Are Toll Roads a Tax? The Constitutional Question After Vanderstock

Are Australian toll roads really user charges, or are they taxes imposed on the use of vehicles?

There is no simple answer.

No Australian court has ruled that ordinary toll road charges are unconstitutional taxes. Motorists remain legally required to pay tolls and comply with valid notices.

But the legal label placed on a charge does not settle its constitutional character.

Calling something a toll, fee or user charge does not automatically prevent it from being a tax. Courts look at how the charge actually operates, where the legal obligation comes from, what the payer receives and what the charge does in practice.

That question became more important after the High Court’s decision in Vanderstock v Victoria [2023] HCA 30.

The Short Answer

A toll road charge is generally presented as payment for access to a particular road.

That supports the argument that it is a fee for a service, privilege or facility rather than a general tax.

But that is not necessarily the end of the inquiry.

A toll could attract closer constitutional scrutiny where:

Payment is imposed through state legislation
The charge is compulsory once the road is used
Practical alternatives are limited or unrealistic
Revenue continues long after the original road has been built
Pricing is disconnected from the actual cost or value of the service
The arrangement operates as a continuing charge on vehicle use
Statutory enforcement supports collection
The charge has a real economic effect on the use of vehicles

None of these factors proves that a toll is a tax. They show why the legal question cannot be answered by the word “toll” alone.

Tax and Excise Are Not the Same Thing

This distinction matters.

Even if a toll is legally characterised as a tax, it does not automatically follow that it is unconstitutional.

Section 90 of the Australian Constitution gives the Commonwealth Parliament exclusive power to impose duties of customs and excise.

For a state toll to be invalid under section 90, the argument would generally need to establish that:

The charge is legally a tax
It is a tax on goods within the constitutional meaning of an excise
The obligation is imposed through state law
The charge has the necessary relationship with goods, potentially including their use or consumption

A state can impose many forms of taxation. Section 90 is concerned specifically with customs and excise duties.

The real constitutional question is therefore not simply:

“Is this toll a tax?”

It is:

“Is this state-imposed charge properly characterised as a tax on goods and therefore a duty of excise?”

What Is a Tax?

Australian constitutional cases traditionally examine whether a charge is:

Compulsory
Enforceable by law
Collected by or under public authority
Imposed for public purposes
Something other than genuine payment for services received

These factors are a starting point, not a mechanical checklist.

A charge does not escape examination merely because legislation calls it a fee. Equally, a compulsory charge does not automatically become a tax.

The court must examine the substance and practical operation of the arrangement.

What Is a Fee for Service?

A genuine fee for service normally involves an identifiable service, facility, right or privilege being provided to the person who pays.

For toll roads, the identified benefit is access to a particular piece of road infrastructure.

That is the strongest argument against treating ordinary tolls as taxes.

The motorist uses a particular road. The toll is connected with that use. In some locations, the driver can choose another route.

However, fee-for-service law is more complicated than simply comparing the toll with the cost of one journey.

In Airservices Australia v Canadian Airlines International Ltd [1999] HCA 62, the High Court considered charges imposed for aviation facilities and services.

The case shows that:

There does not need to be an exact dollar-for-dollar match between each charge and each individual service
Charges may recover the costs of maintaining a wider service network
A reasonable rate of return does not automatically turn a charge into taxation
Cross-subsidisation between users does not necessarily make a charge a tax
The relationship between the charge and the service remains important

This means that profitability alone would not prove that a toll is a tax.

The full legal and commercial structure would need to be examined.

What Did Vanderstock Decide?

Vanderstock v Victoria concerned a Victorian charge on zero and low-emission vehicles.

The charge was calculated according to the number of kilometres the vehicle travelled on specified roads.

Victoria accepted that the charge was a tax. The dispute was whether it was a duty of excise that Victoria had no constitutional power to impose.

In October 2023, a four-to-three majority of the High Court held that the charge was an invalid duty of excise.

The majority held that an excise can include an inland tax imposed in relation to the consumption or use of goods.

That was significant because earlier authority had been understood as excluding taxes imposed only at the consumption stage.

