Short-line tax credits. One, two or three more years? How about forever
Since the law was enacted in 2005, short lines have used tax credits to help offset the cost of infrastructure improvements. And from what I’ve heard over the years, they’re putting them to good use.
The short-line industry has spent months lobbying Congress to extend the law another three years so more Class IIs and IIIs can reap the credits’ benefits. The Short Line Railroad Investment Act of 2007 (H.R. 1584/S. 881), introduced earlier this year, proposes to extend the deadline as well as minimize the Alternative Minimum Tax's (AMT) impact on credits, provide eligibility for short lines formed in 2005 and 2006, and increase the mileage-based credit limitation from $3,500 to $4,500.
But for now, congressmen aren’t debating the pros or cons of H.R. 1584/S. 881. They’re focusing on the credits’ impending expiration date and including language on Section 45G in an “extenders package” — a bill that seeks to extend a number of soon-to-expire laws beyond Dec. 31, says Adam Nordstrom, a partner with short-line industry lobbying firm Chambers, Conlon & Hartwell L.L.C.
Instead of three years, the House has proposed a one-year extension and the Senate is considering two years. A conference committee likely will hammer out an agreed-upon extension. Stay tuned, Nordstrom tells me, because an extension could be forthcoming by Christmastime.
“If it’s one year, it gets harder for short lines to plan track materials,” says Nordstrom. “But each year means $115 million in credits.”
If short liners only get one more year, lobbyists will return to Capitol Hill next year seeking a longer extension or a law that makes the credits permanent. The short-line industry also will continue to pursue a resolution to the AMT issue and other proposals included in H.R. 1584/S. 881, says Nordstrom.
In other words, put out the fire now and build a new house with a stronger foundation later. Isn’t that how Congress typically operates? And isn’t that the approach short lines long have been left with to bolster their infrastructure? It’s time for a change. Here’s one vote for making the tax credits permanent.
Posted by: 
Jeff Stagl | Date posted: 12/6/2007
Comments
Posted by Adron on 12/12/2007 11:09:22 AM
Those mooches in Congress should pass it forever. The freight rail industry gets "railed" enough as it is. Give em' a break and let the freight industry do its business, without the intrusive taxation. As has been pointed out recently, infrastructure costs are going up, and a lot of investment needs to be made. The last thing the freight railroad needs is the damnable hand of taxation wrangled around their respective necks!
Posted by James Swidergal on 1/25/2008 2:56:52 PM
A question instead of a comment. If the EJE/CN deal materializes does the CN get to continue to take thetax credits assessed for the EJE. And does that apply to the DM&E/CPR deal as well?
