CSX Transportation, Inc. v. Alabama Department of Revenue

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The Railroad Revitalization and Regulatory Reform Act prohibits states from imposing a tax that discriminates against a rail carrier. 49 U.S.C. 11501(b)(4). The Eleventh Circuit held that Alabama's tax scheme, which imposes either a sales or use tax on rail carriers when they buy or consume diesel fuel but exempts competing motor and water carriers from those taxes, violates the Act as to water carriers, but not to motor carriers. The court held that the district court correctly concluded that the excise tax was roughly equivalent to the sales and use tax and thus the excise tax justified the motor carrier sales-tax exemption. However, unlike the motor carrier exemption, the State could offer no rough equivalency justification for the water carrier exemption because water carriers pay no state taxes at all when they buy or consume diesel. View "CSX Transportation, Inc. v. Alabama Department of Revenue" on Justia Law