FOR IMMEDIATE RELEASE
NEWS ADVISORY
March 4, 2014
For More Information, contact:
Luther Strange
Mike Lewis (334) 353-2199
Alabama Attorney General
Joy Patterson (334) 242-7491
Claire Haynes (334) 242-7351
Page 1 of 1
AG STRANGE PRAISES U.S. SUPREME COURT’S DECISION IN
ALABAMA DEPARTMENT OF REVENUE V. CSX TRANSPORTATION, INC.
(MONTGOMERY) – The U.S. Supreme Court today issued a decision in Alabama
Department of Revenue v. CSX Transportation, Inc., which permits Alabama to justify its tax
treatment of railroads as compared to motor carriers and water carriers under the “4-R Act.”
“Alabama’s sales tax does not discriminate against railroads and is perfectly consistent
with federal law,” said Alabama Attorney General Strange. “I am pleased that the Supreme
Court has given Alabama the opportunity to show that its tax scheme is fair.”
CSX, like all purchasers of off-road diesel fuel and other goods, pays the state’s
generally applicable 4 percent sales and use tax. Motor carriers are exempt from paying that
sales and use tax because they pay a roughly equivalent motor fuels tax of 19 cents per
gallon. And interstate water carriers do not have to pay the sales and use tax because
interstate commerce traveling by water is historically and constitutionally favored.
Although federal law prohibits taxes that “discriminate” against rail carriers, the
Attorney General’s Office argued that Alabama should be allowed to justify treating
railroads differently. The 11th Circuit Court of Appeals ruled against Alabama, and the
Supreme Court reversed. The Supreme Court held that the lower courts should have
allowed Alabama to justify its tax scheme by reference to public policy and comparable taxes.
Attorney General Strange commended Solicitor General Andrew Brasher and
Assistant Solicitor General Megan Kirkpatrick for their work on this case.
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501 Washington Avenue * Montgomery, AL 36104 * (334) 242-7300
www.ago.alabama.gov