The majority considered whether:

The tax had a close relationship with the production, sale, distribution or consumption of goods
The tax affected those goods as manufactured products or articles of commerce

The vehicle charge was connected directly with the use of zero and low-emission vehicles. The Court also found that the charge had a tendency to affect demand for those vehicles.

Did Vanderstock Declare Toll Roads Unconstitutional?

No.

The case did not concern an ordinary toll charged for using a particular bridge, tunnel or motorway.

The Victorian charge applied according to the distance a vehicle travelled on specified roads. It was not a payment made to enter one particular toll road facility.

That difference is important.

A conventional toll operator would likely argue that the motorist receives something identifiable in return:

Access to a particular road
A bridge or tunnel crossing
A faster route
Travel time savings
Use of infrastructure maintained for road users

Those features may support characterisation as a fee for a service, facility or privilege.

The counterargument is that some modern tolling arrangements have moved beyond straightforward recovery of construction and operating costs.

Long concession periods, escalating prices, statutory collection systems and limited practical alternatives raise a different question about what the charge has become over time.

That question has not been finally determined by the High Court.

Could a Toll Be Connected With the Use of Goods?

A motor vehicle is a good.

A toll becomes payable because that vehicle is driven on a particular road.

After Vanderstock, a tax does not necessarily fall outside section 90 merely because it is imposed when goods are used or consumed.

The constitutional argument would be that a state-imposed toll may have a close relationship with the use of a vehicle and may affect vehicles as articles of commerce by increasing their cost of use.

But there are substantial counterarguments.

Unlike the Victorian ZLEV charge:

An ordinary toll is connected with access to a specific facility
Liability usually depends on entering a defined toll road
The charge may apply regardless of the vehicle’s purchase price or fuel type
Alternative routes may be available
The payment may represent the value of access rather than taxation of the vehicle itself

These competing points would need to be tested against the legislation and operation of each toll road.

Does Collection by a Private Company Prevent a Toll Being a Tax?

Not necessarily, but it makes the analysis more complicated.

Many Australian toll roads are operated through agreements involving governments, statutory powers and private companies.

The legal inquiry may need to examine:

Who legally imposes the toll
Which legislation creates the payment obligation
Who determines the price
Who receives the revenue
Whether the operator acts under delegated government authority
What happens to the revenue
How unpaid tolls are enforced
Whether government agencies become involved
Whether the private operator carries genuine commercial risk

The identity of the company collecting the money is relevant, but it may not answer the entire constitutional question.

The source and legal character of the obligation matter too.

Does Making a Profit Turn a Toll Into a Tax?

No. Profit alone is not enough.

A private business may charge for providing a facility and earn a commercial return without the payment becoming taxation.

The more useful questions are:

What service or privilege is being supplied?
Is the charge reasonably connected with that service or privilege?
How is the toll calculated?
Does the revenue broadly relate to building, financing, maintaining and operating the road?
Does the arrangement continue after those costs have been recovered?
Does the charge increasingly resemble a general revenue mechanism?
What economic effect does the charge have on vehicle use?

Profit may form part of the factual picture. It is not a legal shortcut.

Are Toll Roads Voluntary?

Toll operators can argue that motorists choose whether to enter a toll road.

In theory, another route may be available.

In practice, the question can be harder.

A supposed alternative may involve:

Considerably longer travel
Congested local roads
Heavy vehicle restrictions
Increased fuel use
Lost working time
Routes unsuitable for regular commuting
No realistic substitute for a bridge or tunnel

The existence of an alternative road does not automatically settle whether payment is genuinely voluntary.

However, inconvenience does not automatically turn a road toll into taxation either.

The practical road network, traffic restrictions and available alternatives would all be relevant evidence.

Why Toll Duration Matters

Some toll roads were originally presented as a way to finance new infrastructure.

The public might reasonably expect the toll to end when construction, financing and reasonable operating costs have been recovered.

In reality, tolling arrangements can continue for decades. Concessions may be extended, prices may increase and toll revenue may support broader commercial arrangements.

