For-Hire Carriers: Motor Carrier Permit is Business License Tax
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Just a reminder that a city, county, or city and county are not allowed to impose business license taxes on for-hire Motor Carriers of Property Permit holders in the State of California.
Revenue and Taxation Code Section 7233 states:
"No city, county, or city and county, shall assess, levy, or collect an excise or license tax of any kind, character, or description whatever, upon the transportation business conducted on or after the effective date of this chapter, by any for hire motor carrier of property."
Revenue and Taxation Code Section 7234 reads:
"(a) the uniform business license tax fee imposed by this chapter is in lieu of all city, county, or city and county excise or license taxes of any kind, character, or description whatever, upon the transportation business of any for hire motor carrier of property."
For over a quarter century, cities and counties have been prohibited from licensing and taxing business conducted by a for-hire carrier of property (California Public Utilities Code Sections 3401 through 4311). The Legislature readopted this prohibition in AB 1683, which was chaptered into law and effective on September 30, 1996. A uniform business license tax fee was imposed on for-hire motor carriers of property, which is administered by the Department of Motor Vehicles’ Motor Carriers of Property Permit.
A legal opinion was also proffered by Legislative Counsel on behalf of a member of the California State Legislature further clarifying this issue. This legal opinion clarifies the intent of the above cited code to prevent cities and counties from imposing business license taxes on for-hire Motor Carriers of Property Permit holders in the State of California. A copy of this opinion is attached.
For more information or if you have had a city or county attempt to collect an annual business fee, contact Heather Ward at hward@caltrux.org.
