The Car and Truck Fleet and Leasing Management Magazine

TRALA Fights for Michigan Lessor/Lessee Fuel Tax Liability Reform

May 23, 2006

ALEXANDRIA, VA – Legislation requested by TRALA that would repeal a Michigan law holding a truck lessor jointly and severally liable for a lessee’s unpaid fuel taxes was introduced on May 4. The legislation, House Bill 6031, was introduced by Rep. Kevin Green (R-Kent County). HB 6031 is aimed at reconciling conflicting laws on the books in Michigan. Upon Michigan’s entry into the International Fuel Tax Agreement (IFTA) in 1994, the state law that held truck lessors jointly and severally liable when a lease customer defaults on their fuel tax obligations was no longer enforced. Michigan’s IFTA enabling legislation passed that year includes language stating, “If the provisions set forth in that agreement [IFTA] are different from this act [Michigan Motor Carrier Fuel Tax Act], the provisions of the IFTA agreement shall control.” The existence of these conflicting laws resulted in an assessment by the Michigan Treasury Department against a TRALA company for fuel taxes unpaid by its customer. According to TRALA, the passage of HB 6031 will ensure that other truck leasing companies are not faced with similar tax liability when customers fail to meet their contractual obligations. For more information contact TRALA’s John Lynch at (703) 299-9120 or
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