One of the most significant accomplishments in recent legislative efforts in the rail industry is the October 2004 inception of the railroad rehabilitation federal tax credit program. The federal tax credit program, located at 26 USC 45G, was initially projected to increase investment in rail infrastructure by around $1 billion during the initial three years of the tax credit (2005, 2006, 2007). The tax credit is available only to short line railroads, many of which are located in rural low density areas that are highly dependent upon quality transportation services, the most efficient and least expensive alternative of which is typically rail. However, most people likely understand that short line railroads are not equally positioned concerning their taxable income. With the benefit of history and as the result of a December 2006 amendment to the federal 450 tax credit program, railroads without significant tax obligations of their own are much better positioned to benefit from the tax credit.
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"RAILROAD MAINTENANCE TAX CREDIT PROGRAM POISED TO HELP ALL SHORT LINE RAILROADS"Please download to view full document