These are appeals from the findings and order of the State Board of Equalization and Assessment (State Board) dated August 15, 1990, denying claims for property tax relief submitted by various centrally assessed and locally assessed claimants. Pursuant to our order of September 17, 1990, the *567parties filed a “case stated” in accordance with Neb. Ct. R. of Prac. 5L (rev. 1989), separately setting forth the rulings of the State Board complained of by the appellants and the exceptions and contentions of the parties with respect to those issues.
The appellants are public service entities within the meaning of Neb. Rev. Stat. § 77-801.01 (Reissue 1990) and are centrally assessed for purposes of personal property taxation. Due to an identity of issues and counsel, we have consolidated the appeals of MAPCO Ammonia Pipeline, Inc. (case No. 90-871), Mid-America Pipeline Company (case No. 90-872), Trailblazer Pipeline Company (case No. 90-873), and Natural Gas Pipeline Company of America (case No. 90-874) for disposition.
Following our decision in Northern Natural Gas Co. v. State Bd. of Equal., 232 Neb. 806, 443 N.W.2d 249 (1989), cert. denied _ U.S. _, 110 S. Ct. 1130, 107 L. Ed. 2d 1036 (1990), but prior to our decision in Natural Gas Pipeline Co. v. State Bd. of Equal., 237 Neb. 357, 466 N.W.2d 461 (1991), the appellants appeared before the State Board requesting equalization of their real and personal property (1) with railroad rolling stock, which had been exempted from taxation by the passage of L.B. 7 on November 17, 1989 (codified at Neb. Rev. Stat. § 77-202(11) (Reissue 1990)), and (2) with center pivot and other irrigation systems used for agricultural purposes and equipment and machinery used for business purposes that had been excluded from the definition of real property by L.B. 1, also passed November 17, 1989 (now codified at Neb. Rev. Stat. § 77-103 (Reissue 1990)).
I
The record shows that the State Board convened on August 8, 1990, for the purpose of determining the value of the appellants’ property for 1990 and to equalize such valuations for tax purposes within the state. The evidence presented at the August 8 hearing consisted of essentially the same record as that considered by the State Board in 1988 and 1989. Dennis Donner, a manager in the property tax division of the Nebraska Department of Revenue, testified he was of the opinion that 75 percent of commercial and industrial personal property remained exempt from taxation in Nebraska in tax year 1990. *568In light of the passage of L.B. 7 on November 17, 1989, which exempted railroad rolling stock from taxation, the State Tax Commissioner did not value, assess, or tax any rolling stock of railroad or carline companies operating in Nebraska. The State Board also considered issues related to L.B. 1, which changed the statutory definition of “fixture.” The appellants contended that L.B. 7 and L.B. 1 were unconstitutional.
During the August 8 hearing, the State Board declined to grant the relief sought by the appellants and set the statewide equalization rate at 92.13 percent of actual value. The State Tax Commissioner subsequently adjusted the total taxable value of the appellants’ property and certified those values to the various counties using the 92.13-percent figure as determined by the State Board.
In its findings and order of August 15,1990, the State Board described the appellants’ requests as “purported claims for ‘equalization’ . . . which are, in fact, based on a request of the State Board to declare unconstitutional [certain] acts of the Nebraska Legislature ...” The State Board then found that it did not have jurisdiction to consider claims for equalization of property within a class of taxable property to property which is separately classified and exempted from taxation, and that the constitutionality of legislative acts granting exemptions from property taxation may not be raised before and decided by the State Board.
Although the State Board found it did not have subject matter jurisdiction to hear and decide various claims made based on the alleged unconstitutionality of certain legislative acts, several issues of this nature were presented to the State Board. These issues included the constitutionality of L.B. 7, pertaining to the classification of railroad rolling stock as tax exempt, and L.B. 1, which amended the statutory definition of “fixture.”
We held in Natural Gas Pipeline Co., supra at 371, 466 N.W.2d at 470, that the portion of L.B. 7 exempting railroad rolling stock from taxation was unconstitutional because the Legislature had
no reasonable basis for treating railroads differently from other common carriers; therefore, the distinction, as a *569classification and basis for an exemption from personal property tax, reflected in L.B. 7, result[ed] from special legislation, prohibited by Neb. Const, art. Ill, § 18, and violated] the uniformity clause of Neb. Const, art. VIII, § 1.
