Justia Transportation Law Opinion Summaries

Articles Posted in Tax Law
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The Ninth Circuit affirmed the district court's preliminary injunction in favor of BNSF in an action brought by BNSF, alleging that several California counties are taxing railroad property at a higher rate than the rate applicable to commercial and industrial property in the same assessment jurisdiction, in violation of the Railroad Revitalization and Regulatory Reform Act of 1976, 49 U.S.C. 11501(b)(3).As a preliminary matter, the panel held that the district court had jurisdiction over the action under section 11501(c), and the panel has jurisdiction under 28 U.S.C. 1292(a). The panel concluded that the district court applied the correct preliminary injunction standard under section 11501, which does not require courts to consider traditional equitable factors. Rather, binding circuit precedent establishes that a railroad is entitled to a preliminary injunction if its evidence demonstrates reasonable cause to believe that a violation of section 11501 has been, or is about to be committed. The panel also concluded that the district court properly analyzed BNSF's tax rate under the Trailer Train framework, and concluded that the counties were overtaxing BNSF's property in violation of section 11501(b)(3). The court suggested, as proceedings continue, that the district court consider in the first instance whether the State or the county is the proper assessment jurisdiction. View "BNSF Railway Co. v. County of Alameda" on Justia Law

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The Supreme Court held that Section 858.01 of the Codified Ordinances of the Village of Put-In-Bay does not impose an unconstitutional tax on motor vehicles.The Village filed separate criminal complaints against Defendants, who operated businesses that made motorized golf cars available for rent within the Village, for failing to pay the annual license fee on their golf carts. The trial court dismissed the criminal complaints on the basis that section 858.01 is for a similar purpose as the annual state license tax levied on the operation of motor vehicles under Ohio Rev. Code 4503.02 and the local government tax permitted by Ohio Rev. Code 4504.02 and 4504.06. The court of appeals reversed, concluding that section 858.01 was not preempted by state law and did not violate Ohio Const. art. XII, 5a. The Supreme Court affirmed, holding (1) the tax is a constitutional exercise of the municipality's right to tax; and (2) section 858.01 does not impose an unconstitutional tax. View "Put-in-Bay v. Mathys" on Justia Law

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BNSF filed suit under the Railroad Revitalization and Regulatory Reform Act of 1976 (4-R Act), alleging that the tax on its intangible personal property is "another tax that discriminates against a rail carrier" under 49 U.S.C. 11501(b)(4).The Ninth Circuit joined the Fourth, Seventh, Eighth, and Tenth Circuits and held that challenges to discriminatory property taxes may proceed under 49 U.S.C. 11501(b)(4). The court rejected the Department's claims to the contrary and explained that this is not a challenge to exemption-based discrimination. The panel agreed with the district court that the proper comparison class for BNSF was Oregon's commercial and industrial taxpayers, and that the intangible personal property tax assessment discriminated against BNSF in violation of the 4-R Act. View "BNSF Railway Co. v. Oregon Department of Revenue" on Justia Law

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In 2015, the Washington legislature enacted RCW 81.104.160(1) (MVET statute) authorizing Sound Transit to use two separate depreciation schedules to calculate motor vehicle excise taxes (MVET). Under the statute, Sound Transit could pledge revenue from a 1996 depreciation schedule for MVETs to pay off bond contracts; Sound Transit could use a 2006 depreciation schedule for all other MVETs. Though each schedule is referenced, the MVET statute did not restate in full either schedule. Taylor Black and other taxpayers alleged the MVET statute violated article II, section 37 of the Washington Constitution, stating "no act shall ever be revised or amended by mere reference to its title, but the act revised or the section amended shall be set forth at full length." The Washington Supreme Court held the MVET statute is constitutional because (1) the statute was a complete act because it was readily ascertainable from its text alone when which depreciation schedule would apply; (2) the statute properly adopted both schedules by reference; and (3) the statute did not render a straightforward determination of the scope of rights or duties established by other existing statutes erroneous because it did not require a reader to conduct research to find unreferenced laws that were impacted by the MVET statute. View "Black v. Cent. Puget Sound Reg'l Transit Auth." on Justia Law

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The First Circuit reversed the judgment of the district court dismissing for want of jurisdiction under the Tax Injunction Act (TIA) this lawsuit asking that the district court enjoin the collection of certain Rhode Island tolls as violative of the Commerce Clause of the United States Constitution, holding that the TIA's prohibition stating that district courts shall not enjoin levy or collection of "any tax under State law" where a remedy may be had in state courts is inapplicable to the Rhode Island tolls.A Rhode Island statute authorized the Rhode Island Department of Transportation to collect from tractor-trailers certain tolls in order to pay for replacement, reconstruction, maintenance, and operation of Rhode Island bridges. Plaintiff trucking entities brought this lawsuit. The district court dismissed the lawsuit, concluding that it lacked jurisdiction under the TIA. The First Circuit reversed, holding the the tolls in this case were not a "tax" under the statute. View "American Trucking Ass'n v. Alviti" on Justia Law

