Freight RAILCAR Act of 2025
Sponsored By: Representative LaHood
Introduced
Summary
10% tax credit for modernizing and replacing freight railcars would give rail owners a targeted tax incentive to buy new cars or upgrade existing ones. The credit would be nonrefundable, capped at 1,000 qualified railcars per taxpayer per year, and available for three years after enactment.
Show full summary
- Freight owners: To qualify a new replacement car must meet strict rules. It must replace two scrapped cars and achieve a significant improvement such as at least an 8 percent gain in capacity or fuel efficiency or meet specified Association of American Railroads (AAR) or Pipeline and Hazardous Materials Safety Administration (PHMSA) performance standards.
- Manufacturers and repair shops: The credit applies to both newly built replacement railcars and capitalized modernization work, which would likely increase demand for production and modernization services for up to three years.
- Tax and finance professionals: The proposal denies double benefits, reduces a railcar's tax basis by the credit amount, applies special sale leaseback and syndication timing rules, and excludes entities tied to state owned enterprises. The Treasury must report on credit use and outcomes within three years.
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Bill Overview
Analyzed Economic Effects
2 provisions identified: 1 benefits, 1 costs, 0 mixed.
10% credit to modernize freight railcars
This bill would create a nonrefundable 10% business tax credit to modernize freight railcars. It would cover costs paid and property placed in service after December 31, 2024, and let you count up to 1,000 railcars per year. Railcars must be acquired or modernized after enactment and either boost capacity or fuel efficiency by at least 8%, or meet AAR S-286 or PHMSA HM-251/251C standards, be built in a qualified facility, and not have already received this credit. A new replacement railcar would qualify only if it replaces two of your railcars that were in service in the last 48 months and were scrapped and removed from the AAR Umler System during the year. Some state-owned enterprises would be ineligible, the credit would end three years after enactment, and double benefits would not be allowed.
Credit timing and basis rules for railcars
If you claim this credit, you would have to reduce the railcar’s tax basis by the credit amount. That would lower future depreciation and can raise taxable gain on sale. If you sell and lease back a railcar within three months, the credit would not start until the leaseback use date (with a special 24‑month rule for multi‑railcar placements). If a lessor sells a railcar within three months and the user stays the same, the placed‑in‑service date would be the date of the last sale (with a special 12‑month rule for multi‑railcar placements). These timing rules could delay when you can claim the credit.
Sponsors & CoSponsors
Sponsor
LaHood
IL • R
Cosponsors
Rep. Schneider, Bradley Scott [D-IL-10]
IL • D
Sponsored 2/11/2025
Hudson
NC • R
Sponsored 2/11/2025
Sewell
AL • D
Sponsored 2/11/2025
Rep. Murphy, Gregory F. [R-NC-3]
NC • R
Sponsored 2/11/2025