With respect to L.B. 1, the State Board found that
the Legislature has broad powers to define the nature of property for tax purposes, so long as the definitions established are reasonable. . . . [T]he Board further finds that the evidence presented shows that the valuation of irrigated agricultural land (real property), is subject to taxation, and reflects the value of the annexed portion of the irrigation system; and that the sprinkler arm and power unit used in center pivot irrigation (or the piping and power unit used in gravity irrigation) are not annexed to land (real property) and are thus easily and readily removable without injury to the real property. Therefore, these particular items constitute personal property which is reasonably excepted from the definition of real property under LB 1. This personal property is classified separately and exempted from taxation pursuant to Section 77-202(6) [(Reissue 1990)], as agricultural income-producing machinery and equipment, a classification of exempt personal property upheld as constitutional in Stahmer v. State, 192 Neb. 63, 218 N.W.2d 893 (1974). Accordingly, the State Board finds claimants [sic] contentions that LB 1 unconstitutionally exempts certain “real” property (i.e., center pivot irrigation equipment) to be both contrary to the evidence and erroneous as a matter of law.
In their assignments of error, the appellants contend the State Board erred (1) in holding that it had no statutory or constitutional authority or jurisdiction to rule on the appellants’ requests for relief, (2) in holding that L.B. 7 was constitutional, (3) in applying L.B. 1 and finding L.B. 1 constitutional, and (4) in failing to grant the appellants’ requests for relief based on the absence of uniformity and proportionality of taxation, in violation of Neb. Const, art. VIII, § 1. The appellants further contend the taxation of their *570property at 92.13 percent of actual value is in violation of the equal protection clause of U.S. Const, amend. XIV.
As the State Board now concedes, it did have jurisdiction to consider the appellants’ requests for relief in these cases. In Northern Natural Gas Co. v. State Bd. of Equal., 232 Neb. 806, 815, 443 N.W.2d 249, 255 (1989), we held that “in an application before the [State] Board, a taxpayer may employ any factual or legal argument in support of his, her, or its position requesting equalization, subject to the final determination of questions of law on a de novo basis by this court on appeal.”
The State Board also agrees that its finding that the portion of L.B. 7 exempting railroad rolling stock from taxation was constitutional was in error in view of our holding in Natural Gas Pipeline Co. v. State Bd. of Equal., 237 Neb. 357, 466 N.W.2d 461 (1991), that the portion of L.B. 7 exempting railroad rolling stock from taxation was unconstitutional.
The remaining issues in these appeals, therefore, involve (1) the constitutionality of L.B. 1 and (2) the validity of the appellants’ arguments that the taxation of their personal property under Nebraska law violates Neb. Const, art. VIII, § 1, and the equal protection clause of U.S. Const, amend. XIV.
II
Section 77-103, as amended by L.B. 1, provides:
The terms real property, real estate, and lands shall mean city and village lots and all other lands, and all buildings, fixtures, improvements, cabin trailers or mobile homes which shall have been permanently attached to the real estate upon which they are situated, mines, minerals, quarries, mineral springs and wells, oil and gas wells, overriding royalty interests and production payments with respect to oil or gas leases, units of beneficial interest in trusts, the corpus of which includes any of the foregoing, and privileges pertaining thereto, and pipelines, railroad track structures, electrical and telecommunication poles, towers, lines, and all items actually annexed to such property, and any interest *571pertaining to the real property or real estate.
The sole test for determining whether an item is a fixture or an improvement shall be whether there is actual annexation to the real property or real estate or something appurtenant thereto. Unless specifically enumerated in this section, real property and real estate shall not include machinery and equipment used for business purposes or center pivot or other irrigation systems of a type used for agricultural or horticultural purposes.
(Amendatory language emphasized.)
The appellants contend L.B. 1 is unconstitutional (1) as an abuse of the Legislature’s power to define, in that it tends to nullify certain provisions of Neb. Const. art. VIII, §§ 1 and 2, and (2) as it creates an arbitrary classification, in violation of Neb. Const. art. Ill, § 18. In every constitutional challenge, it is presumed that all acts of the Legislature are constitutional, and all reasonable doubts are resolved in favor of constitutionality. Distinctive Printing & Packaging Co. v. Cox, 232 Neb. 846, 443 N.W.2d 566 (1989). Bearing this standard in mind, we conclude that L.B. 1 is unconstitutional in its entirety.
As we noted in Natural Gas Pipeline Co., supra, L.B. 1 changed the statutory definition of “fixture,” apparently to avoid the characterization of certain pipeline property as personal property rather than real estate, thus increasing the proportion of pipeline property presumably taxable as real estate under Northern Natural Gas Co. v. State Bd. of Equal., supra. (We note that in Northern Natural Gas Co., the taxpayers did not ask for any relief regarding real estate.)
