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7/18/2001



Rail News: Rail Industry Trends

CSXT's property tax case against New York continues


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U.S. District Court for the Southern District of New York July 17 ruled that the state of New York must remain a party to CSX Transportation's legal challenge of the state's railroad property tax assessment policy, enabling the case to resume.
The court previously issued an order freezing CSXT's property taxes at 2000 levels until the case concludes.
"New York's railroads are facing a tax burden that's 10 times that of any neighboring state, because New York assess rail property in a discriminatory manner compared to other commercial and industrial properties," said John Casellini, CSXT resident vice president for state relations, in a prepared statement. "CSXT strongly believes that it can and should be a partner in New York's economic renaissance, but its current tax burden places the state at a distinct disadvantage when we consider capital investments outside of those required to ensure the safety and integrity of our existing operations."
CSXT Feb. 13 filed a lawsuit with the district court, claiming New York taxes rail property at a higher percentage of market value than other commercial and industrial property, and that the state bases railroad property value on reproduction costs that don’t adequately account for depreciation.
CSXT officials also claim federal law prohibits a state and its jurisdictions from imposing discriminatory taxes on a railroad.
Discovery proceedings could begin by mid-August; the next scheduled hearing is set for Sept. 6 at the White Plains, N.Y., court.


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