1. Fifty percent of the qualified short line railroad maintenance expenditures made by the railroad. This portion of the credit is limited to an amount equal to $5,000 multiplied by the number of miles of railroad track owned or leased by the railroad. The bill defines “qualified short line railroad maintenance expenditures” as gross expenditures for railroad infrastructure rehabilitation or maintenance improvements located in this state.
2. Fifty percent of the railroad’s qualified new rail infrastructure expenditures. This portion of the credit is limited to $2,000,000 per project. The bill defines “qualified new rail infrastructure expenditures” as expenditures for rail infrastructure and improvements in this state placed in service after December 31, 2024.
A claimant that owns or leases a rail siding, industrial spur, or industry track may claim the portion of the credit described above for the claimant’s qualified new rail infrastructure expenditures.
Before claiming a credit under the bill, a claimant must first apply to and receive approval from the Department of Revenue to claim the credit. DOR may approve up to $10,000,000 in total credits for qualified new rail infrastructure expenditures for each tax year, and DOR must approve applications for credits on a first-come, first-served basis.
For further information see the state fiscal estimate, which will be printed as an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:
SB213,1
1Section 1. 71.05 (6) (a) 15. of the statutes is amended to read: SB213,2,7271.05 (6) (a) 15. The amount of the credits computed under s. 71.07 (2dm), 3(2dx), (2dy), (3g), (3h), (3n), (3q), (3s), (3t), (3w), (3wm), (3y), (4k), (4n), (5i), (5j), (5k), 4(5r), (5rm), (6n), (8t), and (10) and not passed through by a partnership, limited 5liability company, or tax-option corporation that has added that amount to the 6partnership’s, company’s, or tax-option corporation’s income under s. 71.21 (4) or 771.34 (1k) (g). SB213,28Section 2. 71.07 (8t) of the statutes is created to read: SB213,2,10971.07 (8t) Rail infrastructure modernization credit. (a) Definitions. In 10this subsection: SB213,2,12111. “Claimant” means a person who files a claim under this subsection and 12who is one of the following: SB213,2,1513a. A railroad company located wholly or partly in this state that is classified by 14the federal surface transportation board as a class II or class III railroad for the 15taxable year to which the claim applies. SB213,3,3
1b. An owner or lessee of a rail siding, industrial spur, or industry track on or 2adjacent to a railroad in this state during the taxable year to which the claim 3applies. SB213,3,1042. “Qualified new rail infrastructure expenditures” means expenditures for 5rail infrastructure and improvements in this state placed in service after December 631, 2024, including expenditures for the acquisition of right-of-way; engineering; 7construction of new track such as industrial leads, switches, spurs, and sidings; 8rehabilitation of existing inactive track to reinstate operation; loading dock 9improvements; and transloading structures involved with servicing customer 10locations or expansions. SB213,3,15113. “Qualified short line railroad maintenance expenditures” means gross 12expenditures for railroad infrastructure rehabilitation or maintenance 13improvements located in this state, including but not limited to rail, tie plates, joint 14bars, fasteners, switches, ballast, subgrade, roadbed, industrial leads, sidings, 15signs, safety barriers, crossing signals and gates, and related track structures. SB213,3,1916(b) Filing claims. For taxable years beginning after December 31, 2024, and 17before January 1, 2035, and subject to the limitations provided in this subsection, a 18claimant may claim as a credit against the tax imposed under s. 71.02, up to the 19amount of those taxes, all of the following: SB213,3,23201. An amount equal to 50 percent of the qualified short line railroad 21maintenance expenditures made by the claimant during the taxable year to which 22the claim relates if the claimant is classified by the federal surface transportation 23board as a class II or class III railroad for the taxable year. SB213,4,2242. An amount equal to 50 percent of the qualified new rail infrastructure
