Creating the railroad reconstruction or replacement tax credit available against the individual and corporate income taxes, the franchise tax, the insurance premiums tax, and the moneys and credits tax, and including effective date and retroactive applicability provisions

This bill creates the railroad reconstruction or replacement tax credit available against the individual and corporate income taxes, the franchise tax, the insurance premiums tax, and the moneys and credits tax. Under the bill, for tax years beginning on or after January 1, 2024, but before January 1, 2032, a tax credit may be claimed equaling percent of qualified expenditures made by a railroad classified as class I or class II, not to exceed $3,000 per mile, multiplied by the number of miles of railroad track owned or leased within the state by the taxpayer for which the taxpayer made qualified expenditures upon during the applicable tax year. The bill defines “qualified expenditures” to mean the maintenance, reconstruction, or replacement of railroad infrastructure, including track, roadbed, bridges, and industrial leads and sidings, owned or leased by a class II or class III railroad in this state as of January 1, 2021. “Qualified expenditures” also includes new construction of industrial leads, switches, spurs, and sidings and extensions of existing sidings. Any credit in excess of the tax liability is not refundable under the bill, but the excess may be credited to the tax liability for up to the next five tax years. The bill repeals the tax credit from the Code on January 1, 2037, to account for a taxpayer crediting excess tax liability for up to five additional tax years or until depleted, whichever is earlier. The bill takes effect upon enactment and applies retroactively to tax years beginning on or after January 1, 2024.