Perspectives

US Supreme Court hears oral arguments in Alabama sales tax '4-R' Act case

Multistate tax alert | January 16, 2015

​The US Supreme Court recently heard oral arguments in ‘Alabama Department of Revenue v. CSX Transportation, Inc.’ (“CSX”). In this Tax Alert we summarize the procedural history of ‘CSX’ and the parties’ arguments before the U.S. Supreme Court. We also provide some taxpayer considerations.

​Alabama’s sales tax regime under the 4-R Act

The US Supreme Court recently heard oral arguments in Alabama Department of Revenue v. CSX Transportation, Inc. ("CSX")1 a case concerning whether Alabama’s sales tax regime is discriminatory under the Railroad Revitalization and Regulatory Reform Act (“4-R Act”). The 4-R Act prohibits a state from “impos[ing] [a] tax that discriminates against rail carriers providing transportation….”2 The issue before the Court is whether Alabama’s sales tax regime, which imposes a sales tax on a railroad’s purchases of diesel fuel but exempts similar purchases by certain competitors (motor and water carriers), violates the anti-discrimination provisions of the 4-R Act.

In this Tax Alert we summarize the procedural history of CSX and the parties’ arguments before the US Supreme Court. We also provide some taxpayer considerations.

1 CSX Transp., Inc. v. Ala. Dep’t of Revenue, No. 13-553 (U.S. argued Dec. 9, 2014).

2 49 U.S.C. § 11501(b)(4).

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The Multistate Tax Alert Archive includes external tax alerts issued by Deloitte Tax LLP's Multistate Tax practice during the last three years. These external alerts highlight selected developments involving state tax legislative, judicial, and administrative matters. The alerts provide a brief summary of specific multistate developments relevant to taxpayers, tax professionals, and other interested persons.

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