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Rail News: Rail Industry Trends

Enacted tax relief bill extends short-line tax credit, two transit tax provisions


On Friday, President Obama signed the Middle Class Tax Relief Act of 2010, which extends the short-line tax credit for two years as well as two public transportation tax provisions.

The measure extends short lines’ Section 45G tax credit for tax years 2010 and 2011. The American Short Line and Regional Railroad Association (ASLRRA) has lobbied Congress throughout 2010 to extend the tax credit, which expired on Dec. 31, 2009, after lobbying hard for an extension last year. Section 45G 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.

“This marks the last legislative step in a long and arduous two-year struggle to extend the 45G credit,” said ASLRRA President Richard Timmons in an announcement on the bill’s passage.

Meanwhile, the legislation extends the alternative fuels tax credit for transit operators through Dec. 31, 2011, according to the American Public Transportation Association (APTA). The tax credit, which had expired at 2009’s end, will be applied retroactively to cover alternative fuels purchased in 2010, APTA said. The measure allows transit agencies that use compressed natural gas and liquefied natural gas to receive a 50-cent tax credit per gallon.

The enacted bill also extends the transit commuter benefit level established under the American Recovery and Reinvestment Act through Jan. 1, 2012, according to APTA. The transit commuter pre-tax benefit was raised from $120 to $230 per month. If the measure hadn’t passed, the transit commuter benefit would have reverted back to $120 per month on Jan. 1, “effectively raising taxes on employers and transit riders,” APTA officials said in a prepared statement.

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More News from 12/20/2010