1expenditures made by the claimant during the taxable year to which the claim 2relates. SB213,4,53(c) Limitations. 1. No credit may be claimed under par. (b) 1. for any qualified 4short line railroad maintenance expenditures that are used to claim a tax credit 5under federal law or that are funded by a federal or state grant. SB213,4,1062. The total amount of the credits under par. (b) 1. and ss. 71.28 (8t) (b) 1. and 771.47 (8t) (b) 1. for a claimant for a taxable year may not exceed an amount equal to 8$5,000 multiplied by the number of miles of railroad track owned or leased by the 9claimant in this state on December 31 of the taxable year to which the claim 10applies. SB213,4,13113. The total amount of the credits under par. (b) 2. and ss. 71.28 (8t) (b) 2. and 1271.47 (8t) (b) 2. for a claimant for a taxable year may not exceed $2,000,000 per 13project application approved by the department. SB213,4,18144. No credit may be allowed under this subsection unless the claimant 15submits an application to the department, at the time and in the manner 16prescribed by the department, and the department approves the application. The 17claimant shall submit a copy of the approved application with the claimant’s 18return. SB213,5,2195. Partnerships, tax-option corporations, and limited liability companies may 20not claim a credit under this subsection, but the eligibility for, and the amount of, 21the credit are based on their expenditures made under par. (b). A partnership, tax-22option corporation, or limited liability company shall compute the amount of the 23credit that each of its partners, shareholders, or members may claim and shall 24provide that information to each of them. Partners of a partnership, shareholders
1of tax-option corporations, and members of limited liability companies may claim 2the credit in proportion to their ownership interest. SB213,5,43(d) Administration. 1. Section 71.28 (4) (e), (g), and (h), as it applies to the 4credit under s. 71.28 (4), applies to the credit under this subsection. SB213,5,1052. If a credit computed under this subsection is not entirely offset against 6Wisconsin income or franchise taxes otherwise due, the unused balance may be 7carried forward and credited against Wisconsin income or franchise taxes 8otherwise due for the following 5 taxable years to the extent not offset by these 9taxes otherwise due in all intervening years between the year in which the 10expenditure was made and the year in which the carry-forward credit is claimed. SB213,5,2011(e) Transfer. Any person may sell or otherwise transfer the credit under par. 12(b), in whole or in part, to another person who is subject to the taxes imposed under 13s. 71.02, 71.23, or 71.43, if the person notifies the department of the transfer, and 14submits with the notification a copy of the transfer documents, and the department 15certifies ownership of the credit with each transfer. The transferor may file a claim 16for more than one taxable year on a form prescribed by the department to compute 17all years of the credit under par. (b) at the time of the transfer request. The 18transferee may first use the credit to offset tax in the taxable year of the transferor 19in which the transfer occurs, and may use the credit only to offset tax in taxable 20years otherwise allowed to be claimed and carried forward by the original claimant. SB213,321Section 3. 71.10 (4) (cu) of the statutes is created to read: SB213,5,222271.10 (4) (cu) Rail infrastructure modernization credit under s. 71.07 (8t). SB213,423Section 4. 71.21 (4) (a) of the statutes is amended to read: SB213,6,32471.21 (4) (a) The amount of the credits computed by a partnership under s.