Although the Legislature has broad power to define property for tax purposes, its power to define is limited, since (1) the Legislature cannot abrogate or contradict an express constitutional provision and (2) the legislative definition must be reasonable, and cannot be arbitrary or unfounded. See, State ex rel. Meyer v. Peters, 191 Neb. 330, 215 N.W.2d 520 (1974); Moeller, McPherrin & Judd v. Smith, 127 Neb. 424, 255 N.W. 551 (1934).
The Legislature’s power of definition may not be employed to nullify or circumvent the provisions of the Nebraska Constitution. In State ex rel. Meyer v. Peters, supra, we *572considered legislation purporting to exempt “household goods” from taxation pursuant to Neb. Const, art. VIII, § 2, which provided: “Household goods and personal effects, as defined by law, may be exempted from taxation in whole or in part. . . .” The definition of “household goods” in the taxing statute at issue in Peters, however, included “major appliances either attached or detached to real property.” See § 77-202(l)(d) (Reissue 1971). In other words, the statute purported to exempt property which would, under the common law of fixtures, be considered real estate. In holding that the Legislature could not constitutionally exempt such fixtures from taxation, we recognized the difficulty inherent in granting the Legislature unbridled definitional powers:
Any definitional powers given to the Legislature are prefixed and limited. The power to define household goods and personal effects necessarily is limited to those articles which ordinarily would be understood to be embraced within that term. Certainly, it cannot be interpreted to give the Legislature power to include air-conditioning systems, furnaces, automobiles, or real estate within the term “household goods and personal effects.” Since there must be a limit to such powers, it is reasonable to find the common law concepts serve as guides.
State ex rel. Meyer v. Peters, supra at 334, 215 N.W.2d at 524.
Similarly, in Moeller, McPherrin & Judd v. Smith, supra, the Legislature attempted to tax various items of intangible personal property as tangible personal property merely by defining them as such. This court struck down the attempted redefinition, observing:
Section 77-104, Comp. St. 1929, which House Roll No. 9 purports to amend, provided that tangible property included all personal property possessing a physical existence, but excluding money, and then defined intangible property as all other personal property, including money. Section 2 of House Roll No. 9 attempts to amend this by providing that tangible property shall consist of two classes, and that class 1 shall be all personal property possessing a physical existence, and then *573provides that class 2 of tangible property shall include stocks, notes, securities of foreign countries, accounts, judgments, liens of any kind, bonds, and all demands for labor, or other valuable thing, due or to become due. This introduces a new query, which is: May a legislature, under the guise of defining a word, do so with a definition which contravenes our Constitution, and which is not true or legal in fact? ...
Can the legislature define and designate as tangible that which is, in fact and in truth, intangible? It may be admitted that the legislature has power to define words used by it, but is this an unlimited power, or is it subject to a reasonable construction? ... In our opinion, there is a limit to the legislature’s power to nullify and circumvent constitutional provisions by putting an arbitrary, but improper and unfounded, definition upon a certain word.
Moeller, McPherrin & Judd v. Smith, supra at 432-33, 255 N.W. at 555-56.
The definition found in § 77-103, as amended, tends to nullify or circumvent a provision of the Nebraska Constitution, in that Neb. Const, art. VIII, § 2, provides, “The Legislature may classify personal property in such manner as it sees fit, and may exempt any of such classes, or may exempt all personal property from taxation.” (Emphasis supplied.) In this case, the Legislature has not so much “classified” certain items of personal property as it has arbitrarily declared the personal property owned by an unfavored group of taxpayers to be “fixtures,” so that it is presumably taxable as real estate under our decision in Northern Natural Gas Co. v. State Bd. of Equal., 232 Neb. 806, 443 N.W.2d 249 (1989). Here, the Legislature has attempted to define and designate as a “fixture” that which is, in fact and in truth, personal property and has gone beyond the bounds of its legitimate powers under our Constitution in doing so.
In any event, personal property and real property are both “tangible property” under Nebraska law and must be equalized and taxed uniformly pursuant to Neb. Const, art. VIII, § 1. See, Natural Gas Pipeline Co. v. State Bd. of Equal., 237 Neb. 357, 466 N.W.2d 461 (1991); Banner County v. State Board of *574Equal., 226 Neb. 236, 411 N.W.2d 35 (1987); Kearney Convention Center v. Board of Equal., 216 Neb. 292, 344 N.W.2d 620 (1984); Grainger Brothers Co. v. Board of Equalization, 180 Neb. 571, 144 N.W.2d 161 (1966).
