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When the U.S. Congress passed the American Taxpayer Relief Act, it also extended the 45G short line freight railroad tax credit.
Section 306 of the Act extends the tax credit until Jan. 1, 2014. In a written statement, Richard Timmons, president of the American Short Line and Regional Railroad Association acknowledged that the tax credit had helped the railroads invest $1.2 billion in infrastructure since 2005.
“Short line railroading is one of the most capital intensive industries in America. Short lines operate almost 50,000 miles of track,” said Timmons. “While competing highway infrastructure is maintained by federal and state governments, short line infrastructure is preserved by small companies. The 45G credit allows small railroads to improve railroad infrastructure that benefits the public by using more of what they earn, rather than giving it to the government.”
As an example, Timmons noted that the Railway Tie Association estimates that when the 45G credit is in effect, between 500,000 and 1.5 million additional railroad ties are installed each year.