IRS Begins Soliciting Comments on RR Tax Credit Regs

[Anonymous]

The Internal Revenue Service has begun soliciting comments from railroads, customers and others affected concerning drafting regulations covering the application of the new short line railroad tax credit for MOW expenditures.

The IRS regulations will determine how the credit is applied and calculated, among other things.

LC

[Anonymous]

Tax credits beat subsidies hands down. A dollar of tax credit is a dollar retained by the company, whereas a dollar spent as taxes then redistributed as a subsidy sometimes only returns as little as 0.30 cents on the dollar, with the bureaucracy taking 0.70.

[Anonymous]

What, no one wants to debate this topic? The idea of tax credits for maintenance expenses could be the biggest revolution to hit railroading since the advent of diesel electric traction.

[Anonymous]

The Tax Credit became law last month. Not much left to debate.

LC

[jeaton]

I agree that tax credits are a good approach to encourage businesses to undertake activities deemed to be in the interest to the general public. Of course, they aren't of any benefit to companies that don't turn a profit and consequently have no tax liability.

Jay

[Anonymous]

QUOTE: Originally posted by jeaton

I agree that tax credits are a good approach to encourage businesses to undertake activities deemed to be in the interest to the general public. Of course, they aren't of any benefit to companies that don't turn a profit and consequently have no tax liability.

Jay

The shortline tax credits are transferable, they can be sold to other entities which may have a tax liabillity they want to reduce. That way, even if a shortline has little or no tax liability, they can still derive some benefit from the deal by selling the credits.

[Anonymous]

QUOTE: Originally posted by futuremodal

QUOTE: Originally posted by jeaton

I agree that tax credits are a good approach to encourage businesses to undertake activities deemed to be in the interest to the general public. Of course, they aren't of any benefit to companies that don't turn a profit and consequently have no tax liability.

Jay

The shortline tax credits are transferable, they can be sold to other entities which may have a tax liabillity they want to reduce. That way, even if a shortline has little or no tax liability, they can still derive some benefit from the deal by selling the credits.

FM-

You need to check the legislation. The transfer provision was removed except that Vendors and Customers can invest in the short line property to receive the credit. Any such investment is deducted from the total credit available to the short line involved on an annual basis. The short line also cannot transfer the credits at a discount to their value under the legislation enacted.

LC

[gabe]

I really don't see anything particularly new here. The tax code is probably one of the most used forces to direct investment and to shape the landscape of American society.

If you really want to know what shapes American society, don't look at constitutional law, look at the tax code.

Gabe

P.S. I like short lines, think this bill helps them, thus, I think it is great.

[AntonioFP45]

Good!

Shortlines?

Do Class 1 railroads have something similar. After looking at some CSX mainline trackage, seems like it can use all the help it can get!!!!!!!!!!!!!!

[Anonymous]

QUOTE: Originally posted by AntonioFP45

Good!

Shortlines?

Do Class 1 railroads have something similar. After looking at some CSX mainline trackage, seems like it can use all the help it can get!!!!!!!!!!!!!!

No, the short lines lobbied hard for this legislation over several years. Class 1s sought and received a repeal of the 4.3 cent railroad fuel tax at the same time. That was not tied to any sort of tax credit.

LC