Sixth Circuit: Railroads' suit, Tennessee fuel tax

Railroads claim Tennessee fuel tax violates federal law

The U.S. Court of Appeals for the Sixth Circuit today issued a decision in companion cases filed by five railroad companies against the Tennessee Department of Revenue, in response to Tennessee fuel tax provisions that the railroads claimed violated the federal Railroad Revitalization and Regulatory Reform Act of 1976 (the “4-R” Act)—federal law that prohibits states from imposing taxes that discriminate against a rail carrier. Tennessee changed its fuel tax law, to impose the same per gallon excise tax on railroad fuel as was imposed on trucks. The railroads sought an injunction, asserting that the Tennessee fuel tax was discriminatory because the railroads were the only entities (other than trucks) that paid it. The Sixth Circuit upheld a federal district court decision denying the injunction.


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The Sixth Circuit affirmed the district court’s denial of preliminary injunctive relief to the railroads, but remanded the cases to the district court for consideration of their arguments under the "competitive approach"—i.e., whether the tax imposed on the railroads is discriminatory as compared to a tax imposed (or not imposed) on someone or something else.

The case is:  BNSF Railway Co. v. Tennessee Department of Revenue, No. 14-6285 (6th Cir August 28, 2015). Read the Sixth Circuit’s decision [PDF 102 KB]


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