The U.S. Supreme Court issued a unanimous decision that will allow railroads to challenge state methods for determining the value of railroad property, as well as how those methods are applied.
The case, CSX Transportation v. Georgia State Board of Equalization, reversed a decision by the U.S. Court of Appeals for the Eleventh Circuit that said the Railroad Revitalization and Regulatory Reform Act did not explicitly give railroads this right. The Supreme Court disagreed and said the language of the act was clear enough.
"The Railroad Revitalization and Regulatory Reform Act prohibits states from discriminating against railroads by taxing railroad property more heavily than other commercial property in the state," wrote Chief Justice John Roberts in his opinion.
He noted that the act says that states may not assess rail transportation property at a value that has a higher ratio to the property's true market value than the ratio between the assessed and true market value of other commercial and industrial property in the same taxing jurisdiction. If the railroad ratio exceeds the ratio for other property by at least 5 percent, the district court may enjoin the tax. Roberts noted that the statute was enacted with the principles of federalism in mind.
"Georgia also protests that our interpretation will destroy the states' discretion to choose their own valuation methodologies," Roberts wrote. "We disagree. A state may use whatever method or methods it likes, so long as the result is not discriminatory."
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