The Supreme Court of the United States announced a decision in one case today:
Alabama Dept. of Revenue v. CSX Transp., Inc., No. 13-553: The Railroad Revitalization and Regulation Reform Act of 1976, 49 U.S.C. §11501(b)(4), prohibits States from imposing taxes that “discriminat[e] against a rail carrier.” Respondent CSX Transportation brought a suit to enjoin Alabama officers from collecting sales tax on its diesel purchases, alleging that Alabama “discriminates against a rail carrier” because the State imposes sales and use taxes on railroads when they purchase or consume diesel fuel, but exempts motor carriers and water carriers, both of which are railroad competitors, from those taxes. Instead, motor carriers pay an alternative fuel-excise tax on diesel, while water carriers pay neither the sales nor excise tax. The District Court rejected CSX’s claim on remand from the Supreme Court’s holding that a tax “discriminates” under §11501(b)(4) when it treats “groups [that] are similarly situated” differently without sufficient “justification for the difference in treatment.” The Eleventh Circuit, however, reversed, holding that CSX could establish discrimination by showing that Alabama taxes rail carriers differently than competitors, and rejecting Alabama’s argument that imposing a fuel-excise tax on motor carriers, but not rail carriers, justified imposing the sales tax on rail carriers, but not motor carriers. The Court today reversed, holding that the Eleventh Circuit properly concluded that CSX’s motor carriers and water carriers were an appropriate comparison class for §11501(b)(4), but that the Eleventh Circuit erred in refusing to consider whether Alabama could justify its decision to exempt motor carriers from its sales and use tax through its decision to subject motor carriers to a fuel-excise tax.
The Court's decision is available here.