The short-line tax credit — which had expired at 2011's end and remained in limbo throughout 2012 — now is retroactive to Jan. 1, 2012, and expires at 2013's end per a two-year extension.
Originally enacted in January 2005, the Section 45G provision enables regionals and short lines to claim a tax credit of 50 cents for every dollar spent on infrastructure improvements, up to a cap of $3,500 per mile of owned or leased track.
The tax credit helps fund more than $300 million worth of short-line infrastructure improvements annually, according to American Short Line and Regional Railroad Association (ASLRRA) estimates. In addition, between 500,000 and 1.5 million additional crossties are installed each year by small railroads because of the tax credit, per Railway Tie Association estimates.
"Since 2005, the 45G credit has helped small, community railroads and their customers reinvest over $1.2 billion dollars in preserving freight railroad infrastructure to serve customers and communities across America," said ASLRRA President Richard Timmons in a prepared statement. "Short line railroading is one of the most capital-intensive industries in America. While competing highway infrastructure is maintained by federal and state governments, short-line infrastructure is preserved by small companies."
Browse articles on American Short Line and Regional Railroad Association on Progressive Railroading
- Operation Lifesaver Inc. starts new chapter with Joyce Rose at the helm
- Crude oil and intermodal will drive rail traffic for BNSF over the long term
- Metrolink's DePallo plans to build on progress, develop long-term strategy
- RailTrends 2012 represented a full deconstruction of the North American rail industry — by Tony Hatch
- CREATE update: Grade crossing upgrades, separations and closures
- TriMet's Portland-Milwaukie project will add vital link to southeast destinations
- Union Pacific opens information technology center in Austin
- Marcellus and Utica shale drilling keeps railroads busy
- Carload Express creates Ohio short line to tap two eastern shales
- Grade crossing safety: Freight and passenger railroads take a multi-pronged approach
- High-speed rail is on a slower, but steady, track: HNTB
- Material handling and distribution equipment update
- Santa Clara VTA aims for succession planning success with IT department pilot