Van Duyne
TX • R
Sponsored 2/11/2025
Rep. Valadao, David G. [R-CA-22]
CA • R
Sponsored 2/11/2025
Nehls
TX • R
Sponsored 2/11/2025
Bost
IL • R
Sponsored 2/11/2025
Hern (OK)
OK • R
Sponsored 2/11/2025
Rep. Miller, Carol D. [R-WV-1]
WV • R
Sponsored 2/11/2025
Rep. Van Orden, Derrick [R-WI-3]
WI • R
Sponsored 2/11/2025
Rep. Carey, Mike [R-OH-15]
OH • R
Sponsored 2/11/2025
Rep. Carter, Troy A. [D-LA-2]
LA • D
Sponsored 2/11/2025
Bishop
GA • D
Sponsored 2/11/2025
Rep. Boyle, Brendan F. [D-PA-2]
PA • D
Sponsored 2/11/2025
Rep. Bice, Stephanie I. [R-OK-5]
OK • R
Sponsored 2/11/2025
Rep. Weber, Randy K. Sr. [R-TX-14]
TX • R
Sponsored 2/11/2025
Rep. Bacon, Don [R-NE-2]
NE • R
Sponsored 2/11/2025
Ciscomani
AZ • R
Sponsored 2/11/2025
Bonamici
OR • D
Sponsored 2/11/2025
Hunt
TX • R
Sponsored 2/11/2025
Rep. Westerman, Bruce [R-AR-4]
AR • R
Sponsored 2/11/2025
Ellzey
TX • R
Sponsored 2/11/2025
Rep. Titus, Dina [D-NV-1]
NV • D
Sponsored 2/11/2025
Rep. Panetta, Jimmy [D-CA-19]
CA • D
Sponsored 2/11/2025
Rep. Moran, Nathaniel [R-TX-1]
TX • R
Sponsored 2/11/2025
Rep. Williams, Roger [R-TX-25]
TX • R
Sponsored 2/11/2025
Rep. Rouzer, David [R-NC-7]
NC • R
Sponsored 2/11/2025
Crawford
AR • R
Sponsored 2/11/2025
Rep. Sánchez, Linda T. [D-CA-38]
CA • D
Sponsored 2/11/2025
Rep. Miller-Meeks, Mariannette [R-IA-1]
IA • R
Sponsored 2/11/2025
Rep. Davids, Sharice [D-KS-3]
KS • D
Sponsored 2/11/2025
Goldman (TX)
TX • R
Sponsored 2/11/2025
Rep. Rogers, Mike D. [R-AL-3]
AL • R
Sponsored 2/11/2025
Rep. Diaz-Balart, Mario [R-FL-26]
FL • R
Sponsored 2/11/2025
Rep. Mann, Tracey [R-KS-1]
KS • R
Sponsored 2/11/2025
Gonzales, Tony
TX • R
Sponsored 2/11/2025
Rep. Fong, Vince [R-CA-20]
CA • R
Sponsored 2/11/2025
Cuellar
TX • D
Sponsored 2/11/2025
Pfluger
TX • R
Sponsored 2/11/2025
Rep. Gooden, Lance [R-TX-5]
TX • R
Sponsored 2/12/2025
Wied
WI • R
Sponsored 2/12/2025
Babin
TX • R
Sponsored 2/24/2025
Craig
MN • D
Sponsored 2/25/2025
Rep. Hinson, Ashley [R-IA-2]
IA • R
Sponsored 2/27/2025
Rep. Larsen, Rick [D-WA-2]
WA • D
Sponsored 3/3/2025
Rep. Salinas, Andrea [D-OR-6]
OR • D
Sponsored 3/3/2025
Rep. Hoyle, Val T. [D-OR-4]
OR • D
Sponsored 3/3/2025
Rep. Newhouse, Dan [R-WA-4]
WA • R
Sponsored 3/10/2025
Budzinski
IL • D
Sponsored 3/31/2025
Rep. Graves, Sam [R-MO-6]
MO • R
Sponsored 4/8/2025
Rep. Luttrell, Morgan [R-TX-8]
TX • R
Sponsored 4/14/2025
Bean (FL)
FL • R
Sponsored 4/30/2025
Kelly (PA)
PA • R
Sponsored 5/1/2025
Rep. Steube, W. Gregory [R-FL-17]
FL • R
Sponsored 5/5/2025
Rep. McCaul, Michael T. [R-TX-10]
TX • R
Sponsored 5/7/2025
Feenstra
IA • R
Sponsored 5/13/2025
Mrvan
IN • D
Sponsored 5/13/2025
LaMalfa
CA • R
Sponsored 5/13/2025
Rep. Gottheimer, Josh [D-NJ-5]
NJ • D
Sponsored 5/19/2025
Rep. Taylor, David J. [R-OH-2]
OH • R
Sponsored 5/29/2025
Costa
CA • D
Sponsored 6/23/2025
Rep. Bynum, Janelle S. [D-OR-5]
OR • D
Sponsored 7/25/2025
Rep. Begich, Nicholas J. [R-AK-At Large]
AK • R
Sponsored 9/3/2025
Sessions
TX • R
Sponsored 9/9/2025
Rep. Dexter, Maxine [D-OR-3]
OR • D
Sponsored 9/16/2025
Rep. Vindman, Eugene Simon [D-VA-7]
VA • D
Sponsored 10/3/2025
Kean
NJ • R
Sponsored 4/16/2026
Roll Call Votes
No roll call votes available for this bill.
View on Congress.gov