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

Jobs Virtual Career Fair for Teachers and K-12 Staff
Find teaching jobs and other jobs in K-12 education at the EdWeek Top School Jobs virtual career fair.
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
Mathematics Webinar
What is it About Math? Making Math Figure-Out-Able
Join Pam Harris for an engaging session challenging how we approach math, resulting in real world math that is “figure-out-able” for anyone.
Content provided by hand2mind
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
Reading & Literacy Webinar
Science of Reading: Emphasis on Language Comprehension
Dive into language comprehension through a breakdown of the Science of Reading with an interactive demonstration.
Content provided by Be GLAD

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 School District Lawsuits Against Social Media Companies Are Piling Up
More than 200 school districts are now suing the major social media companies over the youth mental health crisis.
7 min read
A close up of a statue of the blindfolded lady justice against a light blue background with a ghosted image of a hands holding a cellphone with Facebook "Like" and "Love" icons hovering above it.
iStock/Getty
Law & Courts In 1974, the Supreme Court Recognized English Learners' Rights. The Story Behind That Case
The Lau v. Nichols ruling said students have a right to a "meaningful opportunity" to participate in school, but its legacy is complex.
12 min read
Associate Justice of the U.S. Supreme Court William O. Douglas is shown in an undated photo.
U.S. Supreme Court Justice William O. Douglas, shown in an undated photo, wrote the opinion in <i>Lau</i> v. <i>Nichols</i>, the 1974 decision holding that the San Francisco school system had denied Chinese-speaking schoolchildren a meaningful opportunity to participate in their education.
AP
Law & Courts Supreme Court Declines to Hear School District's Transgender Restroom Case
The case asked whether federal law protects transgender students on the use of school facilities that correspond to their gender identity.
4 min read
People stand on the steps of the U.S. Supreme Court on Feb. 11, 2022, in Washington, D.C.
People stand on the steps of the U.S. Supreme Court on Feb. 11, 2022, in Washington, D.C.
Mariam Zuhaib/AP
Law & Courts What a Proposed Ban on AI-Assisted ‘Deep Fakes’ Would Mean for Cyberbullying
Students who create AI-generated, intimate images of their classmates would be breaking federal law, if a new bill is enacted.
2 min read
AI Education concept in blue: A robot hand holding a pencil.
iStock/Getty