CSX Transportation, Inc. v. Alabama Department of Revenue, 562 U.S. 277

CSX Transportation challenges Alabama sales and use taxes on diesel fuel as discriminatory under 49 U.S.C. § 11501(b)(4).
Alabama taxes diesel fuel with a 4% sales tax and a 4% use tax; motor and water carrier fuel exemptions render railroads disadvantaged.
Railroads pay the taxes while motor and water carriers receive exemptions from those taxes.
CSX sued the Alabama Department of Revenue and its Commissioner in federal court; district court dismissed the claim and the Eleventh Circuit affirmed per curiam, citing Norfolk Southern and ACF Industries.
The Supreme Court granted certiorari to decide (i) whether § 11501(b)(4) covers non-property taxes and (ii) whether exemptions to competitors can constitute discrimination against rail carriers.
The Court holds that CSX may challenge Alabama’s sales and use taxes as “taxes that discriminate against a rail carrier” under § 11501(b)(4), and remands for further proceedings to address actual discrimination.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether §11501(b)(4) covers non-property taxes	CSX contends (b)(4) prohibits any other tax discriminating against railroads, including excises	Alabama contends (b)(4) targets only non-property exemptions not intended to cover non-property taxes, relying on ACF Industries	Yes; (b)(4) covers non-property taxes and discrimination via exemptions.
Whether discrimination includes exemptions given to competitors	CSX argues exemptions to competitors show discriminatory treatment against railroads	Alabama argues exemptions may not render a generally applicable tax discriminatory under (b)(4)	Yes; discrimination can arise from exemptions, but remand required to assess actual discrimination.

Burlington Northern R. Co. v. Oklahoma Tax Comm’n, 481 U.S. 454 (1987) (statutory framework recognizing discriminatory taxation against rail carriers)
Department of Revenue of Ore. v. ACF Industries, Inc., 510 U.S. 332 (1994) (structural approach to § 11501(b); property exemptions analyzed; b(4) interpreted in context)
Norfolk Southern R. Co. v. Alabama Dept. of Revenue, 550 F.3d 1306 (11th Cir. 2008) ( Eleventh Circuit applying ACF Industries reasoning to non-property taxes (discounted))
Davis v. Michigan Dept. of Treasury, 489 U.S. 803 (1989) (tax exemptions can discriminate against other groups)
Bacchus Imports, Ltd. v. Dias, 468 U.S. 263 (1984) (exemptions can constitute discrimination under tax schemes)
Camps Newfound / Owatonna, Inc. v. Town of Harrison, 520 U.S. 564 (1997) (tax exemptions for locals may discriminate against non-residents)