Attention railroaders, suppliers, contractors, customers and other short line supporters, the short line railroad tax credit has been extended through calendar years 2008 and 2009. Qualified expenditures will now earn credits through December 31, 2009.

The passing of the short line tax credit in the tax extenders package was a huge success for the railroad industry. The legislation passed not only extends the short line tax credit through December 31, 2009, it also provides relief from the alternative minimum tax, which has kept many short lines from utilizing the tax credit.

The text of Section 45G as amended is available here.

Bill Language as passed in the Emergency Economic Stabilization Act of 2008:

H.R. 1424

Division C-Tax Extenders and Alternative Minimum Tax Relief

Title III – Extension of Business Tax Provisions

Section 316. Railroad Track Maintenance

(a) IN GENERAL.—Subsection (f) of section 45G (relating to application of section) is amended by striking ‘‘January 1, 2008’’ and inserting ‘‘January 1, 2010’’.

(b) CREDIT ALLOWED AGAINST ALTERNATIVE MINIMUM TAX.—Subparagraph (B) of section 38(c)(4), as amended by this Act, is amended—

(1) by redesignating clauses (v), (vi), and (vii) as clauses (vi), (vii), and (viii), respectively, and

(2) by inserting after clause (iv) the following new clause: ‘‘(v) the credit determined under section 45G,’’.

(c) EFFECTIVE DATES.—

(1) The amendment made by subsection (a) shall apply to expenditures paid or incurred during taxable years beginning after December 31, 2007.

(2) The amendments made by subsection (b) shall apply to credits determined under section 45G of the Internal Revenue Code of 1986 in taxable years beginning after December 31, 2007, and to carrybacks of such credits.

In the 110^th Congress, the Short Line Railroad Investment Act of 2007 (S. 881, H.R. 1584) was introduced by the House and the Senate. The bill set the stage for the extension and AMT fixes. Members of Congress who supported these bills helped make the extension possible.

Below is a list of S. 881 and H.R. 1584 supporting documentation:  White papers, co-sponsor lists, bill language, statute text, etc.

• S. 881 – The text of the Short Line Railroad Investment Act of 2007 as introduced by Sen. Lincoln and Sen. Smith
• H.R. 1584 – The text of the Short Line Railroad Investment Act of 2007 as introduced by Rep. Pomeroy, Rep. Camp, and Rep. Moran of Kansas
• Customer Success Stories – A document providing brief success stories and endorsements of Section 45G from short line railroad customers
• Section 45G Extension White Paper – A two page document that explains the changes contained in S. 881 and H.R. 1584
• Current S. 881 and H.R. 1584 Co-Sponsors – A list of current co-sponsors, and contact information to be used by Members of Congress to co-sponsor the bill
• 2003 and 2004 Co-sponsors of H.R. 876 and S. 1703 – These Members of Congress supported the enactment of Section 45G in 2003 and 2004
• Text of Section 45G – The current text of Section 45G showing the proposed changes made by S. 881 and S. 1584
• House Co-Sponsor Map – A map showing the districts of H.R. 1584 co-sponsors shaded in blue
• House Delegation Co-Sponsor Map – A map showing the percentage of Representatives from each state that have co-sponsored H.R. 1584
• Senate Co-Sponsor Map – A map indicating support of Senators