High Court of Australia has officially ruled in favor of the electric vehicle owners against Victoria’s per kilometer road user tax on Wednesday, Drive reports.
High Court’s ruling
The High Court judged that Victoria’s distance-based charge on Zero- and Low-Emissions Vehicles (ZLEV) violates Australia’s Constitution, as only the Federal Government can impose such tax.
The Commonwealth supported the Victorian drivers Chris Vanderstock and Kath Davies’ argument that taxes on consuming goods are not exempt from the Constitution’s ban on states imposing customs and excise taxes.
Chief Justice Susan Kiefel and Justices Jacqueline Gleeson, Stephen Gageler, and Jayne Jagot sided with the plaintiffs.
According to The Guardian, the High Court now calls for Victoria to cover court costs.
“I am thrilled by today’s judgment. We hope that today’s decision paves the way for the federal government to make coherent national policy which accelerates the transition to electric vehicles.”
Plaintiff Kath Davies
Plaintiff Vanderstock also expressed his delight with the High Court’s landmark ruling.
“We believe that Victoria’s electric vehicle tax discouraged people from buying [electric vehicles], and punished existing [electric vehicle] owners who are trying to do the right thing. It was an ad hoc, piecemeal policy which undermined our collective efforts to reduce emissions from transport.”
Plaintiff Chris Vanderstock
Victoria’s road-user tax
This case began in September 2021, involving a legal dispute over which level of government had the authority to impose a tax on motorists.
Notably, Victoria was the only Australian state to have a road-user tax as it seeks to make up for the revenue lost from the fuel excise.
It asks battery electric or hydrogen vehicle drivers to pay 2.8c per kilometer they travel and 2.3c/km for plug-in hybrid vehicle owners. It exempts hybrid vehicle owners from this road user tax responsibility.
Victoria requires these drivers to provide the state government with pictures of their odometers every year. It warned that drivers’ failure to adhere to the submission may pay for driving a total of 13,500km. Worse, the state government may suspend or cancel their cars’ registration.
Victoria to refund its collected road-user taxes
In September, the Victorian Ombudsman asked the state government to return all the money it collected from motorists under the road user tax scheme.
As EV-a2z previously reported, deregistrations of ZLEVs totaled 243 units since 2021 due to the owner’s failure to pay the road-user tax per km.
“This is a landmark constitutional decision. Today’s judgment means that Victoria’s electric vehicle tax is invalid. It also sets a precedent which will likely prevent other states from implementing similar legislation.”
David Hertzberg, Senior Associate at Equity Generation Lawyers
For context, Mr. Hertzberg was the Victorian drivers’ representative in the High Court hearing.
High Court’s ruling is undoubtedly a significant win for the electric vehicle industry. It will finally put a stop to Victoria’s road-user tax scheme for clean energy vehicles. It has discouraged Victorians from buying an electric car, which impedes the shift to electric vehicles.
