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As of Dec. 21, the likelihood that the short-line tax credit would be extended by an act of Congress before New Year’s Day didn’t look promising, according to an item published in the American Short Line and Regional Railroad Association’s (ASLRRA) “Views & News” newsletter issued on Dec. 22.

The Short Line Railroad Rehabilitation and Investment Act of 2011 (H.R. 721/S. 672) proposes to extend the Section 45G tax credit for six years from Dec. 31, 2011, through Dec. 31, 2017. The measure also would make qualified infrastructure expenditures by regionals and short lines created after 2005 (for taxable years 2005 through 2011) and before 2011’s end (for taxable years after 2011) eligible for the tax credit.

A “tax extenders” bill in Congress appeared to be the vehicle that would extend the 45G short-line tax credit beyond Dec. 31. But on Dec. 17, the Senate passed a two-month payroll tax extension that did not include a tax extenders measure, said Jeff Van Schaick of ASLRRA lobbying firm Chambers, Conlon & Hartwell L.L.C. in the news item.

“On Dec. 21, the House rejected the Senate bill and voted to go to conference to work out their differences,” he said. “It is unlikely that the tax extenders will be passed before the calendar year ends.”
 
There are two hold ups with the tax extenders legislation: how to cover the cost, which is estimated at $25 billion to $35 billion, with the 45G tax credits accounting for $165 million of that total, and which tax provisions to extend, he said.

“If it comes down to picking and choosing, each expiring provision will be weighed by how much support the provision has,” said Van Schaick.
 
The association and its lobbyists will end 2011 with a total of 243 co-sponsors in the House; H.R. 721 is the fifth-highest co-sponsored bill in the committee that has jurisdiction over tax issues, he said.

“However, we need to double-down on our outreach to our senators. Currently, 43 senators support S. 672,” said Van Schaick. “Increasing these [co-sponsor] numbers is increasingly important as both chambers may consider tax legislation early in 2012.”