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SECOND REGULAR SESSION
SENATE BILL NO. 1461
103RD GENERAL ASSEMBLY
INTRODUCED BY SENATOR GREGORY (21).
6292S.01I KRISTINA MARTIN, Secretary
AN ACT
To amend chapter 135, RSMo, by adding thereto one new section relating to a tax credit for
qualified railroad infrastructure investments.
Be it enacted by the General Assembly of the State of Missouri, as follows:
Section A. Chapter 135, RSMo, is amended by adding thereto 1
one new section, to be known as section 135.1210, to read as 2
follows:3
135.1210. 1. As used in this section, the following 1
terms mean: 2
(1) "Eligible customer", a person who uses any 3
railroad or railroad-related property, facilities, or 4
structures located wholly or partly within the state of 5
Missouri to directly or indirectly transport property, 6
commodities, or goods, or who is served by any railroad, or 7
who stores railcars on any railroad in Missouri; 8
(2) "Eligible taxpayer": 9
(a) Any short line railroad company located wholly or 10
partly in the state of Missouri that is classified by the 11
United States Surface Transportation Board as a Class II or 12
Class III railroad; or 13
(b) Any owner or lessee of a rail siding, industrial 14
spur, or industry track located on or adjacent to any 15
railroad in the state of Missouri; 16
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and subject to the state income tax imposed under chapter 17
143, 147, or 148, excluding the withholding tax imposed 18
under sections 143.191 to 143.265, who made qualified 19
railroad track expenditures in Missouri or qualified new 20
rail infrastructure expenditures in Missouri during the tax 21
year for which a credit under this section is claimed; 22
(3) "Eligible vendor", a person who provides railroad- 23
related services directly to an eligible taxpayer; 24
(4) "Person", the same meaning as defined under 25
section 1.020; 26
(5) "Qualified amount", for any eligible taxpayer in a 27
given tax year, an amount equal to fifty percent of an 28
eligible taxpayer's qualified railroad track expenditures or 29
qualified new rail infrastructure expenditures, provided 30
that: 31
(a) For qualified railroad track expenditures, the 32
amount of tax credit shall not exceed an amount equal to the 33
product of five thousand dollars multiplied by the number of 34
miles of railroad track owned or leased in the state by a 35
Class II or Class III railroad as of the close of the tax 36
year; and 37
(b) For qualified new rail infrastructure 38
expenditures, the amount of tax credit shall not exceed one 39
million dollars for each new rail-served customer project of 40
an eligible taxpayer; 41
(6) "Qualified new rail infrastructure expenditures", 42
gross expenditures for new rail infrastructure by an 43
eligible taxpayer, which includes the construction of new 44
track infrastructure such as industrial leads, switches, 45
spurs, sidings, rail loading docks, and transloading 46
structures involved with servicing new customer locations or 47
expansions by any railroad located in Missouri; 48
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(7) "Qualified railroad expenditures", gross 49
expenditures for maintenance, reconstruction, or replacement 50
of railroad infrastructure, including track, roadbed, 51
bridges, industrial leads and sidings, and track-related 52
structures owned or leased by a Class II or Class III 53
railroad located in Missouri. "Qualified railroad 54
expenditures" does not include expenditures used to generate 55
a federal tax credit or expenditures funded by a state or 56
federal grant; 57
(8) "Railroad-related services", includes, but is not 58
limited to, the following: transport of freight by rail; 59
loading and unloading of freight transported by rail; 60
railroad bridge services; railroad track construction; 61
provision of railroad track material or equipment; 62
locomotive or freight train car leasing or rental; provision 63
of railroad financial services, including banking or 64
insurance; maintenance of a railroad's right-of-way, 65
including vegetation control; and freight train car repair, 66
rehabilitation, or remanufacturing repair services; 67
(9) "Tax credit", a credit against the tax otherwise 68
due under chapter 143, 147, or 148, excluding withholding 69
tax imposed under sections 143.191 to 143.265. 70
2. For all tax years beginning on or after January 1, 71
2027, an eligible taxpayer shall be allowed to claim a 72
nonrefundable tax credit for qualified railroad track 73
expenditures in Missouri or for qualified new rail 74
infrastructure expenditures in Missouri against the 75
taxpayer's state tax liability in an amount equal to the 76
taxpayer's qualified amount. 77
3. An eligible taxpayer who seeks to claim a tax 78
credit under this section shall submit a certificate of 79
eligibility to the Missouri department of economic 80
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development after completion of the qualified railroad 81
expenditures or qualified new rail infrastructure 82
expenditures. The certificate shall include the number of 83
miles of railroad track owned or leased in this state and a 84
description of the amount of qualified railroad expenditures 85
or qualified new rail infrastructure expenditures 86
completed. The certificate shall be made on forms and in 87
the manner prescribed by the department and considered in 88
the order received. 89
4. If the department of economic development 90
determines that the taxpayer meets the requirements to claim 91
a tax credit under this section, the department may issue a 92
certificate of eligibility to the eligible taxpayer. The 93
certificate shall be numbered for identification and declare 94
its date of issuance and the amount of the tax credit 95
allowed under this section. 96
5. (1) The cumulative amount of tax credits under 97
this section authorized for qualified railroad track 98
expenditures in this state shall not exceed four million 99
five hundred thousand dollars per calendar year. If the 100
amount of tax credits claimed in a calendar year under this 101
