Report: CSX sues Tennessee over fuel tax

CSX is suing the state of Tennessee over a statute that levies a diesel tax on railroads.

The Class I, which claims the statute violates federal law, is seeking a $28 million refund in state taxes paid for fuel, the Tennessee Lookout and other local news media reported this week.

CSX's lawsuit centers on Tennessee's 2014 Transportation Fuel Equity Tax, which imposes a 17-cents-per-gallon tax on railroad diesel. Water carriers and motor carriers — CSX's main competitors — are exempt from the tax, however.

As a result, CSX argues the tax singles out railroads for taxation, which violates a federal law that prohibits discriminatory taxes on railroads, according to the report.

Last year, CSX sought a refund of the taxes it has paid since 2014, but was denied. That denial was "unjust, illegal and incorrect,” the lawsuit claims.

CSX filed the lawsuit in Davidson County Chancery Court against David Gerregano, Tennessee’s Commissioner of Revenue.