First Posted: 7/24/2013
Citing their value to the state’s economy, U.S. Sen. Bob Casey has co-sponsored a bill that would allow short-line railroads to take a tax deduction of up to 50 percent on track improvements and other infrastructure work.
Casey said the legislation could affect a number of short lines across the state, including the Reading & Northern Railroad, which serves parts of Luzerne County.
Short lines are regional or local carriers that connect freight shippers and customers with larger railroads. Their work saves the government millions of dollars in highway costs, Casey said.
“Short-line railroads help businesses across Pennsylvania move their goods,” Casey said. “Renewing this tax credit will allow railroad companies to upgrade their infrastructure so that rail continues to have a role in boosting the Commonwealth’s economy.”
The Short line Railroad Rehabilitation and Investment Act of 2013 would extend a previous tax credit that is expected to expire on Dec. 31, 2013. The tax credit act originated with the American Jobs Creation Act of 2004 and already has been extended once.
The extension would run through 2016, and would allow new short-line railroads that were constructed after 2004 to be included in the tax incentive.
A tax credit will be given for 50 cents of every dollar that a customer or supplier spends on rail improvements, allowing small railroad companies to deduct up to 50 percent of investments made in track repair and other qualifying investments.
Port Clinton-based Reading & Northern operates freight services in seven eastern Pennsylvania counties, with its main line and branch lines serving Luzerne County. R&N is a major presence in the Pittston and Dupont areas, where it has connections and a fracking sand terminal.
“Reading & Northern is very appreciative of Sen. Casey’ support for this important tax credit. Every year RBMN spends millions of dollars to maintain and upgrade its 320 miles of railroad in order to provide high-quality service to our dozens of customers,” President Wayne Michel said Wednesday.
“We totally support Sen. Casey’s efforts in supporting this bill. It has allowed our regional rail system to grow from 580 (freight) cars in 1985 to over 7,000 currently,” said Larry Malski, president of the Scranton-based Pennsylvania Northeast Regional Railroad Authority, a 100-mile network of regional rails around Lackawanna and Monroe counties.