Oral argument: Nov. 10, 2010
Appealed from: United States Court of Appeals for the Eleventh Circuit (Sep. 1, 2009)
RAILROADS, DISCRIMINATION, RAILROAD REVITALIZATION AND REGULATORY REFORM ACT, STATE TAXATION
Due to findings of tax discrimination against interstate railroads, Congress enacted the Railroad Revitalization and Regulatory Reform Act of 1976 (“4-R Act”). The 4-R Act describes four forbidden taxation schemes, the last of which acts as a catch-all for discriminatory statutes not prohibited by the first three categories. Under this catch-all provision, CSX Transportation challenges an Alabama tax that applies to interstate railroads but exempts its motor and water-carrier competitors. CSX Transportation argues that the plain meaning of the 4-R Act and Congress's clear intention to protect railroads permits its challenge. In contrast, the Alabama Department of Revenue argues that the plain meaning of the statute as well as Supreme Court precedent preclude challenges to tax exemptions under the 4-R Act. The circuit courts are currently split on the issue. In this case, the Supreme Court will resolve the circuit split, address issues of federalism, consider the impacts of the decision on Alabama's public schools, and ultimately determine if non-property tax exemptions may be challenged as discriminatory under the 4-R Act.