Neb. Const, art. Ill, § 18, provides that “where a general law can be made applicable, no special law shall be enacted.” A legislative act can violate Neb. Const, art. Ill, § 18, as special legislation (1) by creating a totally arbitrary and unreasonable method of classification or (2) by creating a permanently closed class. Haman v. Marsh, 237 Neb. 699, 467 N.W.2d 836 (1991). The classification set forth in § 77-103, as amended, also is unconstitutional under article III, § 18, because it is not based on a real and substantial difference between “machinery and equipment used for business purposes or center pivot or other irrigation systems of a type used for agricultural or horticultural purposes” and similar machinery and equipment used for other purposes.
In State ex rel. Douglas v. Marsh, 207 Neb. 598, 608-09, 300 N.W.2d 181, 187 (1980), we held:
While it is true that the Legislature may classify where reasonable ... it may not do so in an arbitrary manner. In City of Scottsbluff v. Tiemann, [185 Neb. 256, 266, 175 N.W.2d 74, 81 (1970)], we specifically said: “It is competent for the Legislature to classify objects of legislation and if the classification is reasonable and not arbitrary, it is a legitimate exercise of legislative power. [Citation omitted.] The classification must rest upon real differences in situation and circumstances surrounding members of the class relative to the subject of the legislation which renders appropriate its enactment. [Citations omitted.] The power of classification rests with the Legislature and cannot be interfered with by the courts unless it is clearly apparent that the Legislature has by artificial and baseless classification attempted to evade and violate provisions of the Constitution prohibiting local and special legislation. [Citation omitted.] A legislative classification, in order to be valid, must be based upon some reason of public policy, some substantial difference of situation or circumstances, that would *575naturally suggest the justice or expediency of diverse legislation with respect to the objects to be classified. Classifications for the purpose of legislation must be real and not illusive; they cannot be based on distinctions without a substantial difference. [Citations omitted.]” (Emphasis in original.)
See, also, Distinctive Printing & Packaging Co. v. Cox, 232 Neb. 846, 443 N.W.2d 566 (1989).
In § 77-103, as amended by L.B. 1, the classification of agricultural and business machinery is based solely on use. In State ex rel. Meyer v. McNeil, 185 Neb. 586, 177 N.W.2d 596 (1970), this court was presented with the question of whether agricultural income-producing machinery and equipment used by any business which was required by law to report taxable income pursuant to the Internal Revenue Code constituted a reasonable classification for purposes of taxation. In that case, the Legislature attempted to separately classify for taxation purposes certain agricultural income-producing machinery and equipment. This method would have provided a different value for personal property specified in the act from that applied to all other tangible property in the same class.
In McNeil, supra, we observed that the establishment of two methods of valuation of property in the same class for taxation purposes results in a want of uniformity, contrary to Neb. Const, art. VIII, § 1. We held:
We necessarily find that the purported classification of property for tax purposes contained in the act does not rest on reasons of public policy, or any substantial difference of situation or circumstance that naturally suggest the justice or expediency of diverse legislation with respect to the objects classified. It is therefore an attempt to create a classification within a classification without any reasonable grounds for so doing other than to secure advantages for those falling within the purview of the act. It is violative of the uniformity provisions of Article VIII, section 1, of the Constitution. It is in effect special legislation in violation of Article III, section 18, of the Constitution.
McNeil, supra at 589-90, 177 N.W.2d at 599.
*576In the present case, “machinery and equipment used for business purposes or center pivot or other irrigation systems of a type used for agricultural or horticultural purposes” are tangible property which must be taxed uniformly both as to valuation and rate of tax. As we observed in McNeil, supra at 588-89, 177 N.W.2d at 598:
There can be no difference in the method of determining valuation or the rate of tax to be imposed unless the separate classification rests on some reason of public policy, some substantial difference of situation or circumstance that would naturally suggest the justice or expediency of diverse legislation with respect to the objects to be classified.
