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2/23/2011



Rail News: Rail Industry Trends

CSX can challenge Alabama's fuel tax, Supreme Court says


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Yesterday, the U.S. Supreme Court issued a ruling that will enable CSX Corp. to challenge the state of Alabama’s 4 percent tax on railroads’ diesel purchases.

CSX filed a petition with lower courts claiming the tax is illegal and discriminates against railroads because trucking firms and water carriers aren’t charged the same tax. In portions of Alabama, the Class I pays diesel taxes as high as 10 percent while motor carriers pay a flat rate of 19 cents per gallon, and water carriers are generally exempt from sales and use taxes, according to CSX.

“We look forward to having our case reconsidered by the lower courts in accordance with the Supreme Court decision,” CSX officials said in a prepared statement.

The 11th U.S. Circuit Court of Appeals earlier ruled that the Class I couldn’t challenge Alabama’s decision to levy the tax, but the Supreme Court overturned that decision. However, the Supreme Court didn’t rule on whether the Alabama tax discriminates against railroads.


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