Publication 216, The First 100 Years


The Motor Vehicle Transportation License Tax

Another 1933 tax was initiated with the enactment of the Motor Vehicle Transportation License Tax. This legislation was actually a sequel to the Motor Vehicle Transportation License Tax of 1923. The 1923 tax had been repealed and replaced by a “weight tax” in 1928. When this tax also proved to be inequitable, both the Board of Equalization and the 1929 Tax Commission recommended that equity be achieved by an increase in gross weight and mileage taxes, but the advocates of the gross receipts tax drastically modified a 1933 bill which would have substantially complied with the Board‘s recommendation.81

The resulting legislation was the Motor Vehicle Transportation License Tax Act approved on May 15, 1933. Under the new act “. . . the operators of a motor vehicle which transported persons or freight for hire must be licensed by the State Board of Equalization and must pay the State Controller a tax equal to three percent of the gross receipts from this business.” 82 Since most companies transporting passengers were classified as public utilities and were already paying a gross receipts tax under Constitutional Amendment Number One, the new act was, practically speaking, a tax on commercial trucking businesses. Thus, the tax became popularly referred to as the “truck tax.” The general administration of this tax was vested in the Board, which enforced the law generally, licensed the operators, assessed the tax, verified the returns, and accounted to the State Controller with the returns and remittances transmitted to the Board. The Controller collected delinquencies, maintained a record of payments, and performed various functions including the issuance of special registration emblems for vehicles subject to the tax.

This tax proved to be inequitable because companies which operated their own fleets of trucks to transport their own goods over public highways and firms whose trucks hauled for hire entirely within city limits were exempt from the tax. Furthermore, the costs of administering this tax were excessive in relation to its revenues which never exceeded $30,000,000 in any year. Despite repeated recommendations by Board that this tax be repealed, the Legislature did not do so until 1973.

81 Stockwell, op. cit., p. 106

82 lbid.