When the Legislature attempted to remove pipelines from the category of personal property after our decision in Northern Natural Gas Co. v. State Bd. of Equal., 232 Neb. 806, 443 N.W.2d 249 (1989), it apparently realized that its new test to determine what is real property would include center pivot or other irrigation systems used for agriculture or horticulture. The Legislature excluded irrigation systems used for these purposes from the definition of “real property,” leaving them exempt “personal property” under § 77-202(6) (Reissue 1990) as “ [agricultural income-producing machinery and equipment.” The classification is not based on a real and substantial difference between “machinery and equipment used for business purposes or center pivot or other irrigation systems of a type used for agricultural or horticultural purposes” and the same machinery and equipment used for other purposes. The legislation is, therefore, violative of Neb. Const, art. Ill, § 18.
Ill
Since both L.B. 1 and L.B. 7 are unconstitutional, we make four observations: (1) The ratio of “real” to “personal” pipeline property remains essentially unchanged since our decision in Northern Natural Gas Co. v. State Bd. of Equal., supra; (2) personal property and real property are both “tangible property” under Nebraska law and must be equalized and taxed uniformly pursuant to Neb. Const. art. VIII, § 1; (3) *577the State Board erred in failing to assess or tax the rolling stock of railroad or carline companies operating in Nebraska in 1990; and (4) the appellants are entitled to the same tax treatment as the railroads, carline companies, and other centrally assessed taxpayers pursuant to Neb. Const, art. VIII, § 1, and our decisions in Northern Natural Gas Co., supra, and Natural Gas Pipeline Co. v. State Bd. of Equal., 237 Neb. 357, 466 N.W.2d 461 (1991).
To what relief are these taxpayers entitled? The appellants contend they should be “equalized” at zero percent for 1990 because the Tax Commissioner did not value, assess, or tax any rolling stock of railroad or carline companies operating in Nebraska in 1990. We conclude that this proposed remedy is inappropriate.
Equalization is the process of ensuring that all taxable property is placed on the assessment rolls at a uniform percentage of its actual value. See, Yellowstone Pipe Line Co. v. State Bd. Equal., 138 Mont. 603, 358 P.2d 55 (1960), cert. denied 366 U.S. 917, 81 S. Ct. 1095, 6 L. Ed. 2d 241 (1961). As we said in Natural Gas Pipeline Co., supra at 366, 466 N.W.2d at 467, “The purpose of equalization of assessments is to bring the assessment of different parts of a taxing district to the same relative standard, so that no one of the parts may be compelled to pay a disproportionate part of the tax.” Accord, Gordman Properties Co. v. Board of Equal., 225 Neb. 169, 403 N.W.2d 366 (1987); Hacker v. Howe, 72 Neb. 385, 101 N.W. 255 (1904). The process of equalization, therefore, cannot be applied to property that is not taxed. The appellants’ remedy in this case, although based on the uniformity and proportionality requirement of Neb. Const, art. VIII, § 1, does not involve “equalization.” Any language in our opinion in Northern Natural Gas Co., supra, which might be read as implying the contrary is hereby disapproved.
IV
The issues raised in these appeals have evolved from the decision of the U.S. Court of Appeals for the Eighth Circuit in Trailer Train Co. v. Leuenberger, 885 F.2d 415 (8th Cir. 1988), which construed § 306(l)(d) of the Railroad Revitalization and *578Regulatory Reform Act of 1976, Pub. L. 94-210, 90 Stat. 31, 54, codified as amended at 49 U.S.C. § 11503(b)(4) (1988) (the 4-R Act). Section 306(l)(d) prohibits the states from imposing a tax on transportation property when the tax “results in discriminatory treatment of a common carrier by railroad....” The federal court considered personal property tax exemptions in determining whether there was discriminatory tax treatment of railroads in the Nebraska tax structure, and ultimately concluded that when tax exemptions applied to three-fourths of the commercial and industrial property in Nebraska, and did not apply to railcars, the tax system in Nebraska discriminated against Trailer Train in violation of.§ 306(l)(d) of the 4-R Act. For that reason, in Trailer Train Co., the State of Nebraska was enjoined from “collection of the discriminating tax,” 885 F.2d at 418, but was not prohibited from levying a lawful nondiscriminatory tax on a common carrier by railroad. The record shows that the same illegally discriminatory tax system that was at issue in Trailer Train Co., supra, Northern Natural Gas Co., supra, and Natural Gas Pipeline Co., supra, existed during the 1990 tax year.
