Burlington Northern Railroad v. Ragland

Steele Hays, Justice.

This case involves the attempted imposition of a use tax by the State of Arkansas on eighty-six railroad freight cars newly acquired by lease or purchase by the Burlington Northern and Kansas City Southern Railway Companies, and loaded for the first time in Arkansas with cargo destined for delivery outside the state. The court below found the tax valid and appellants challenge that holding as a violation of the commerce clause of the United States Constitution. On appeal, we reverse.

The Arkansas Compensating Tax Act of 1949 was enacted to compensate for sales taxes lost…