Railway Wins $2.2 Million Refund on Diesel Tax Deemed Invalid

Birmingham, Ala. was ordered to pay BNSF Railway Co. more than $2 million after a state court judge found the city levied an invalid sales and use tax on diesel fuel against the freight rail carrier.

Jefferson County Circuit Court Judge Robert Vance on Wednesday directed Birmingham to issue a refund check to BNSF for $1 million, plus interest of $1.2 million within 30 days. Vance found the city’s tax on BNSF’s purchases of diesel fuel was “parallel and derivative” to a tax imposed by the state that was previously found discriminatory against rail carriers. In addition, Vance said Birmingham’s ...