Short-line tax credit on path to one-year extension, ASLRRA says

The Section 45G short-line tax credit appears headed for an extension that will cover tax year 2014, according to an item in the American Short Line and Regional Railroad Association's (ASLRRA) newsletter issued Dec. 12.

The Tax Increase Prevention Act of 2014 (H.R. 5771), a bill that would extend many expiring tax credits retroactively to the start of 2014, was passed by the House Dec. 3 and is pending in the Senate, according to Adam Nordstrom, a partner at ASLRRA's lobbying firm Chambers, Conlon and Hartwell L.L.C.

The bill would extend the Railroad Track Maintenance Credit for short lines through Jan. 1, 2015, covering expenditures paid or incurred in tax year 2014 beginning after Dec. 31, 2013. Originally enacted in January 2005, the Section 45G provision enables regionals and short lines to claim a tax credit of 50 cents for every dollar spent on infrastructure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.

If H.R. 5771 passes the Senate, the president is expected to sign it into law, said Nordstrom in the news item.

"This is the culmination of a two-year effort that saw our industry amass the support of 251 House cosponsors for H.R. 721 and 52 Senate cosponsors for S. 411, making these bills the second- and third-most cosponsored tax bills in their respective chambers," he said. "This [tax credit] provision supports over $300 million per year in infrastructure investments serving over 10,000 rail customers, and provides total credits against tax of between $165 and 200 million per year for short lines and their customers and suppliers in 49 states."