Eligible railroads can claim tax credits for improvements starting in 2027

Eligible railroads and track owners can apply for tax credits covering half their qualifying maintenance and improvement spending. Short line railroads classified as Class II or Class III must be located wholly or partly in West Virginia. Owners or renters of rail sidings or industrial tracks on or beside these railroads in the state also qualify. Covered structures must be owned or rented by a Class II or Class III railroad. Spending funded by federal grants or used to earn a federal tax credit does not qualify. The credit limit uses miles of track owned, rented, or operated in West Virginia at the calendar year's end. Applicants must submit an eligibility certificate by May 1 of the year following the spending. Credits reduce taxes owed but provide no cash refund. The provisions expire after July 1, 2031, unless lawmakers renew them. Spending after July 1, 2031, earns no credit.

Eligible railroads and track owners can apply for tax credits covering half their qualifying spending on rail construction and improvements. Eligible Class II or Class III railroads and owners or renters of nearby sidings or industrial tracks qualify. Covered work includes building tracks, restoring inactive tracks, and improving freight loading facilities serving customers or expansions. The Tax Commissioner processes applications and grants approvals in the order received. Credits reduce taxes owed but provide no cash refund. The provisions expire after July 1, 2031, unless lawmakers renew them. Spending after July 1, 2031, earns no credit.

Credit holders can carry unused credits forward or sell or transfer them to another taxpayer. These rules cover both types of rail credits. Recipients must be taxpayers subject to the taxes listed in the law. Transfers require a written agreement. Both parties must jointly file a transfer form with the Tax Commissioner within 30 days of the transfer. The Tax Commissioner cannot seek repayment from the recipient for a transferred credit that is later disqualified. Transfers can occur in the year the credit is earned or during its five-year carryover period.

The Tax Commissioner must send state leaders reports evaluating the rail credits' costs and effectiveness. The Governor and the leaders of both legislative chambers receive reports covering both types of rail credits. Each report must examine the latest two-year period with available information. Reports must include the number of taxpayers claiming credits, the value of credits issued, qualifying spending, and the credits' cost. Reporting begins on the first day of the third taxable year after the law's passage and repeats every two years.