The changes come in response to AB5, which makes it more difficult for employers to classify workers as independent contractors.
International Limousine contested a tax on trips made across state lines on the basis of a federal preemption that bars states from taxing the interstate transportation of passengers. The D.C. Office of Tax and Revenue argued the tax should apply to trips made to area airports. Judge Christian, writing for the D.C. Superior Court Tax Division, held the federal statute “acts as an absolute bar on the (District of Columbia's) authority to tax...transportation of passengers in interstate commerce.”
The District of Columbia at first noted its appeal of this decision, but, upon further review, withdrew its appeal and conceded victory to International Limousine. The court's decision ends years of unfairly imposed taxes upon ground transportation of passengers to airports such as Reagan National, Dulles International, and Thurgood Marshall Baltimore-Washington International airports. In addition, transportation firms might be able to seek refunds for prior years in which the District of Columbia improperly imposed those taxes. The implications for the industry and for the District are considerable.
Because of International Limousine's success against the District of Columbia, other local governments nationwide will be less likely to try to improperly tax interstate transportation of passengers.
Richard Kane, President and CEO of International Limousine, said in a press release, “This is a positive result, not only for International Limo, but for all passenger transportation operators in D.C. and around the nation. We would not have reached this successful outcome without [attorney] Manesh [Rath] — his diligence and dedication to his clients' interests make him a valued part of any team.”
The industry owes great gratitude to International Limousine for this result," said Rath, an attorney with Keller and Heckman LLP who also advises the National Limousine Association. “Improvements in the law, and how agencies enforce those laws, can only occur because of conscientious businesses like International Limo.”
About The Litigants
International Limousine Service, Inc. has been a leader in the industry and one of the most widely respected ground passenger transportation firms for almost 50 years. International Limousine was the winner of the 2009 Operator of the Year Award by LCT Magazine. Kane served as President of the National Limousine Association from 2008-2009.
Keller and Heckman LLP's nationally-recognized litigation attorneys represent clients' interests before federal and state courts, and regulatory agencies. Keller and Heckman was founded in 1962 and serves clients from its offices in Washington, D.C., Brussels, San Francisco, Shanghai, and Paris.
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