This educational guide is based on the linked primary sources. It is not a Court publication, is not affiliated with the Court, and is not legal advice.
In brief
Overview
The case concerns how to value railroad property for state tax purposes under Section 11501(b)(1) of the 4‑R Act.
Petitioner CSX argues that the stock‑and‑debt valuation method is unreliable and should not be used by Georgia.
According to Mr. Calvert, respondent Georgia maintains that subsection (b)(1) provides a narrow exception allowing the state to apply its chosen valuation methodology.
Background and question before the Court
According to Carter G. Phillips, congress enacted Section 11501(b)(1) to provide a specific formula for determining whether a state is unlawfully taxing railroad property.
According to CSX, the dispute centers on whether the state may use the stock‑and‑debt method versus other methods such as the unit rule for valuing railroad property.
What each side argues
Petitioner (CSX Transportation, Inc.)
CSX contends that the stock‑and‑debt method cannot yield a reliable estimate of railroad value.
CSX argues that the case forces the state to choose between the unit rule and summation approaches, which it opposes.
Respondent (Georgia State Board of Equalization)
According to Mr. Calvert, georgia asserts that subsection (b)(1) is a narrow exception to the general rule of federal non‑interference, allowing the state to apply its chosen valuation formula.
Amicus (United States)
The United States amicus argues that Congress did not create a right to obtain administrative review of the state's tax assessment.
According to Mr. Hallward-Driemeier, hallward‑Driemeier contends that deferring to the state's chosen methodology would undermine the protection Congress intended.
What happened at oral argument
Justice Alito asked whether it is realistic to calculate the true market value of CSX’s property with any degree of precision.
According to Justice Souter, justice Souter questioned whether deference should be limited to the state’s choice among multiple valuation methods and whether the state must provide a rational basis for its selection.
Justice Scalia asked whether the test proposed by Justice Souter for district‑court review should also apply to appellate review of that district‑court determination.
According to Chief Justice Roberts, chief Justice Roberts inquired whether any other valuation process could work in the same way as the methods under discussion.
What the Court decided
Why it matters
Terms to know
No glossary terms are available for this guide.
Primary sources
Read the source materials on the official site or open the immutable repository copy used for this guide.
- a10b452fddadfb261d75-r1-bc27c1219c7a7059.pdforal argument transcript
Guide generated September 22, 2026. Automated validation accepted this version.