Property Tax Exemption

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7^th Circuit Court of Appeals

Case Name: Union Pacific Railroad Company v. Wisconsin Department of Revenue

Case No.: 19-1741

Officials: FLAUM, ROVNER, and SCUDDER, Circuit Judges.

Focus: Property Tax Exemption

The Wisconsin Department of Revenue (the “Department”) disallowed the Union Pacific Railroad Company (“Union Pacific”) from claiming a property tax exemption for the value of its custom computer software, which under Wisconsin law is a type of intangible personal property. Union Pacific refused to pay the tax on its custom software and filed suit, arguing that the tax singles out railroads as part of an isolated and targeted group in violation of Section 306 of the Railroad Revitalization and Regulatory Reform Act of 1976 (the “4-R Act”), codified at 49 U.S.C. § 11501(b)(4) (“subsection (b)(4)”). The defendants contend that Wisconsin is permitted to grant non-railroads an exemption from its generally applicable ad valorem property tax scheme for intangible property, even if railroads do not qualify for the same exemption. The intangible property tax, however, exempts everyone except for an isolated and targeted group of which railroads are a part. The district court entered summary judgment for Union Pacific. We affirm.

Affirmed

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Derek A Hawkins is trademark corporate counsel for Harley-Davidson. Hawkins oversees the prosecution and maintenance of the Harley-Davidson’s international trademark portfolio in emerging markets.