tax on train fuel

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tax on train fuel

Postby highrail » Wed Dec 10, 2014 9:29 am

Spotted this article in "governing magazine" on-line edition...I must admit I was not familiar with the topic and should be interesting to see what the court does.

The Trouble with Taxing Train Fuel

By Elaine S. Povich
"The U.S. Supreme Court today will consider whether Alabama’s 4 percent sales tax on fuel used by freight trains—a tax trucks and barges don’t have to pay—is inherently discriminatory and violates federal law.
While the case originated in Alabama, at least nine other states impose a full or partial sales tax on train fuel, including Arizona, Florida, Maine, Massachusetts, Minnesota, New Mexico, Oklahoma, Rhode Island and West Virginia, according to the State and Local Legal Center, which keeps track of court cases affecting states. Several of these states and others filed a “friend of the court” brief." ... -news.html
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Re: tax on train fuel

Postby Desertdweller » Mon Dec 15, 2014 4:48 pm

In most states, revenue gained from fuel tax is used to fund highway construction and maintenance. The highways are publicly-owned roads, supported by public taxes. Fuel taxes are therefore a form of user-taxes.

Railroads are generally not owned by the public at large, although their owners are certainly part of the public (but not necessarily from the state they operate in). Therefore, fuel taxes on railroads do not support the railroad's infrastructure. The public infrastructure used by the railroads (the road system) is supported by tax on highway vehicle fuel the railroad buys.

Since the railroads operate on privately-owned and maintained right of ways, it does not seem fair to me that they should be charged fuel taxes. To make matters worse, this tax goes to fund right of way maintenance for the railroads' direct competitor.

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Re: tax on train fuel

Postby GE45tonner » Mon Dec 15, 2014 6:53 pm

I don't think it's fair either. The fuel tax is generally meant to pay for highway construction, and up north in these liberal parts of the nation it is used to discourage road use and promote and pay public transportation. The private class one's don't use the roads and can't "use" public transportation so this is unfair.
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Re: tax on train fuel

Postby mkirsch » Fri Dec 19, 2014 10:58 am

This is not a road tax, this is a SALES tax, as stated in the quote.

I agree, charging the railroad ROAD tax is out of line. My thoughts on the sales tax are as long as it is applied equally to everyone...

What to they mean, truckers don't pay sales tax on their fuel? Every gallon of fuel sold at a truck stop has "Tax Incl." which also means sales tax.
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