Chevron Challenges City’s Manufacturing Tax

RICHMOND, Calif. (CN) - Chevron USA is challenging a 2008 manufacturing tax called "Measure T," that passed in Richmond, Calif., by a 51.5 percent majority, claiming it exploits the "immobility and scarcity of refinery operations."

In a lawsuit filed in Contra Costa County Court, Chevron says the measure unfairly hikes taxes for manufacturers, but not for wholesalers, retailers and service providers.

Measure T forces manufacturers to pay an annual licensing fee equal to one-fourth of 1 percent of the value of the materials used in the manufacturing process.

Chevron, with its oil refinery, is the largest manufacturer in the city.

"Measure T makes no finding that manufacturers consume a greater amount of city services than non-manufacturers," Chevron argues. It says the annual fee "bears no reasonable relationship" to any burden placed on city services by manufacturers.

Chevron claims the tax violates the internal and external consistency test, is not fairly related to city services, discriminates against and unduly burdens interstate commerce and creates a substantial risk of repeat taxation.

The plaintiff seeks an order declaring Measure T null and void.

It is represented by Richard Nielsen of Pillsbury Winthrop Shaw Pittman LLP.

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