09-520 CSX Transportation, Inc., v. Alabama Department of Revenue

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Tax
Tax Injunction Act

An interstate rail carrier may challenge Alabama’s sales and use taxes under the Railroad Revitalization and Regulatory Reform Act of 1976.

CSX is challenging “another tax” within subsection (b)(4)’s plain meaning. The Act does not define “tax.” Thus, this Court looks to the word’s ordinary definition, which is expansive. A State seeking to raise revenue may choose among multiple forms of taxation on property, income, transactions, or activities. “[A]nother tax” is thus best understood to encompass any tax a State might impose, on any asset or transaction, except the property taxes already addressed in sub-sections (b)(1)–(3). There is no reason to interpret subsection (b)(4)as applying only to the gross-receipts taxes that some States imposed  in lieu of property taxes at the time of the Act’s passage. Moreover, CSX’s complaint, contrary to the Eleventh Circuit’s apparent view, does protest Alabama’s imposition of taxes on its fuel. The exemptions the State has given may play a central role in CSX’s argument, but the complaint’s essential subject remains the taxes imposed.   350 Fed. Appx. 318, reversed and remanded.

09-520 CSX Transportation, Inc., v. Alabama Department of Revenue

Kagan, J.; Thomas, J., dissenting.

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