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US Supreme Court remands discriminatory challenge to Alabama’s fuel excise tax

On March 4, the U.S. Supreme Court ruled that the Eleventh Circuit Court of Appeals properly concluded that a taxpayer’s transportation industry competitors were an appropriate comparison class for the taxpayer’s claim that the sales and use taxes imposed on railroads were discriminatory under the Railroad Revitalization and Regulation Reform Act of 1976. However, the Court reversed the Eleventh Circuit’s decision, and remanded the case for further consideration of whether Alabama discriminated against the taxpayer and other railroad carriers by exempting motor and water carriers from its sales and use taxes and instead subjecting motor carriers to an alternative fuel-excise tax, while not imposing any comparable alternative tax on water carriers.

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