Income tax; increase and extend a credit for expenditures on maintenance of railroad track owned or leased by Class III railroads

Bigger track maintenance credit for railroads

The law raises Georgia’s railroad maintenance tax credit cap from $3,500 to $5,000 per mile and extends the credit through 2027. Eligible railroads must meet federal Class III rules in effect on January 1, 2018. Qualifying costs cover upkeep of Georgia track, roadbeds, bridges, and related structures owned or leased on that date. Costs used to qualify for a federal tax credit or paid by state or federal grants do not count. The credit equals 50% of qualifying costs paid or incurred during the tax year. Its cap uses Georgia track miles owned or leased at year-end, with one credit allowed per mile each year. Eligible tax years begin on or after January 1, 2019, and end on or before December 31, 2027. Credits cannot exceed the taxpayer’s Georgia income tax bill. Unused amounts can carry forward for up to three years from the close of the year first claimed, but not back to earlier years. Between January 1, 2019, and January 1, 2028, railroads can transfer unused credits once by written agreement to another Georgia income taxpayer. A claimed credit reduces the track’s tax basis—the value used to calculate future taxable gains—by the credit amount. The tax commissioner must issue needed forms and rules and report credit use to legislative tax committee chairs each September 1, from 2020 through 2027. Reports list claimant counts and the number and total value of credits earned and applied during the prior tax year. The credit section is automatically repealed on January 1, 2028.