Bill Makes Permanent Short Line Tax Credit

The budget and pandemic relief legislation adopted by Congress on Monday night will affect various transportation programs, including short line railroads.

The bill also makes permanent a tax credit for short line and regional railroads.

The credit in question is known as Section 45G and has been used by short lines and regional railroads to pay for infrastructure projects.

The tax credit supports private investment in improving and building infrastructure up to a $3,500 cap per short-line railroad mile.

The American Short Line and Regional Railroad Association has long fought to make the credit permanent. Until now, it had been subject to being reauthorized periodically.

The credit was created in 2005 and ASLRA said it has enabled its members to invest more than $5 billion in infrastructure projects, including rebuilding track that had deteriorated due to deferred maintenance and was on the brink of abandonment.

ASLRRA President Chuck Baker said in a statement that making the credit permanent will assure “long-term tax certainty.”

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