CSX Transp., Inc. v. Georgia State Bd. of Equalizatio, 552 U.S. 9 (2007)

In CSX Transportation, Inc. v. Georgia State Board of Equalization, the underlying dispute arose when CSX Transportation, a freight rail carrier operating in Georgia, faced a significant increase in its ad valorem tax liability. In 2001, the Georgia State Board of Equalization assessed CSX's tax liability at $4.6 million. However, in 2002, the State's appraiser employed a different methodology to evaluate CSX's property, resulting in an estimated market value of approximately $7.8 billion, which represented a 47 percent increase from the previous year. This led to an assessed value of CSX's property in Georgia of $514.9 million and a final tax bill of $6.5 million. CSX contended that this assessment violated the Railroad Revitalization and Regulatory Reform Act (4–R Act) by discriminating against railroads through higher taxation compared to other commercial properties. The procedural history of the case began when CSX filed a lawsuit in the United States District Court for the Northern District of Georgia, arguing that the 2002 tax assessment was discriminatory and violated the provisions of the 4–R Act. The case was subsequently appealed, and the Eleventh Circuit Court of Appeals reviewed the matter before it reached the Supreme Court of the United States on a writ of certiorari. The Supreme Court's decision addressed whether railroads could challenge not only the application of state valuation methods but also the methods themselves under the 4–R Act. The background context of this case is rooted in the 4–R Act, enacted by Congress in 1976 to prevent discriminatory taxation of railroad property and to support the struggling rail industry. The Act prohibits states from assessing railroad property at a higher ratio to its true market value than that of other commercial and industrial properties. This legal framework was crucial in shaping CSX's argument that Georgia's tax assessment practices were unfairly targeting railroads, thereby prompting the legal challenge that ultimately led to the Supreme Court's ruling.

Whether railroads may challenge state methods for determining the value of railroad property under the Railroad Revitalization and Regulatory Reform Act, in addition to how those methods are applied.

The judgment is reversed.