High Court rules against Victoria’s electric vehicle road charge
The state “imposes a duty of excise” within the meaning of s90 of the Constitution, its summary judgement says.
The High Court has today ruled against Victoria’s electric vehicle road charge because it “imposes a duty of excise within the meaning of section 90 of the Constitution” in a landmark decision.
A majority of the court found that the state’s Zero and Low Emission Vehicle Distance-based Charge Act 2021 (Vic), which imposes a levy on kilometres driven in electric and hybrid cars, is invalid after the case was brought by two EV owners.
Christopher Vanderstock and Kathleen Davies paid the levy but began legal action against the State of Victoria on the basis that it contravened s90, and the Commonwealth Attorney-General and the Australian Trucking Association intervened to support them.
The attorneys-general of every state and territory backed Victoria.
In its summary ruling, the High Court said s7(1) of the ZLEV Charge Act required the registered operator of a zero or low emissions vehicle (ZLEV) to pay a charge for “use of the ZLEV on specified roads”, which effectively meant all public roads in Australia.
The ZLEV charge would be determined annually for each kilometre travelled and was set at 2.5c for an EV or hydrogen vehicle and 2c for a plug-in hybrid for FY2021-22.
The High Court in a summary ruling today on Vanderstock & Anor v State of Victoria [2023] HCA 30, said s90 gave Commonwealth Parliament the power “to impose duties of customs and of excise” that was “exclusive” of the powers of the states and self-governing territories and s7(1) of the ZLEV Charge Act was invalid.
“The court reopened and overruled its decision in Dickenson's Arcade Pty Ltd v Tasmania (1974) 130 CLR 177, which held by majority that a tax on the consumption of goods does not constitute a duty of excise,” it said.
“The court held that an excise within the meaning of s90 is an inland tax on goods. The question of whether a tax is to be characterised as a tax on goods turns on whether, first, the tax bears a close relation to the production or manufacture, sale, distribution or consumption of goods, and, second, whether the tax is of such a nature as to affect the goods as the subjects of manufacture or production or as articles of commerce.”
“The ZLEV charge is a tax on goods because there is a close relation between the tax and the use of ZLEVs, and the tax affects ZLEVs as articles of commerce, including because of its tendency to affect demand for ZLEVs.”
About the author
