joined forces to sue the City of Seattle, hoping to recoup more than $700,000 they recently paid in business and occupation taxes. City assessments showed the automakers owed money going back to January 2003 on imported cars sold in Seattle—taxes the car companies have hired Perkins Coie to argue are unconstitutional.

Attorney Robert Mahon says the way you fight allegedly unfair city taxes is to pay them, then try to get your money back in court. So on Dec. 15, all three companies had checks hand-delivered to the city. That same day, Mahon filed suit in King County District Court to get the money back.

Mahon says applying the B&O tax to businesses that send cars into the United States for sale at a domestic dealership violates a constitutional exception from sales tax for imports and exports. A similar business sales tax rule in California was overturned by the U.S. Supreme Court in the '50s for exactly that reason, he says. "It's a little bit old," Mahon says of that judgment. "But it hasn't been overruled."

City spokeswoman Katherine Schubert-Knapp declined to comment on the specifics of the case, but according to the suit, the city claimed in earlier discussions that the tax applied because the automakers actually delivered their cars to the dealerships, as opposed to the dealerships importing the cars themselves.