171.07 (2dm), (2dx), (2dy), (3g), (3h), (3n), (3q), (3s), (3t), (3w), (3wm), (3y), (4k), (4n), 2(5g), (5i), (5j), (5k), (5r), (5rm), (6n), (8t), and (10) and passed through to partners 3shall be added to the partnership’s income. SB213,54Section 5. 71.26 (2) (a) 4. of the statutes is amended to read: SB213,6,10571.26 (2) (a) 4. Plus the amount of the credit computed under s. 71.28 (1dm), 6(1dx), (1dy), (3g), (3h), (3n), (3q), (3t), (3w), (3wm), (3y), (5g), (5i), (5j), (5k), (5r), 7(5rm), (6n), (8t), and (10) and not passed through by a partnership, limited liability 8company, or tax-option corporation that has added that amount to the 9partnership’s, limited liability company’s, or tax-option corporation’s income under 10s. 71.21 (4) or 71.34 (1k) (g). SB213,611Section 6. 71.28 (8t) of the statutes is created to read: SB213,6,131271.28 (8t) Rail infrastructure modernization credit. (a) Definitions. In 13this subsection: SB213,6,15141. “Claimant” means a person who files a claim under this subsection and 15who is one of the following: SB213,6,1816a. A railroad company located wholly or partly in this state that is classified by 17the federal surface transportation board as a class II or class III railroad for the 18taxable year to which the claim applies. SB213,6,2119b. An owner or lessee of a rail siding, industrial spur, or industry track on or 20adjacent to a railroad in this state during the taxable year to which the claim 21applies. SB213,7,4222. “Qualified new rail infrastructure expenditures” means expenditures for 23rail infrastructure and improvements in this state placed in service after December 2431, 2024, including expenditures for the acquisition of right-of-way; engineering;
1construction of new track such as industrial leads, switches, spurs, and sidings; 2rehabilitation of existing inactive track to reinstate operation; loading dock 3improvements; and transloading structures involved with servicing customer 4locations or expansions. SB213,7,953. “Qualified short line railroad maintenance expenditures” means gross 6expenditures for railroad infrastructure rehabilitation or maintenance 7improvements located in this state, including but not limited to rail, tie plates, joint 8bars, fasteners, switches, ballast, subgrade, roadbed, industrial leads, sidings, 9signs, safety barriers, crossing signals and gates, and related track structures. SB213,7,1310(b) Filing claims. For taxable years beginning after December 31, 2024, and 11before January 1, 2035, and subject to the limitations provided in this subsection, a 12claimant may claim as a credit against the tax imposed under s. 71.23, up to the 13amount of those taxes, all of the following: SB213,7,17141. An amount equal to 50 percent of the qualified short line railroad 15maintenance expenditures made by the claimant during the taxable year to which 16the claim relates if the claimant is classified by the federal surface transportation 17board as a class II or class III railroad for the taxable year. SB213,7,20182. An amount equal to 50 percent of the qualified new rail infrastructure 19expenditures made by the claimant during the taxable year to which the claim 20relates. SB213,7,2321(c) Limitations. 1. No credit may be claimed under par. (b) 1. for any qualified 22short line railroad maintenance expenditures that are used to claim a tax credit 23under federal law or that are funded by a federal or state grant. SB213,8,4242. The total amount of the credits under par. (b) 1. and ss. 71.07 (8t) (b) 1. and
171.47 (8t) (b) 1. for a claimant for a taxable year may not exceed an amount equal to 2$5,000 multiplied by the number of miles of railroad track owned or leased by the 3claimant in this state on December 31 of the taxable year to which the claim 4applies. SB213,8,753. The total amount of the credits under par. (b) 2. and ss. 71.07 (8t) (b) 2. and 671.47 (8t) (b) 2. for a claimant for a taxable year may not exceed $2,000,000 per 7project application approved by the department. SB213,8,1284. No credit may be allowed under this subsection unless the claimant 9submits an application to the department, at the time and in the manner 10prescribed by the department, and the department approves the application. The 11claimant shall submit a copy of the approved application with the claimant’s 12return. SB213,8,20135. Partnerships, tax-option corporations, and limited liability companies may 14not claim a credit under this subsection, but the eligibility for, and the amount of, 15the credit are based on their expenditures made under par. (b). A partnership, tax-16option corporation, or limited liability company shall compute the amount of the 17credit that each of its partners, shareholders, or members may claim and shall 18provide that information to each of them. Partners of a partnership, shareholders 19of tax-option corporations, and members of limited liability companies may claim 20the credit in proportion to their ownership interest. SB213,8,2221(d) Administration. 1. Subsection (4) (e), (g), and (h), as it applies to the credit 22under sub. (4), applies to the credit under this subsection. SB213,9,4232. If a credit computed under this subsection is not entirely offset against 24Wisconsin income or franchise taxes otherwise due, the unused balance may be
