Lancer Leader Ally
Wednesday, August 17, 2022

Manesh Rath Partner at Keller and Heckman Washington, D.C. — On March 30, International Limousine Service’s won a major victory in a landmark decision by the D.C. Superior Court when the District of Columbia Office of Tax Revenue withdrew its appeal that was issued on October 27, 2016.

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 that the tax should apply to trips made to area airports. Judge Erik Christian, writing for the D.C. Superior Court Tax Division, held that the federal statute “acts as an absolute bar on the (District of Columbia’s) authority to tax … transportation of passengers in interstate commerce.”

The court’s decision puts an end to years of unfairly imposed taxes upon ground transportation of passengers to airports like 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, according to Manesh Rath, partner at Keller and Heckman, who represented International Limousine in the case.

“The industry owes great gratitude to International Limousine for this result,” Rath noted. “Improvements in the law, and how agencies enforce those laws, can only occur because of conscientious businesses.”

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.

“This is a positive result, not only for International Limo, but for all passenger transportation operators in D.C. and around the nation,” Richard Kane, president and CEO of International Limousine stated.

The results were also published via Law360, an international resource for legal professionals. Since the day the article appeared (April 10), Rath reports that he has received calls from lawyers representing transportation companies as well as state’s attorney’s offices, asking to learn more about the case.

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