Law & Courts

High Court Hears Alabama Tax Case With K-12 Angle

By Mark Walsh — November 15, 2010 1 min read
  • Save to favorites
  • Print

In a case with implications for Alabama public schools—and one that’s being closely watched in other states—the U.S. Supreme Court is weighing whether a railroad can challenge a state sales and use tax on diesel fuel that rail carriers must pay, while motor and water carriers are exempt.

Alabama education groups have filed a friend-of-the-court brief on the side of the state, arguing that the tax on railroads is critical because it helps finance the state’s Education Trust Fund.

“The amount of [railroad tax] refund claims that could be resurrected by this case is potentially devastating to Alabama’s public schools,” says the brief filed by the Alabama Education Association, the Alabama Association of School Boards, and other groups.

In CSX Transportation Inc. v. Alabama Department of Revenue (Case No. 09-520), which was argued before the high court Nov. 10, the Jacksonville, Fla.-based railroad is seeking to challenge the state’s exemptions for motor and water carriers under a 1976 federal law called the Railroad Revitalization and Regulatory Reform Act, or 4-R Act.

Congress found that railroads were often subject to disparate state and local tax treatment because they were nonvoting, nonresidential businesses that couldn’t easily pick up and leave a state. The law prohibits tax discrimination against railroads, particularly on property taxes, but also includes a catch-all provision that bars states from “imposing another tax that discriminates against a rail carrier.”

CSX paid some $3 million to $4 million in sales and use tax on diesel fuel to Alabama before winning an injunction in 2008 that has barred the taxes. The school groups estimate that all railroads operating in the state pay about $20 million per year in such taxes, but several are seeking to invalidate the tax and win refunds.

The education groups say that a ruling for the railroad could end funding for 250 teachers or 1,400 support workers.

Nineteen states filed a joint friend-of-the-court brief on Alabama’s side, saying that a ruling for CSX could lead many other rail carriers to challenge sales and use taxes wherever some taxpayers benefit from exemptions.

A decision in the case is expected by June.

Related Tags:

A version of this article appeared in the November 17, 2010 edition of Education Week as Alabama Tax Case Has K-12 Wrinkle

Events

Budget & Finance Webinar Leverage New Funding Sources with Data-Informed Practices
Address the whole child using data-informed practices, gain valuable insights, and learn strategies that can benefit your district.
This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
Classroom Technology Webinar
ChatGPT & Education: 8 Ways AI Improves Student Outcomes
Revolutionize student success! Don't miss our expert-led webinar demonstrating practical ways AI tools will elevate learning experiences.
Content provided by Inzata
Classroom Technology K-12 Essentials Forum Tech Is Everywhere. But Is It Making Schools Better?
Join us for a lively discussion about the ways that technology is being used to improve schools and how it is falling short.

EdWeek Top School Jobs

Teacher Jobs
Search over ten thousand teaching jobs nationwide — elementary, middle, high school and more.
View Jobs
Principal Jobs
Find hundreds of jobs for principals, assistant principals, and other school leadership roles.
View Jobs
Administrator Jobs
Over a thousand district-level jobs: superintendents, directors, more.
View Jobs
Support Staff Jobs
Search thousands of jobs, from paraprofessionals to counselors and more.
View Jobs

Read Next

Law & Courts How a Court Ruling on a School’s Admission Policy Could Impact Others
Legal experts say a coming U.S. Supreme Court decision on race in college admissions could be relevant for the magnet school's policy.
8 min read
James Pan, the parent of an eighth-grader, speaks about a lawsuit he and other parents filed against the Fairfax County School Board over its plans to change the admissions process at Thomas Jefferson High School for Science and Technology, an elite public schools regularly ranked as one of the nation's best on Nov. 5, 2020 in Fairfax, Va.
James Pan, the parent of an 8th grader in Fairfax, Va., speaks Nov. 5, 2020, about a lawsuit he and other parents filed against the Fairfax County district over its plans to change the admissions process at Thomas Jefferson High School for Science and Technology.
Matthew Barakat/AP
Law & Courts Biden Administration Urges High Court to Reject Case on Legal Status of Charter Schools
The case about whether a North Carolina charter school is a "state actor" when it enforces its dress code is being watched closely.
4 min read
This artist sketch depicts Solicitor General Elizabeth Prelogar, right, presenting an argument before the Supreme Court, Monday, Nov. 1, 2021, in Washington.
U.S. Solicitor General Elizabeth B. Prelogar, shown in a November 2021 sketch arguing before the U.S. Supreme Court, has filed a brief urging the justices not to take up a closely watched case about the legal status of charter schools.
Dana Verkouteren via AP
Law & Courts Appeals Court Upholds Admissions Policy at Elite Virginia High School
Critics say the new admissions policy discriminates against highly qualified Asian Americans.
3 min read
Pacific Legal Foundation attorney Erin Wilcox speaks at a news conference outside the federal courthouse on March 10, 2021, in Alexandria, Va., where her organization filed a lawsuit against Fairfax County's school board, alleging discrimination against Asian Americans over its revised admissions process for the elite Thomas Jefferson High School for Science and Technology. A divided federal appeals court on Tuesday, May 23, 2023, upheld the constitutionality of a new admissions policy at the elite public high school in Virginia that critics say discriminates against highly qualified Asian Americans.
Pacific Legal Foundation attorney Erin Wilcox speaks at a news conference outside the federal courthouse on March 10, 2021, in Alexandria, Va., where her organization filed a lawsuit against Fairfax County's school board, alleging discrimination against Asian Americans over its revised admissions process for the elite Thomas Jefferson High School for Science and Technology. A divided federal appeals court on Tuesday, May 23, 2023, upheld the constitutionality of a new admissions policy at the elite public high school in Virginia that critics say discriminates against highly qualified Asian Americans.
Matthew Barakat/AP
Law & Courts District That Restricted Access to Over 100 Books Sued by Publisher, Free Speech Group
Penguin Random House, PEN America, and several banned book authors are suing a Florida school district over removing and restricting books.
6 min read
Jennifer Wilson, a Largo High School English teacher, wears a shirt against banning books at the Pinellas County School Board meeting in Largo, Fla., on Feb. 14, 2023. In Florida, some schools have covered or removed books under a new law that requires an evaluation of reading materials and for districts to publish a searchable list of books where individuals can then challenge specific titles.
Jennifer Wilson, a Largo High School English teacher, wears a shirt against banning books at the Pinellas County School Board meeting in Largo, Fla., on Feb. 14, 2023. In Florida, some schools have covered or removed books under a new law that requires an evaluation of reading materials and for districts to publish a searchable list of books where individuals can then challenge specific titles.
Dirk Shadd/Tampa Bay Times via AP