U.S. Const, art. VI, cl. 2, the supremacy clause, provides that the U.S. Constitution “and the Laws of the United States which shall be made in Pursuance thereof . . . shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.” The supremacy clause of the U.S. Constitution binds the several states, subordinates state law; whether constitutional, statutory, or judicially enunciated, to a congressional enactment; and supersedes state law which conflicts with federal law. Chapman v. Union Pacific Railroad, 237 Neb. 617, 467 N.W.2d 388 (1991); State ex rel. Douglas v. Karnes, 216 Neb. 750, 346 N.W.2d 231 (1984). Cf., Northern Natural Gas Co. v. State Bd. of Equal., 232 Neb. 806, 443 N.W.2d 249 (1989); State Bank v. Endres, 109 Neb. 753, 192 N.W. 322 (1923). In other words, federal law controls over state law, including state constitutional law.
Applying this fundamental principle in Northern Natural Gas Co. v. State Bd. of Equal., supra, we concluded that disproportionality in taxation within a class of property *579required this court to
correct [a] constitutional inequity by lowering the complaining taxpayer’s valuation to such an extent so as to equalize it with other property in the state. [Citations omitted.] This being the case, no logical reason exists why the same requirement of valuation reduction should not be imposed when the disproportionality is brought about by a final judgment of the federal court [Trailer Train Co., supra] exempting the personal property of the railroads and car companies from the imposition of a state tax.
232 Neb. at 815, 443 N.W.2d at 256. At this point, we note that in characterizing the federal court’s action as “exempting” the property in question, we recognized only that the federal court had enjoined the collection of the particular tax that had been levied that year. Although a court may have the power to enjoin the collection of a tax, as was done in Trailer Train Co., courts do not have jurisdiction to grant tax exemptions. In Northern Natural Gas Co., supra, we did not “exempt” the appellants’ personal property from taxation, but remanded the matter to the State Board, noting that the appellants’ unitary value, including both real and personal property, might need to be adjusted so as to achieve uniformity and proportionality of taxation in compliance with Neb. Const, art. VIII, § 1.
The situation presented to us in Northern Natural Gas Co., supra, was similar to that in State Bank v. Endres, supra, where the plaintiff, State Bank of Omaha, sought to enjoin the collection of taxes assessed against it under the provisions of Comp. St. § 5887(1922).
In 1921, the Legislature classified property subject to taxation into two groups — tangible and intangible. Tangible property was required to be listed at its true value and assessed upon the mill rate levy. Intangible property, with certain exceptions, was required to be listed at its true value, and a tax was levied thereon at 25 percent of the mill rate levied upon tangible property. Regarding shares of stock in banking corporations, § 5887 required the officers of banks, loan and trust companies, or investment companies to deliver to the county assessor a sworn statement showing the number of shares of stock held by each person, the names and residences *580of the stockholders, and the value of the stock. It was the duty of the assessor to assess the capital stock at the same rate as tangible property was assessed in the taxing district where the principal place of business of the bank was located. As the Endres court noted, the Legislature plainly intended to classify certain intangible property (bank stock) and place it for taxation purposes upon the same basis as tangible property, and the shares of stock in national banks were placed on the same basis as shares of stock in state banks.
At the time Endres was decided, federal law provided that state taxation of shares in the national banks “shall not be at a greater rate than is assessed upon other moneyed capital in the hands of individual citizens of such State . . . .” U.S. Rev. Stat. § 5219 (2d ed. 1878). In Merchants’ Natl. Bank v. Richmond, 256 U.S. 635, 41 S. Ct. 619, 65 L. Ed. 1135 (1921), the Court held that “moneyed capital in the hands of individual citizens” included bonds, notes, and other evidences of indebtedness in the hands of individuals, which were shown to come materially into competition with the national banks in the loan market.
Under § 5887, therefore, the stock of state and national banks located in Nebraska was being taxed on the same basis as tangible property, while “other moneyed capital in the hands of individual citizens” was subject to the lower tax on intangible property. Accordingly, the Endres court found that “the method adopted by our legislature of taxing shares of stock in banks, in so far as it applies to shares of national banks, is beyond the power of the legislature,” as a violation of federal law. State Bank v. Endres, 109 Neb. 753, 757, 192 N.W. 322, 324 (1923).
Having concluded that the national banks could not lawfully be taxed on the same basis as tangible property, the court held that under Neb. Const, art. VIII, § 1, state banks could not be taxed on the same basis as tangible property:
While the legislature has the undoubted right to make a reasonable classification of intangible property for the purposes of taxation, it would seem clear that a classification, the effect of which would be to tax its shares of stock four times as much as the shares of a national bank, would be an unreasonable exercise of its power, and *581would be in violation of section 1, art. VIII of the Constitution, which, while giving the legislature power to classify intangible property, nevertheless requires that taxes shall be uniform as to class.
