Tax Extender Act would revive short-line tax credit

On Dec. 20, U.S. Sen. Orrin Hatch (R-Utah) introduced the Tax Extender Act of 2017 (S. 2256), which proposes to extend several tax credits — including the Section 45G short-line tax credit — that either expired at 2016's end or are set to expire on Dec. 31.

Expired since Dec. 31, 2016, the short-line tax credit would be extended to Dec. 31, 2018. The Section 45G provision allows regionals and short lines to claim a 50 cent tax credit for each dollar they spend on track rehabilitation and maintenance projects, up to a cap of $3,500 per mile of owned or leased track.

American Short Line and Regional Railroad Association officials remain optimistic that Congress soon will revive the Section 45G provision through a tax extenders' package, such as S. 2256. The tax credit has enabled small railroads to invest $4 billion in capital in infrastructure improvements since it was enacted in 2005, according to the association.

S. 2256 also would extend expired or expiring tax credits for cellulosic biofuel, various biodiesels, alternative vehicle refueling property, closed-loop biomass and facilities that produce electricity from wind. Referred to the Senate Finance Committee, the bill currently has 5 co-sponsors: Sens. Chuck Grassley (R-Iowa), Mike Crapo (R-Idaho), Pat Roberts (R-Kan.), John Thune (R-S.D.) and Johnny Isakson (R-Ga.).

More than 50 organizations recently sent a jointly signed letter to House and Senate leaders urging them to pass legislation that would extend key tax credit provisions. Those credits "impact sectors vital to the U.S. economy and support tens of thousands of jobs nationwide," the letter states.

The recently passed Tax Cuts and Jobs Act didn't include a permanent extension of the Section 45G tax credit.