section exceeds four million five hundred thousand dollars, 102
tax credits shall be allowed based on the order in which 103
they are claimed. 104
(2) The cumulative amount of tax credits under this 105
section authorized for qualified new rail infrastructure 106
expenditures in this state shall not exceed five million 107
dollars per calendar year. If the amount of tax credits 108
claimed in a calendar year under this section exceeds five 109
million dollars, tax credits shall be allowed based on the 110
order in which they are claimed. 111
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6. Any unused portion of a tax credit allowed under 112
this section may be carried forward for up to five 113
subsequent tax years immediately following the tax year the 114
credit was allowed. 115
7. (1) Subject to the requirements of this 116
subsection, an eligible taxpayer who earns and is entitled 117
to the credit or to an unused portion of the credit allowed 118
by this section may transfer all or a portion of the unused 119
credit by written agreement to any eligible customer, 120
eligible vendor, or any taxpayer subject to tax imposed 121
under chapter 143, 147, or 148, excluding withholding tax 122
imposed under sections 143.191 to 143.265, at any time 123
during the year in which the credit is earned and the five 124
years following the year of the qualified expenditures. The 125
taxpayer originally allowed the tax credit and the 126
subsequent transferee shall jointly file a copy of the 127
written credit transfer agreement with the department of 128
revenue. The agreement shall include the name, address, and 129
taxpayer identification number of the parties to the 130
transfer; the amount of the credit being transferred; the 131
year the credit was originally allowed to the transferring 132
taxpayer; and the tax year or years for which the credit may 133
be claimed. In the event of such a transfer, the transferee 134
may claim the credit on the transferee's income tax return 135
originally filed during the calendar year in which the 136
transfer takes place and in the case of carryover of the 137
credit, on the transferee's returns for the number of years 138
of carryover available to the transferor at the time of the 139
transfer unless earlier exhausted. 140
(2) In the event that after the transfer the 141
department of revenue determines that the amount of credit 142
properly available under this section is less than the 143
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amount claimed by the transferor of the credit or that the 144
credit is subject to recapture, the department shall assess 145
the amount of overstated or recaptured credit as taxes due 146
from the transferor and not the transferee. The assessment 147
shall be made in the manner provided for a deficiency in 148
taxes under state law. 149
8. The department of economic development shall 150
prepare an annual report for the general assembly outlining 151
tax credit transfers that take place each calendar year, 152
listing the qualified railroad expenditures and qualified 153
new rail infrastructure expenditures for each eligible 154
taxpayer and a statement summarizing the investments made by 155
the eligible taxpayer. 156
9. The department of economic development may 157
promulgate rules governing the allowance of the income tax 158
credit provided for in this section, including provisions 159
for the verification of the timeliness of a claim, the 160
process and documentation required for the department of 161
economic development to approve an income tax credit for 162
qualified railroad expenditures or qualified new rail 163
infrastructure expenditures, and any documentation that the 164
department of economic development requires in order to 165
determine that an eligible taxpayer, eligible customer, or 166
eligible vendor meets the requirements of this section. In 167
addition to other needed rules, the department of economic 168
development may promulgate rules prescribing, in the case of 169
S corporations, partnerships, trusts, or estates, a method 170
of attributing the credit under this section to the 171
shareholders, partners, or beneficiaries in proportion to 172
their share of the income from the S corporation, 173
partnership, trust, or estate. 174
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10. The department of revenue and the department of 175
economic development shall promulgate all necessary rules 176
and regulations for the administration of this section 177
including, but not limited to, rules relating to the 178
verification of a taxpayer's qualified amount. Any rule or 179
portion of a rule, as that term is defined in section 180
536.010, that is created under the authority delegated in 181
this section shall become effective only if it complies with 182
and is subject to all of the provisions of chapter 536 and, 183
if applicable, section 536.028. This section and chapter 184
536 are nonseverable and if any of the powers vested with 185
the general assembly pursuant to chapter 536 to review, to 186
delay the effective date, or to disapprove and annul a rule 187
are subsequently held unconstitutional, then the grant of 188
rulemaking authority and any rule proposed or adopted after 189
August 28, 2026, shall be invalid and void. 190
11. Under section 23.253 of the Missouri sunset act: 191
(1) The provisions of the new program authorized under 192
this section shall automatically sunset December thirty- 193
first six years after the effective date of this section, 194
unless reauthorized by an act of the general assembly; 195
(2) If such program is reauthorized, the program 196
authorized under this section shall automatically sunset 197
December thirty-first twelve years after the effective date 198
of the reauthorization of this section; and 199
(3) This section shall terminate on September first of 200
the calendar year immediately following the calendar year in 201
which the program authorized under this section is sunset. 202
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