CSX sues revenue department over increased property assessments

CSX Transportation is asking a federal court to throw out the railroad’s 2015 property tax bill that was calculated by the state of South Carolina in favor of a new tax bill to be written by the federal court.

In a cased filed Nov. 17 in U.S. District Court in Columbia, CSX accuses the state Department of Revenue of discriminatory treatment against a railroad carrier, contending the state’s use of an outdated statute is to blame for the $42.7 million property tax bill for 2015.

The civil suit seeks an immediate and permanent injunction against the property taxes on the grounds the state’s levy violates federal interstate commerce laws because the revenue department did not use the same formula to calculate property taxes for other commercial businesses in the state – just the railroad company.

Based in Virginia, CSX said in the court documents that DOR’s appraisal of the rail company’s property in the state has increased approximately 59.4 percent between 2007 to 2015. Citing a November 2006 state law — the South Carolina Real Property Valuation Reform Act — CSX contends in the suit that DOR cannot increase the appraised value of commercial and industrial real property more than 15 percent within a five-year period.

The law excludes from the 15 percent limit any property appraised by DOR using a formula called the unit valuation concept. DOR, by state law, uses the unit valuation concept to appraise railroad property, but does not use the scheme to appraise other commercial and industrial property in South Carolina, the court papers say.

That same law forbids imposing any tax that results in discriminatory treatment of a railroad, the lawsuit claims. Extending the appraisal increase limitation to other commercial and industrial property but denying it to the railroad company results in discriminatory treatment, according to court papers.

CSX is being represented by the Nelson Mullins Riley & Scarborough law firm, which declined to comment on the case. Department of Revenue spokeswoman Bonnie Swingle said DOR also does not comment litigation.

This story was originally published November 25, 2015 at 4:57 PM.