Court action considered against Victorian luxury tax

The Victorian government could find a lawsuit on its hands as a result of treasurer Tim Pallas’ duty tax on luxury vehicles over $100,000.

The Australian Automotive Dealer Association is currently assessing a legal challenge in the High Court to prevent the stamp duty increase which would add $14 or $18 to every $200 of value over $100,000 and $150,000 respectively.

The AADA tells the Sydney Morning Herald this week it is contemplating a “constitutional challenge” to not only stop Victoria’s Labor government taxing consumers, but to prevent other states for attempting to copycat.

“Treasurers are treasurers, once they see one of their counterparts dip into the car buyer’s wallet, our concern is it will become contagious,” chief executive David Blackhall says.

According to the AADA’s counsel, Pallas, who declared last week he was implementing the tax “because I can”, could be in breach of the highest law in Australia.

“We’re taking advice on the legality of what’s happened ,” Blackhall reveals.

“There are serious-minded, well-informed senior counsel who are talking to us about aspects of this tax that may be in breach of our constitution,” he explains.

If the state budget passes through the Senate unchanged, Victoria will have the highest motor vehicle stamp duty of any state in Australia, adding to the 5% import tariff, 1-% GST, 33% federal Luxury Car Tax (over $66,331R retail threshold), and the state’s current 4.2% stamp duty for cars below the federal LCT threshold, and 5.2% for those over it.