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Rail News: Rail Industry Trends

Proposed repeal of Illinois' rolling-stock tax exemption rattles freight-transportation alliance


Illinois Gov. Rod Blagojevich recently proposed a repeal of the state's rolling-stock tax exemption as part of a plan aimed at increasing business taxes $1.32 billion — much to the chagrin of transportation companies doing business in the state.

Since 1968, interstate transportation companies operating in Illinois have been exempt from paying sales tax on rail-car, truck, trailer, aircraft and bus purchases. Rolling-stock repairs and replacement parts also are tax exempt.

Wisconsin, Iowa, Missouri, Indiana and Kentucky also offer a rolling-stock sales-tax exemption, which is designed to prevent rail and freight-transportation job losses to other states.

Officials from the Illinois State Chamber of Commerce and the Illinois Rolling Stock Alliance — a coalition of 32 transportation companies — are opposed to the tax repeal, which they believe would increase the transportation industry's cost of doing business in the state $92 million during the first year.

"Wyoming repealed its tax exemption on rail-car repairs and it has backfired — the state has lost jobs because rail lines are now having their repairs handled outside Wyoming," said Joseph Ciaccio, president of alliance member Illinois Railroad Association, in a prepared statement. "Rail and truck transporters will always need to use Illinois' rail system and highways, but they don't need to buy their fleets here or make repairs here if they can save money by doing business across the border."

Contact Progressive Railroading editorial staff.

More News from 5/2/2003