Idaho trucking and truck-brokerage businesses are claiming a victory after an Idaho Supreme Court ruling against the Idaho Department of Labor.
The ruling ends Idahos unusual practice of treating truckers whose services are commissioned by the brokers as employees of the brokerages for unemployment-insurance purposes.
Julie Pipal, executive director for the Idaho Trucking Association, said the ruling will help independent truckers and brokers stay in business.
The stakeholders are anyone who at any time may want to contract with an independent (trucking) contractor, Pipal said. The ambiguity had made many companies shy away from that logistical alternative.
The lawsuit was filed by Boise trucking broker Western Housing Transportation Inc. and its owner, Sid Burgess. Western coordinates moving manufactured homes all over the country. Western commissions trucking companies to handle transportation.
Under the previous rules, Idaho considered the independent truckers to be employees of the brokers because the truckers rely on federal permits held by brokerages for interstate travel. That meant brokers were on the hook for paying unemployment insurance for truckers who filed their own taxes, owned and maintained their own trucks, had the power to hire employees and were otherwise self-employed, said David Leroy, the Boise attorney representing Western.
A 2011 audit revealed Western hadnt submitted about $12,000 to pay the tax for 13 independent operators that transported houses for Western that year.
Leroy said Idaho was the only state that taxed brokers as if independent truckers were employees.
We contended thats not reasonable. Thats not fair, Leroy said. And the Supreme Court agreed.
The significance of the ruling is broader than Westerns tax bill, Pipal said. All trucking brokers will not have to pay the tax going forward, which will help many stay in business. The ruling also benefits truckers, which is why the association filed an amicus brief in support of Western.
The original (rule) caused many trucking companies to either quit using independent contractors altogether or to completely change their model for doing business, Pipal said.
Leroy said the ruling wouldnt shift a tax burden from brokers to independent truckers because the truckers were likely already paying their own unemployment-insurance taxes. Pipal said the ruling will benefit the 39,900 people directly and indirectly working in the Idaho trucking industry thats being overwhelmed by regulations.
This ruling lifts an unnecessary obstacle from letting the economy and individual choice dictate the terms of employment or contractor status, she said.
Zach Kyle: 377-6464,Twitter: @IDS_zachkyle