WASHINGTON — Short line and regional railroads received an early Christmas gift with the passage of a government spending bill last week that included a five-year extension of a popular tax credit.
Last week, Congress passed a $1.4 trillion budget that included an extension of the Short Line Railroad 45G Tax Credit, first enacted in 2005 to help companies invest in maintenance and infrastructure. On Dec. 20, President Donald Trump signed the bill into law.
“This is a significant win for our industry, our employees, our suppliers, and the thousands of customers and communities that depend on us,” says Chuck Baker, president of the American Short Line and Regional Railroad Association. “Not since December 2015 have we been able to go into a calendar year knowing we have the tax credit in place. Having a three-year advance runway I hope will provide assurance that we can begin and complete significant projects using the credit.”
Since 2005, the tax credit has allowed short line railroads to privately invest over $4 billion. The tax credit expired in 2017. Last week’s extension extended the tax credit, retroactively, from 2018 through 2022.
