Appeals court sides with Alabama on railroad tax suit
A federal appeals court has sided with Alabama in a lawsuit that Norfolk Southern Railway Co. filed against the state over the sales and use taxes charged on diesel fuel used by railroads.
Norfolk Southern claimed the state’s 4 percent tax is discriminatory because the trucking industry doesn’t pay the same tax. But the 11th U.S. Circuit Court of Appeals ruled Thursday the sales and use tax does not single out railroads.
The court also noted that the trucking industry pays other taxes that railroads don’t pay.
Norfolk Southern had sought a preliminary injunction to prohibit the state from collecting the tax. But the appeals court said such a step is unwarranted because Norfolk Southern has no likelihood of success with its lawsuit.