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To: Finance
MISSISSIPPI LEGISLATURE REGULAR SESSION 2026
By: Senator(s) Harkins, England
SENATE BILL NO. 2832
AN ACT TO AMEND SECTION 27-7-22.42, MISSISSIPPI CODE OF 1972, 1
WHICH AUTHORIZES AN INCOME TAX CREDIT FOR QUALIFIED RAILROAD 2
RECONSTRUCTION OR REPLACEMENT EXPENDITURES AND QUALIFIED NEW RAIL 3
INFRASTRUCTURE EXPENDITURES, TO EXTEND THE DATE OF THE REPEALER ON 4
SECTION; AND FOR RELATED PURPOSES. 5
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI: 6
SECTION 1. Section 27-7-22.42, Mississippi Code of 1972, is 7
amended as follows: 8
27-7-22.42. (1) The following words and phrases shall have 9
the meanings as defined in this section unless the context clearly 10
indicates otherwise: 11
(a) "Eligible taxpayer" means any railroad that is 12
classified by the United States Surface Transportation Board as a 13
Class II or Class III railroad. 14
(b) "Eligible transferee" means any taxpayer having a 15
liability for taxes under this chapter. 16
(c) "Qualified railroad reconstruction or replacement 17
expenditures" means gross expenditures for maintenance, 18
reconstruction or replacement of railroad infrastructure, 19
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including track, roadbed, bridges, industrial leads and sidings, 20
and track-related structures owned or leased by a Class II or 21
Class III railroad in Mississippi as of January 1, 2022. 22
(d) "Qualified new rail infrastructure expenditures" 23
means gross expenditures for new construction of industrial leads, 24
switches, spurs and sidings and extensions of existing sidings, 25
for serving new customer locations or expansions in Mississippi, 26
by a Class II or Class III railroad located in Mississippi. 27
(2) Subject to the provisions of this section, an eligible 28
taxpayer making qualified railroad reconstruction or replacement 29
expenditures shall be allowed a credit against the taxes imposed 30
under this chapter. The credit shall be for an amount equal to 31
the lesser of fifty percent (50%) of an eligible taxpayer's 32
qualified railroad reconstruction or replacement expenditures for 33
the taxable year or the product of Five Thousand Dollars 34
($5,000.00) multiplied by the number of miles of railroad track 35
owned or leased within the State of Mississippi by the eligible 36
taxpayer as of the close of the taxable year. For qualified new 37
rail infrastructure expenditures, the credit shall be for an 38
amount equal to the lesser of fifty percent (50%) of an eligible 39
taxpayer's qualified new rail infrastructure expenditures for the 40
taxable year, capped at One Million Dollars ($1,000,000.00) per 41
new rail-served customer project. However, the tax credit shall 42
not exceed the amount of tax imposed upon the taxpayer for the 43
taxable year reduced by the sum of all other credits allowable to 44
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the taxpayer under this chapter, except credit for tax payments 45
made by or on behalf of the taxpayer. Any tax credit claimed 46
under this section but not used in any taxable year may be carried 47
forward for five (5) consecutive years from the close of the 48
taxable year in which the credit was earned. The aggregate amount 49
of credits that may be claimed by all taxpayers claiming a credit 50
under this section during a calendar year shall not exceed Eight 51
Million Dollars ($8,000,000.00). In addition, an eligible 52
taxpayer may transfer by written agreement any unused tax credit 53
to an eligible transferee at any time during the year in which the 54
credit is earned and the five (5) years following the taxable year 55
in which the qualified railroad reconstruction or replacement 56
expenditures or the qualified new rail infrastructure expenditures 57
are made. The eligible taxpayer and the eligible transferee must 58
jointly file a copy of the written transfer agreement with the 59
Department of Revenue within thirty (30) days of the transfer. 60
The written agreement must contain the: (a) name, address, and 61
taxpayer identification number of the parties to the transfer; (b) 62
taxable year the eligible taxpayer incurred the qualified railroad 63
reconstruction or replacement expenditures or the qualified new 64
rail infrastructure expenditures; (c) amount of credit being 65
transferred; and (d) taxable year or years for which the credit 66
may be claimed by the eligible transferee. 67
This section shall stand repealed on January 1, * * * 2029. 68
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ST: Income tax; extend repealer on credit for
certain railroad expenditures.
SECTION 2. This act shall take effect and be in force from 69
and after July 1, 2026. 70