That does not automatically make the toll unconstitutional.

It does raise legitimate questions:

What is the toll currently paying for?
How much of the charge relates to the road itself?
How much revenue has already been collected?
How long will tolling continue?
Have concession extensions funded unrelated projects?
Is the amount connected with the value of the facility being used?
Has the arrangement become permanent revenue extraction?

These are factual questions. Proper answers would require access to legislation, concession deeds, financial records and traffic data.

The Robin Hood Tech Position

Robin Hood Tech is not claiming that Vanderstock automatically invalidated every toll road in Australia.

Our position is that the decision changed the constitutional landscape enough to justify proper examination.

The central questions are:

Are modern tolls genuine charges for identifiable road services?
Are some tolls operating more like compulsory state-backed revenue measures?
Is there a reasonable relationship between the charge and what the motorist receives?
Can a charge on vehicle use become a tax on goods after Vanderstock?
What happens when toll revenue continues well beyond ordinary cost recovery?
Does private collection change the constitutional character of a liability created and enforced through state law?

These arguments remain to be tested.

Court proceedings and outcomes cannot be guaranteed.

Do Motorists Still Have to Pay Tolls?

Yes.

Nothing in Vanderstock gives motorists a general right to stop paying ordinary tolls.

Current toll legislation, payment obligations, notices and enforcement processes continue to operate unless a court declares otherwise or Parliament changes the law.

A constitutional argument does not suspend an individual motorist’s legal obligations.

Robin Hood Tech does not encourage toll evasion or ignoring legal notices.

Can Motorists Claim Back Previously Paid Tolls?

There is no automatic entitlement to a refund.

Any potential claim would depend on matters including:

A court finding that a particular charge was invalid
The legislation applying to that charge
Limitation periods
Restitution principles
Defences available to the state or operator
The circumstances in which payments were made

No general court decision presently establishes that Australian motorists can recover ordinary toll payments.

Frequently Asked Questions

Are toll roads a form of taxation?

Tolls are generally treated as charges for using particular road infrastructure. However, their constitutional character depends on their legal source, operation and relationship to the service provided.

Are toll roads unconstitutional in Australia?

No Australian court has declared ordinary toll roads generally unconstitutional.

Did Vanderstock make toll roads illegal?

No. Vanderstock invalidated Victoria’s distance-based zero and low-emission vehicle charge. It did not decide the validity of ordinary tolls.

Could a toll be a duty of excise?

Potentially, but this has not been established. It would need to be shown that the toll is a tax, that it is imposed by a state and that it is properly characterised as a tax on goods under section 90.

Is every compulsory payment a tax?

No. Fees for services, charges for property use, licence fees, fines and payments for privileges may remain non-tax charges depending on their legal character.

Does calling it a user charge settle the issue?

No. Courts examine substance and practical operation, not merely the name attached to a charge.

Does the availability of another road mean the toll is voluntary?

It may support that argument, but the practical usefulness of the alternative may also be relevant. The existence of an alternative route does not answer every legal question.

Does private ownership make a toll lawful?

Private operation does not by itself determine constitutional validity. The legislation, contractual arrangement, source of liability, pricing structure and enforcement system would need to be examined.

Does profit prove that a toll is a tax?

No. A fee can include network costs and a reasonable commercial return. Profit is relevant context, but it does not settle the legal characterisation.

Official Legal Sources

Australian Constitution, including section 90

Vanderstock v Victoria [2023] HCA 30

High Court summary of Vanderstock

Airservices Australia v Canadian Airlines International Ltd [1999] HCA 62

Queensland Transport Infrastructure Act 1994

Important Disclaimer

This page discusses an unresolved constitutional argument.

It provides general public information and commentary only. It is not legal advice and should not be relied upon as a reason to avoid paying a toll, ignore a notice or miss a legal deadline.

No Australian court has ruled that ordinary toll road charges are unconstitutional under section 90. Applying Vanderstock to any toll would require detailed examination of the particular legislation, road, charge and commercial arrangement.

Last reviewed: 23 September 2026

Author: Adam Littlefield, Robin Hood Tech