Yes, there is snow falling outside. But still, government, taxes, and that economic storm we heard so much about until last night's "thundersnow" (does anyone else think the National Weather Service's description of our storm sounds like a 1980's kids cartoon?) haven't gone anywhere, so a little non-weather news.
Three foreign car companies, Honda, Jaguar/Land Rover, and Volvo joined forces to sue the City of Seattle hoping to recoup over $700,000 they paid in business and occupation taxes. The city sent notices to the dealerships, starting in August of this year after doing assessments showing they owed money going back to January 2003 on cars that were imported by Seattle dealerships and sold in the city. So the three car makers, from Japan, Britain, and Sweden hired mega-firm Perkins Coie to fight the tax bills.
Attorney Robert Mahon says the way you fight city taxes you believe are unfair is to pay them, then try to get your money back in court. On Dec. 15, all three 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 fifties for exactly that reason, he says. "It's a little bit old," Mahon adds, "but it hasn't been overruled."
In these tough financial times (in November, the city revised down its expected 2009-2010 revenue by about $18 million) local governments need all the money they can get. 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 with the automaker that the tax applied because the automakers actually delivered their cars to the dealerships--the dealerships didn't import the cars themselves.