1carried forward and credited against Wisconsin income or franchise taxes 2otherwise due for the following 5 taxable years to the extent not offset by these 3taxes otherwise due in all intervening years between the year in which the 4expenditure was made and the year in which the carry-forward credit is claimed. SB213,9,145(e) Transfer. Any person may sell or otherwise transfer the credit under par. 6(b), in whole or in part, to another person who is subject to the taxes imposed under 7s. 71.02, 71.23, or 71.43, if the person notifies the department of the transfer, and 8submits with the notification a copy of the transfer documents, and the department 9certifies ownership of the credit with each transfer. The transferor may file a claim 10for more than one taxable year on a form prescribed by the department to compute 11all years of the credit under par. (b) at the time of the transfer request. The 12transferee may first use the credit to offset tax in the taxable year of the transferor 13in which the transfer occurs, and may use the credit only to offset tax in taxable 14years otherwise allowed to be claimed and carried forward by the original claimant. SB213,715Section 7. 71.30 (3) (cu) of the statutes is created to read: SB213,9,161671.30 (3) (cu) Rail infrastructure modernization credit under s. 71.28 (8t). SB213,817Section 8. 71.34 (1k) (g) of the statutes is amended to read: SB213,9,211871.34 (1k) (g) An addition shall be made for credits computed by a tax-option 19corporation under s. 71.28 (1dm), (1dx), (1dy), (3), (3g), (3h), (3n), (3q), (3t), (3w), 20(3wm), (3y), (4), (5), (5g), (5i), (5j), (5k), (5r), (5rm), (6n), (8t), and (10) and passed 21through to shareholders. SB213,922Section 9. 71.45 (2) (a) 10. of the statutes is amended to read: SB213,9,242371.45 (2) (a) 10. By adding to federal taxable income the amount of credit 24computed under s. 71.47 (1dm) to (1dy), (3g), (3h), (3n), (3q), (3w), (3y), (5g), (5i),
1(5j), (5k), (5r), (5rm), (6n), (8t), and (10) and not passed through by a partnership, 2limited liability company, or tax-option corporation that has added that amount to 3the partnership’s, limited liability company’s, or tax-option corporation’s income 4under s. 71.21 (4) or 71.34 (1k) (g) and the amount of credit computed under s. 71.47 5(3), (3t), (4), (4m), and (5). SB213,106Section 10. 71.47 (8t) of the statutes is created to read: SB213,10,8771.47 (8t) Rail infrastructure modernization credit. (a) Definitions. In 8this subsection: SB213,10,1091. “Claimant” means a person who files a claim under this subsection and 10who is one of the following: SB213,10,1311a. A railroad company located wholly or partly in this state that is classified by 12the federal surface transportation board as a class II or class III railroad for the 13taxable year to which the claim applies. SB213,10,1614b. An owner or lessee of a rail siding, industrial spur, or industry track on or 15adjacent to a railroad in this state during the taxable year to which the claim 16applies. SB213,10,23172. “Qualified new rail infrastructure expenditures” means expenditures for 18rail infrastructure and improvements in this state placed in service after December 1931, 2024, including expenditures for the acquisition of right-of-way; engineering; 20construction of new track such as industrial leads, switches, spurs, and sidings; 21rehabilitation of existing inactive track to reinstate operation; loading dock 22improvements; and transloading structures involved with servicing customer 23locations or expansions. SB213,11,4243. “Qualified short line railroad maintenance expenditures” means gross