... [S]ection 5887, Comp. St. 1922, relating to the duty of the assessor in taxing shares of stock in banks, banking associations and trust companies, in so far only as it declares “such capital stock shall thereupon be listed and assessed by him at the same rate as tangible property . . .” is invalid as to national banks, because it conflicts with the act of congress forbidding states to tax shares of a national bank at a greater rate than is assessed upon other moneyed capital, and, with national banks excluded from its operation, it is also invalid as to state banks, because the latter would then be taxed at a higher rate than national banks, and therefore the taxation would conflict with that part of the state Constitution requiring taxes to be uniform as to class.
Endres, supra at 757-58, 192 N.W. at 324.
V
In the present case, the federal courts have determined that tax exemptions are to be considered in determining whether there has been discriminatory treatment under § 306(l)(d) of the 4-R Act. See Trailer Train Co. v. Leuenberger, 885 F.2d 415 (8th Cir. 1988). As discussed above, Nebraska’s system of ad valorem taxation discriminates against railroads and carline companies, in violation of federal law, because “[w]hen the exemptions apply to three-fourths of the commercial and industrial property in Nebraska, and do not apply to rail cars, the tax system in Nebraska discriminates against [owners of rolling stock] and violates § 306(l)(d) of the 4-R Act.” 885 F.2d at 418. The record before us shows that 75 percent of commercial and industrial personal property remains statutorily exempt from taxation.
As the State Board observes in its brief, the nontaxation of railroad rolling stock, which has given rise to the plethora of equalization claims presented before the State Board and this court in recent years, has resulted from the enforcement of the *582antidiscrimination provisions of § 306(l)(d) of the 4-R Act. The impermissible discrimination forming the basis for the federal court decisions interpreting and applying the 4-R Act, in turn, resulted solely from tax exemptions provided under Nebraska law to various types of property not owned by railroads or carline companies.
The State Board correctly notes that the exemptions challenged by the appellants as discriminatory under § 306(l)(d) of the 4-R Act, consisting of agricultural income-producing machinery ¿nd equipment, agricultural products, and business inventories exempted under § 77-202(6) through (9), were upheld as legitimate classifications of personal property in Stahmer v. State, 192 Neb. 63, 218 N.W.2d 893 (1974). In Stahmer, this court justified the partial exemption from taxation of an entire class of personal property, agricultural machinery, holding that the power to exempt personal property from taxation granted by the 1970 amendment to Neb. Const. art. VIII, § 2, to wit: “ ‘The Legislature may classify personal property in such manner as it sees fit, and may exempt any of such classes, or may exempt all personal property from taxation’ ” (emphasis in original), 192 Neb. at 67, 218 N.W.2d at 896, prevails over the uniformity requirement of Neb. Const, art. VIII, § 1, and is subject only, if at all, to the reasonableness of the classification of exempt property. Significantly, no issues of federal law were raised by the parties or considered by this court in Stahmer v. State.
The enforcement of § 306(l)(d) by the federal court’s enjoining the collection of taxes, and similar relief granted by this court pursuant to Neb. Const. art. VIII, § 1, has had the effect of making Nebraska’s system of taxation increasingly discriminatory as to the remaining taxpayers. A comparable situation was presented in Casey’s Gen. Stores v. Nebraska Liq. Cont. Comm., 220 Neb. 242, 369 N.W.2d 85 (1985), where we reconsidered Safeway Stores, Inc. v. Nebraska Liquor Control Commission, 179 Neb. 817, 140 N.W.2d 668 (1966), in which this court upheld the constitutionality of a statute exempting hotels with more than 25 sleeping rooms from the statutory restriction that no person could have a beneficial interest in more than two liquor licenses. In Safeway Stores, Inc., we *583reasoned that the classification tended to promote stability in the liquor trade and temperance by curbing a threatened monopoly by chain stores. However, by the time this court heard Casey’s Gen. Stores, supra, the Legislature had expanded the exemptions to include certain restaurants, some cities, and selected bowling alleys. In Casey’s Gen. Stores, we concluded that the expanded exemptions rendered the reasoning in Safeway Stores, Inc., obsolete, as it could no longer be said that the exemptions protected Nebraska operations. Therefore, in Casey’s Gen. Stores, we concluded that the liquor license prohibitions violated the equal protection clause of U.S. Const, amend. XIV.
