THE 45G SHORT LINE RAILROAD TAX CREDIT
- SMALL BUSINESSES INVESTING IN AMERICA'S TRANSPORTATION FUTURE -
Short Line Railroad Rehabilitation and Investment Act of 2015
Rep. Lynn Jenkins (R-KS) along with Representatives Earl Blumenauer (D-OR), Rodney Davis (R-IL), and Dan Lipinski (D-IL) have introduced H.R. 721, and Senators Mike Crapo (R-ID), Ron Wyden (D-OR), Jerry Moran (R-KS), Charles Schumer (D-NY), Johnny Isakson (R-GA), Bob Casey (D-PA), John Boozman (R-AR) and Richard Blumenthal (D-CT) have introduced S. 637 to extend the Short Line Tax Credit. Originally enacted in 2004, Section 45G creates a strong incentive for short line railroads to invest private sector dollars on freight railroad track rehabilitation. The credit expired at the end of 2014.
What This Legislation Will Do
The Short Line Tax Credit leverages private sector investment in rail infrastructure by providing a tax credit of 50 cents for every dollar spent on track improvements. The credit is capped based on a mileage-based formula. H.R. 721 and S. 637 propose the following:
- Extend 45G – Section 45G expired on December 31, 2014, and this bill will extend Section 45G for tax years 2015 and 2016.
- Eligibility for new railroads created after 2004 and before 2015 – Expenses to maintain short lines created after 2004 should qualify for 45G. This bill imposes a cutoff date of January 1, 2015, to cap the credit at a known number.
- Cap the Cost - As in previous years, the credit remains capped at the product of total miles of track and $3,500 per mile credit and has historically scored between $165 and $202 million per year
Broad Bi-Partisan Support
From the 111th through the 113th Congress, legislation to extend 45G was co-sponsored by over 250 Representatives and 51 Senators, with broad bi-partisan support. Supporters recognize that the credit creates jobs and preserves valuable transportation infrastructure in areas of the country that can ill-afford fewer freight alternatives.
The Case for Short Line Railroads
Over 550 short line railroads preserve nearly 50,000 miles of track that otherwise would have been abandoned. This track received little investment by its previous owners and must be upgraded and maintained if over 10,000 rail customers are to stay connected to the national main line rail network. These freight rail connections are critical to preserving the first and last mile of connectivity to factories, grain elevators, power plants, refineries, mines, and facilities that employ over 1 million Americans. While highway infrastructure is maintained by federal and state governments, freight rail infrastructure is maintained by private sector investments. Short lines use approximately 184 million gallons of fuel to move 10 million carloads of freight annually. Trucks would require 540 million gallons to move the same freight. Short lines save shippers 20% to 50% over comparable truck transportation. Short lines keep 30 million truckloads per year off the highway, saving billions per year in highway damage costs.
Click here to learn more about the crucial impact of the Short Line Tax Credit on railroads and communities across the United States.
Show Your Support for the Short Lines
House Supporters – To Co-Sponsor H.R. 721, contact:
Senate Supporters – To Co-Sponsor S. 637, contact:
Sponsors of Short Line Tax Credit Legislation
Sponsors of S. 637
Sponsors of H.R. 721 by State
Sponsors of H.R. 721 by District
Below is a list of H.R. 721 and S. 411 supporting documentation:
Supporting Voices in Congress
Various Congresspersons have issued statements, pledging support to the extension of section 45G. To view the text of these various statements, click on the Congressperson's name below.
The House Ways & Means Subcommittee on Select Revenue Measures held a hearing on April 26, 2012 on Certain Expiring Tax Provisions. Many members spoke in favor of extending the 45G Short Line Railroad Tax Credit. Below are links to their written statements.
References for Advocates of 45G
- 45G White Paper - A document stating the objectives and overview of the 45G tax credit; you may use for your own information or for congressional outreach.
- Section 45G as Currently Enacted - Document showing the legislative history and relevant statutory text of 26 USC 45G. Note: Not for tax or IRS compliance purposes. Seek professional tax advice before taking a tax position.
Short Line Success Stories
- Click here to view a compilation of before and after photos featuring projects made possible by the 45G credit.
- Read the endorsements for the Short Line Tax Credit written by short line operators and customers alike.
For more information please contact ASLRRA Washington Representatives Adam Nordstrom (email@example.com) or Maitland McManus (firstname.lastname@example.org) via email or by phone at 202-638-7790.