Page:BNSF Railway Company v. Michael D. Loos.pdf/17

14 tax base would sweep in nonrailroad income, including, for example, dividends, interest accruals, even lottery winnings. Shifting from “compensation” to “income” as the RRTA tax base would thus saddle railroad workers with more RRTA taxes.

Given the multiple flaws in Loos’s last ditch argument, we conclude that §104(a)(2) does not exempt FELA damages from the RRTA’s income and excise taxes.

In harmony with this Court’s decisions in Nierotko and Quality Stores, we hold that “compensation” for RRTA purposes includes an employer’s payments to an employee for active service and for periods of absence from active service. It is immaterial whether the employer chooses to make the payment or is legally required to do so. Either way, the payment is remitted to the recipient because of his status as a service-rendering employee. See 26 U. S. C. §3231(e)(1); 45 U. S. C. §231(h)(1).

For the reasons stated, FELA damages for lost wages qualify as RRTA-taxable “compensation.” The judgment of the Court of Appeals for the Eighth Circuit is accordingly reversed, and the case is remanded for proceedings consistent with this opinion. It is so ordered.