Supreme Court Protects Taxpayer From Discriminatory Property Taxation

December 4, 2007

This morning, the Supreme Court announced a unanimous 9-0 decision in CSX Transportation, Inc. v. Georgia State Board of Equalization, ruling in favor of a railroad seeking to challenge Georgia’s property tax assessment methods, a change which resulted in a 47 percent increase in its property tax bill over the previous year. The Tax Foundation filed a brief with the Supreme Court in support of CSX’s challenge.

The Tax Foundation’s brief argued that the federal 4-R Act allows railroads to challenge assessment methods as a way to prevent discriminatory taxation. “Discriminatory assessment methods cannot be shielded from legal challenge because Congress has exercised its power to limit states’ ability to use any conceivable method of assessing and taxing railroad transportation property.” We argued that the ability of taxpayers to challenge flawed property tax assessment methods is important for ensuring transparency and stability in the tax system.

Chief Justice John Roberts wrote the Court’s opinion, which echoed many of our arguments. “The total lack of textual support for Georgia’s position is not surprising,” the opinion states. “The dichotomy the State presses would eviscerate the statute by forcing courts to defer to the valuation estimate of the State, when discriminatory taxation by States was the very evil the Act aimed to ban.” The opinion also notes that “preventing courts from scrutinizing valuation methodologies would render [the 4-R Act] a largely empty command.”

The Supreme Court opinion in CSX can be read here.

The Tax Foundation’s brief in CSX and previous blog coverage can be read here.


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