A bill to amend the Internal Revenue Code of 1986 to modify the railroad track maintenance credit.
A bill to amend the Internal Revenue Code of 1986 to modify the railroad track maintenance credit.
Plain Language Summary
# S 1532 Summary: Railroad Track Maintenance Tax Credit **What It Does:** This bill would increase and expand a tax credit that helps railroad companies—particularly smaller "short line" railroads—pay for track maintenance. Currently, companies can claim up to $3,500 per year for each mile of track they own or maintain. The bill would nearly double this to $6,100 per mile, and would adjust this amount for inflation in future years. It would also expand which railroads can claim the credit by including those maintaining tracks they owned or leased as of January 1, 2024. **Who It Affects:** The primary beneficiaries would be smaller railroad operators and short line railroads that maintain their own tracks.
These credits reduce their tax burden, potentially freeing up money for infrastructure maintenance and improvements. Indirectly, this could benefit rural communities that depend on these railroads for freight transportation. **Current Status:** The bill is currently in committee, meaning it's being reviewed and discussed but has not yet been voted on by the full Senate. Senator Mike Crapo (R-Idaho) introduced the legislation.
CRS Official Summary
This bill increases the annual limit on the tax credit for qualified railroad track maintenance expenses (also referred to as the short line railroad tax credit) and expands eligibility for claiming the credit.Under current law, the tax credit is limited each tax year to $3,500 multiplied by the sum of the number of miles of railroad track owned or leased by the taxpayer (miles owned or leased) and the number of railroad track miles assigned to the taxpayer by a Class II or III railroad (miles assigned). This bill increases the annual limit to $6,100 multiplied by the sum of miles owned or leased and miles assigned. The $6,100 amount used in the calculation of the tax credit limit is adjusted for inflation for tax years beginning after 2025.The bill also expands eligibility for the tax credit to include gross expenses for maintaining railroad tracks owned or leased as of January 1, 2024. Under current law, the tax credit is limited to gross expenses for maintaining railroad tracks owned or leased as of January 1, 2015.
Latest Action
Read twice and referred to the Committee on Finance.