1expenditures for railroad infrastructure rehabilitation or maintenance 2improvements located in this state, including but not limited to rail, tie plates, joint 3bars, fasteners, switches, ballast, subgrade, roadbed, industrial leads, sidings, 4signs, safety barriers, crossing signals and gates, and related track structures. SB213,11,85(b) Filing claims. For taxable years beginning after December 31, 2024, and 6before January 1, 2035, and subject to the limitations provided in this subsection, a 7claimant may claim as a credit against the tax imposed under s. 71.43, up to the 8amount of those taxes, all of the following: SB213,11,1291. An amount equal to 50 percent of the qualified short line railroad 10maintenance expenditures made by the claimant during the taxable year to which 11the claim relates if the claimant is classified by the federal surface transportation 12board as a class II or class III railroad for the taxable year. SB213,11,15132. An amount equal to 50 percent of the qualified new rail infrastructure 14expenditures made by the claimant during the taxable year to which the claim 15relates. SB213,11,1816(c) Limitations. 1. No credit may be claimed under par. (b) 1. for any qualified 17short line railroad maintenance expenditures that are used to claim a tax credit 18under federal law or that are funded by a federal or state grant. SB213,11,23192. The total amount of the credits under par. (b) 1. and ss. 71.07 (8t) (b) 1. and 2071.28 (8t) (b) 1. for a claimant for a taxable year may not exceed an amount equal to 21$5,000 multiplied by the number of miles of railroad track owned or leased by the 22claimant in this state on December 31 of the taxable year to which the claim 23applies. SB213,12,2243. The total amount of the credits under par. (b) 2. and ss. 71.07 (8t) (b) 2. and
171.28 (8t) (b) 2. for a claimant for a taxable year may not exceed $2,000,000 per 2project application approved by the department. SB213,12,734. No credit may be allowed under this subsection unless the claimant 4submits an application to the department, at the time and in the manner 5prescribed by the department, and the department approves the application. The 6claimant shall submit a copy of the approved application with the claimant’s 7return. SB213,12,1585. Partnerships, tax-option corporations, and limited liability companies may 9not claim a credit under this subsection, but the eligibility for, and the amount of, 10the credit are based on their expenditures made under par. (b). A partnership, tax-11option corporation, or limited liability company shall compute the amount of the 12credit that each of its partners, shareholders, or members may claim and shall 13provide that information to each of them. Partners of a partnership, shareholders 14of tax-option corporations, and members of limited liability companies may claim 15the credit in proportion to their ownership interest. SB213,12,1716(d) Administration. 1. Section 71.28 (4) (e), (g), and (h), as it applies to the 17credit under s. 71.28 (4), applies to the credit under this subsection. SB213,12,23182. If a credit computed under this subsection is not entirely offset against 19Wisconsin income or franchise taxes otherwise due, the unused balance may be 20carried forward and credited against Wisconsin income or franchise taxes 21otherwise due for the following 5 taxable years to the extent not offset by these 22taxes otherwise due in all intervening years between the year in which the 23expenditure was made and the year in which the carry-forward credit is claimed. SB213,13,924(e) Transfer. Any person may sell or otherwise transfer the credit under par.
1(b), in whole or in part, to another person who is subject to the taxes imposed under 2s. 71.02, 71.23, or 71.43, if the person notifies the department of the transfer, and 3submits with the notification a copy of the transfer documents, and the department 4certifies ownership of the credit with each transfer. The transferor may file a claim 5for more than one taxable year on a form prescribed by the department to compute 6all years of the credit under par. (b) at the time of the transfer request. The 7transferee may first use the credit to offset tax in the taxable year of the transferor 8in which the transfer occurs, and may use the credit only to offset tax in taxable 9years otherwise allowed to be claimed and carried forward by the original claimant. SB213,1110Section 11. 71.49 (1) (cu) of the statutes is created to read: SB213,13,111171.49 (1) (cu) Rail infrastructure modernization credit under s. 71.47 (8t). SB213,1212Section 12. 73.03 (78) of the statutes is created to read: SB213,13,151373.03 (78) (a) To implement a program to approve applications for purposes of 14ss. 71.07 (8t), 71.28 (8t), and 71.47 (8t). Application shall be made to the 15department for each taxable year for which a credit is desired. SB213,13,1816(b) 1. The department shall process applications under this subsection in the 17order of receipt, and the department shall approve applications under this 18subsection on a first-come, first-served basis. SB213,13,20192. The department may approve up to $10,000,000 in total credits under ss. 2071.07 (8t) (b) 2., 71.28 (8t) (b) 2., and 71.47 (8t) (b) 2. for each taxable year.
