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Big Break for Big, Small Rails  Reprint permission
Class 1 and shortline railroads received millions of dollars worth of tax breaks and incentives last week that they say will help win back market share from trucks. The massive corporate tax bill that the Senate passed will phase out a 4.3 cent per gallon fuel tax paid by all railroads into a general fund, a provision that railroads say puts the railroads at a competitive disadvantage with other transportation modes. The same legislation, which the president was expected sign, will provide millions in tax incentives for shortlines rail infrastructure. The provisions were part of a $5 billion tax relief bill, known as FSC/ETI, which repeals a portion of the U.S. tax code and provides incentives for U.S. companies to export goods overseas. "We're pleased that both the House and Senate have passed (FSC/ETI)," said Association of American Railroads President Edward R. Hamberger. "Railroads and barges are currently the only modes of transportation that pay a fuel tax into the general fund. Fuel taxes paid by other modes go to support their right-of-way while fuel-efficient, environmentally-friendly railroads pay virtually all of the costs to maintain and improve their infrastructure." The tax cut should save the railroads roughly $170 million per year, according to sources on Capitol Hill. Under a separate provision, short line railroads, will be able to obtain a tax credit of up to $350,000, depending on the amount of track involved. The legislation is considered a huge win for an industry that has struggled for years to upgrade their tracks to compete with trucks. "This is huge for us," said Keith Hartwell, a shortline industry lobbyist. "It will allow us to borrow more money to improve our infrastructure so that we can win back customers that we've been losing over the years to trucks."
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