Kagan Opinion Allows Railroad to Challenge Alabama Tax as Discriminatory
A railroad may challenge an Alabama tax under a federal law that bars discriminatory taxes on rail carriers, the U.S. Supreme Court has ruled in an opinion by its newest justice.
CSX Transportation Inc. may invoke a 1976 federal law to challenge Alabama’s decision to impose a diesel fuel tax on railroads, but not on other competitors in the transportation industry, Justice Elena Kagan wrote in her majority opinion (PDF). The federal law bars discriminatory property taxes, and includes another provision that says states and localities may not “impose another tax that discriminates against a rail carrier.”
In an unusual alliance, Justice Clarence Thomas dissented in an opinion joined by Justice Ruth Bader Ginsburg. They agreed that Alabama’s tax constitutes “another tax” within the meaning of the statute, but they argue that the statute’s discrimination standard requires proof that railroads are singled out in comparison to general commercial and industrial taxpayers. CSX cannot prove facts to meet the standard, Thomas wrote.
The Associated Press has coverage of the decision, CSX Transportation Inc. v Alabama Department of Revenue.