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First Student, Inc., a school bus contractor, sought to reverse a Court of Appeals decision to affirm dismissal of its business and occupation ("B&O") tax refund action. At issue was whether First Student's transporting of students qualified as transporting persons "for hire" such that it made First Student subject to the public utility tax ("PUT") rather than the general B&O tax. The Washington Supreme Court found the meaning of "for hire" was ambiguous as used in the PUT, but resolved the ambiguity in favor of the long-standing interpretation that school buses were excluded from the definitions of "motor transportation business" and "urban transportation business" under RCW 82.16.010(6) and (12). The Court found that WAC 458-20-180 was a valid interpretation of the statute, and affirmed the Court of Appeals. View "First Student, Inc. v. Dep't of Revenue" on Justia Law

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Chapter 70 of the Wisconsin Tax Code governs the taxation of manufacturing and commercial companies aside from railroads and utilities. Chapter 76 governs the taxation of railroads and utilities, including air carriers, pipeline companies, and water conservation and regulation companies. The Code contains exemptions from the general property tax, including an exemption for “all intangible personal property,” which covers custom computer software. Manufacturing and commercial taxpayers generally qualify for the intangible personal property exemption; railroads and utilities do not and are the only taxpayers that Wisconsin requires to pay taxes on intangible property, including custom software. Union Pacific claimed the value of its custom software as exempt. The Department of Revenue audited Union Pacific and concluded that for the years 2014 and 2015, it owed $2,631,104.77 in back taxes and interest after disallowing that deduction. Union Pacific filed suit, arguing that the tax singles out railroads as part of an isolated and targeted group in violation of the Railroad Revitalization and Regulatory Reform Act of 1976, 49 U.S.C. 11501(b)(4). The Seventh Circuit affirmed summary judgment in favor of Union Pacific. The intangible property tax exempts everyone except for an isolated and targeted group of which railroads are a part. View "Union Pacific Railroad Co. v. Wisconsin Department of Revenue" on Justia Law

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The State of Washington taxes “motor vehicle fuel importer[s]” who bring large quantities of fuel into the state by “ground transportation,” Wash. Code 82.36.010(4), (12), (16). Cougar, a wholesale fuel importer owned by a member of the Yakama Nation, imports fuel over Washington’s public highways for sale to Yakama-owned retail gas stations located within the reservation. In 2013, the state assessed Cougar $3.6 million in taxes, penalties, and licensing fees for importing motor vehicle fuel. Cougar argued that the tax, as applied to its activities, is preempted by an 1855 treaty between the United States and the Yakama Nation that reserves the Yakamas’ “right, in common with citizens of the United States, to travel upon all public highways,” 12 Stat. 953. The Washington Supreme Court and the U.S. Supreme Court agreed. The statute taxes the importation of fuel, which is the transportation of fuel, so travel on public highways is directly at issue. In previous cases involving the treaty, the Court has stressed that its language should be understood as bearing the meaning that the Yakamas understood it to have in 1855; the historical record adopted by the agency and the courts below indicates that the treaty negotiations and the government’s representatives’ statements to the Yakamas would have led the Yakamas to understand that the treaty’s protection of the right to travel on the public highways included the right to travel with goods for purposes of trade. To impose a tax upon traveling with certain goods burdens that travel. View "Washington State Department of Licensing v. Cougar Den, Inc." on Justia Law

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Loos sued BNSF under the Federal Employers’ Liability Act for injuries he received while working at BNSF’s railyard. A jury awarded him $126,212.78, ascribing $30,000 to lost wages. BNSF asserted that the lost wages constituted “compensation” taxable under the Railroad Retirement Tax Act (RRTA) and asked to withhold $3,765 of the $30,000. The district court and the Eighth Circuit rejected the requested offset. The Supreme Court reversed. A railroad’s payment to an employee for work time lost due to an on-the-job injury is taxable “compensation” under the RRTA. RRTA refers to the railroad’s contribution as an “excise” tax, 26 U. S. C. 3221, and the employee’s share as an “income” tax, section 3201. Taxes under the RRTA and benefits under the Railroad Retirement Act, 45 U.S.C. 231, are measured by the employee’s “compensation,” which both statutes define as “any form of money remuneration paid to an individual for services rendered as an employee.” The Court noted similar results under the Federal Insurance Contributions Act and the Social Security Act. View "BNSF Railway Co. v. Loos" on Justia Law

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The Fourth Circuit affirmed the district court's order granting summary judgment to the City and the Foundation in an action alleging discriminatory taxation in violation of the Railroad Revitalization and Regulatory Reform Act of 1976. The court applied the factors in San Juan Cellular Tel. Co. v. Pub. Serv. Comm'n, 967 F.2d 683, 685 (1st Cir. 1992), and held that the City's storm water management charge was a fee, rather than a tax, and therefore was not subject to the Act's requirements. In this case, the charge was imposed by the City's legislative body, and the charge was part of a comprehensive regulatory scheme. View "Norfolk Southern Railway Co. v. City of Roanoke" on Justia Law