In the present case, Nebraska’s failure to correct illegal discrimination in its tax structure has caused an increasing concentration of the tax burden on a shrinking group of taxpayers. We conclude that our reasoning in Stahmer v. State, supra, is now obsolete in light of subsequent developments in federal law, particularly the enactment of § 306 of the 4-R Act, effective in 1979, and numerous court decisions interpreting that legislation. As Judges White and Fahrnbruch observed in their concurring opinion in Natural Gas Pipeline Co. v. State Bd. of Equal., 237 Neb. 357, 466 N.W.2d 461 (1991), even if Nebraska’s present classification of property as exempt and not exempt was to be found valid under the Nebraska Constitution, the system could not withstand muster under federal law. Federal law has eviscerated the portion of Neb. Const. art. VIII, § 2, that was at issue in Stahmer v. State. Accordingly, Stahmer v. State is overruled.
VI
It is obvious that in order to reach any meaningful resolution of the problem presented to us, this court must address the legality of the exemption of three-fourths of the commercial and industrial property in Nebraska. See § 77-202(6) through (9). We determine that the appellants’ remedy in this case is not for their property to be “equalized” at zero percent of actual value, but for it to be taxed uniformly and proportionately in compliance with Neb. Const, art. VIII, § 1. In their apparent zeal to avoid taxation entirely, however, the appellants have not *584specifically questioned the constitutionality of the tax exemptions found in § 77-202.
In State v. Goodseal, 186 Neb. 359, 368, 183 N.W.2d 258, 263-64 (1971), cert. denied 404 U.S. 845, 92 S. Ct. 146, 30 L. Ed. 2d 82, this court held that although the parties ordinarily must raise constitutional issues before they will be considered on appeal, “where the invalidity of the act is plain, and such a determination is necessary to a reasonable and sensible disposition of the issues presented, we are required by necessity to notice the plain error in the premise on which the case was tried.” The same is true in this case.
Pursuant to § 77-202(1), household goods and certain property owned by nonprofit religious, educational, charitable, horticultural, or cemetery organizations is exempt from taxation. The validity of these exemptions has not been challenged in this court and, to our knowledge, has not been challenged in federal court. Section 77-202 further provides:
(6) Agricultural income-producing machinery and equipment shall be exempt from the personal property tax except: (a) Motor vehicles, as defined in section 60-301; (b) property assessed by the Tax Commissioner as provided in sections 77-601 to 77-623 [railroad property]; (c) property owned by parties deemed public service entities subject to the provisions of sections 77-801 to 77-803; and (d) any building or fixture, whether permanently attached to the land or not.
(7) Business inventory shall be exempt from the personal property tax.
(8) Feed, fertilizer, and farm inventory shall be exempt from the personal property tax.
(9) Grain, seed, livestock, poultry, fish, honeybees, and fur-bearing animals shall be exempt from the personal property tax.
In Trailer Train Co. v. Leuenberger, 885 F.2d 415 (8th Cir. 1988), the U.S. Court of Appeals condemned as discriminatory Nebraska’s constitutional and statutory scheme of taxing only 25 percent of personal property while exempting the remaining 75 percent and enjoined the State of Nebraska from collecting the discriminatory tax on railroad rolling stock. In Northern *585Natural Gas Co. v. State Bd. of Equal., 232 Neb. 806, 815, 443 N.W.2d 249, 256 (1989), this court held that “if the [State] Board arbitrarily undervalues a particular class of property so as to make another class of property disproportionately higher, or achieves the same result because of legislative action,” the complaining taxpayer was entitled to relief pursuant to Neb. Const. art. VIII, § 1. We also determined in Northern Natural Gas Co., supra at 815, 443 N.W.2d at 256, that the state, “by not taxing the personal property of railroads and car companies, although acting involuntarily and under compulsion of federal law, nevertheless, by complying with that mandate, has denied Enron equal protection of the law contrary to the 14th amendment to the U.S. Constitution.”
As in State Bank v. Endres, 109 Neb. 753, 192 N.W. 322 (1923), federal law has now rendered Nebraska state law invalid under the Nebraska Constitution. We hold that the property tax exemptions enumerated in § 77-202(6) through (9) are unconstitutional under Neb. Const, art. VIII, § 1, in that they prevent the levy of taxes “by valuation uniformly and proportionately upon all tangible property and franchises.”
VII
In light of the foregoing, the order of the State Board of Equalization and Assessment is reversed and the cause remanded with directions to assess the property of the appellants and equalize its value as required by article VIII, § 1, of the Nebraska Constitution and the applicable statutes.
Reversed and remanded for
FURTHER PROCEEDINGS.